Council’s total investment in Vector Arena

Following its impressive official opening event in April, Auckland’s Vector Arena is proving to be a real magnet for major international acts.

Mayor Dick Hubbard said Auckland City Council is extremely proud to have led the development of the 12,000-seat indoor arena built on land owned by local iwi, Ngati Whatua o Orakei, in Quay Park.

"Vector Arena is a true success story and an absolute asset to Auckland. It is setting the city alight – attracting the best of the best internationally, like moths to a flame", says the mayor.

Martin Reid, General Counsel of Mainzeal confirmed that a Deed of Settlement and a Deed of Variation to the Development Deed have now been signed between Auckland City Council, Quay Park Arena Management (QPAM) and Mainzeal resolving contractual matters between the parties.

“Some additional works will continue throughout 2007 but these will not prevent or disrupt events taking place”, says Mr Reid.

Councillor Vern Walsh, Chair of the Arena Working Party said that the total cost of the arena project to the council is $72.5 million.

“We provided an initial $71.1 million toward the arena project and subsequently agreed to contribute an additional $1.75 million to ensure that contractual issues were settled and to fund further enhancements to the base design.

“These enhancements will improve the facility beyond the original contracted requirements, and include items such as an additional back stage area and extra storage space”, says Cr Walsh.

The bulk of the additional funding came from interest earned by council on the prepayment commitment it made to QPAM as part of the development agreement entered into. Due to the project’s delays, more interest was earned on this amount than originally anticipated as progress payments were drawn out. The remaining unbudgeted amount of up to $250,000 will come from general rates funding and has been approved by a council resolution.

Bruce Mactaggart, QPAM Chief Executive, said that QPAM also contributed an additional amount, equal to that which council contributed, to ensure the long term efficient operation of the venue.

Auckland City Council provided the principal funding for the arena under a BOOT (build, own, operate, transfer) arrangement with QPAM - the first example in New Zealand of such an arrangement for this type of facility.

Under the BOOT, QPAM designed, built the arena and will own, operate and maintain the facility over a 40-year period, at which time the arena transfers to council ownership at no further cost and in good working order.

One of the reasons Auckland City Council chose the BOOT arrangement was because it minimises risk to council and ratepayers. Although the council provided a fixed sum toward the funding of the construction, the risks and costs associated with the design, construction and operation of the arena rest with QPAM or its contractors, not the council.

The arena has the capacity, facilities and operational flexibility to host an enormous variety of sports, music and entertainment events as well as large community events.

The development of Vector Arena is one of many projects that Auckland City Council is investing in as a part of a 10-year action plan to create an even better CBD for Auckland, including upgrading Quay Street, Queen Street and Beach Road.

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