Written By:
mickysavage - Date published:
8:25 am, May 27th, 2015 - 101 comments
Categories: Abuse of power, corruption, john key, national, Politics, Public Private Partnerships, same old national, Steven Joyce -
Tags: sky city
I have followed this issue for a while.
Originally this Government decided to grant valuable gambling concessions in consideration of which Sky City would build a new convention centre. Simple really. Let Government sacrifice its sovereign right to legislate for the public good by giving a private corporation an income stream in consideration of which Auckland gets a shiny new building.
Let me break this down even more. Allowing a corporation to increase the incidence of gambling with all of the attendant misery is worth something to it, so lets give it power to increase gambling in consideration of which Auckland gets an extra convention centre and John Key gets a ribbon cutting event.
The Government has thrown a lot of PR at it. Yesterday it and Sky announced:
Sky City previously tried to get Government to pick up more of the tab. The estimate of the value of regulatory benefits varies but one estimate is that the cost of the original convention centre could be paid by three years of the anticipated increased earnings. This was the deal of the century where the Government sold increased misery so Sky City could build a shiny new building. And going back and seeking further contributions from Government showed an utter disdain for political sensitivities not to mention a complete lack of moral standards.
This is not a “win win”. Sky City had a contractual obligation to build a big enough convention centre so that a certain amount of economic activity was going to be generated. It is now building a smaller centre so that less economic activity is going to be generated but it still gets the same regulatory concessions. The Government should pull the pin on this deal even if it does rob John Key of a ribbon cutting opportunity.
The Sky City Convention Centre will be this government’s single largest economic development project in its 7 years. It will also be the single largest building in the country, and stand as John Key’s great political monument.
It won the job in 2011 with a $350m construction bid. By 2013 that cost was $402m and government had to agree to gambling concessions worth $527m, and valuable TVNZ land was thrown in as a sweetener.
With the massive design, cost, capacity and legislative alterations required for this job, those original losing bidders, The Edge, Ngati Whatua, Infratil and ASB Showgrounds, now know the extent of this corrupted process. It is a shame they did not judicially review the award process. If they had the results would have been interesting if not potentially damaging for the Government.
This is clear when you think of the history of the matter. In May 2013 this government announced that the centre would cater for 3,500 delegates, attract 33,000 more of them to Auckland, and generate 1,000 construction jobs. The latest announcement shows that its specification and benefits have been scaled back faster than a Treasury GDP forecast.
Andrew Little’s quote that “it’s not a Convention Centre, it’s a Concessions Centre” seems very apt.
When it opens, will this be what we should have spent $527 million – and Parliament’s independence – on?
Update: it looks like some sleight of hand is going on. A supplemental agreement has been entered into by the parties. Under the supplementary agreement entered into by the parties there is a change of contractual terms applying to “future development unit” land and under clause 4.2 a Sky City acknowledges that it has “derived additional value from the redefinition of the land and Future Development Unit”. Presumably now it has more land that it can deal with in which ever way it wants to. So the Government has in essence kicked extra money Sky City’s way by reducing Sky City’s contractual obligations.
The current rise of populism challenges the way we think about people’s relationship to the economy.We seem to be entering an era of populism, in which leadership in a democracy is based on preferences of the population which do not seem entirely rational nor serving their longer interests. ...
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look for SKC in the gainers column today.
How do the gambling concessions work MS ?
Does the taxpayer really end up spending half a billion on this white elephant…if so what an incredible waste of money.
The opposition must make it very very clear that future parliaments will not be bound by John Key’s unethical manipulations.
Good luck with that.
Thanks.
Well they aren’t. Parliament is sovereign (at least till the TPP is signed), so future parliaments are not bound by John Key’s unethical manipulations. Future parliaments are in fact, not bound by anything.
Not even the rule of law, apparently.
While this is the case Sky City has a contract which says it is paid penalties if the Crown changes the regulatory concessions. Of course an act of Parliament changing the terms of the agreement would conceivably change things.
That contract has as much validity as a John Banks election return.
It’s actually SkyCity that has broken the contract and should be up for millions in penalties.
but the aggrieved party has elected not to cancel or seek damages for that breach and continued the contract, so that breach would no longer be actionable
SkyCity is exactly the sort of organisation that I suspect wouldn’t hesitate to bring in the lawyers if a future government removes the concessions… and even without the TPP it would try its hand on breach of contract? Bear in mind that Sky has probably breached the contract BUT the Government has not actioned it so it cannot be revisited in the future as a defence or counter argument.
TPP would only apply if SkyCity was a non-NZ company, wouldn’t it?
hmmmm is its parent company nz based?
Think so. I guess they could always change that to suit themselves anyway.
Yes, just like Labour will roll back the 90 day trial (nope).
What Labour will or won’t do is rather immaterial to the sovereignty of Parliament, which you seem to doubt.
And that is a potential problem with TPP investor clause. SkyCity is exactly the sort of organisation that I suspect wouldn’t hesitate to bring in the lawyers if a future government removes the concessions…
Mind you, it would allow a legal light to shine on the original deal and what was delivered (hence the supplementary paper – imo).
“SkyCity is exactly the sort of organisation that I suspect wouldn’t hesitate to bring in the lawyers if a future government removes the concessions”
What is to stop a future government to make some other laws such as…(say)
(1) Making pokie gambling illegal in NZ.
(2) Taxing Gambling joints at 80% above a certain threshold.
(3) Restricting opening hours to 8 hours max, say from 10 am to 6 pm.
(4) Making alcohol/smoking consumption anywhere in the premises illegal.
(5) Workers to be on collective employment contract.
(6) ?
Surely, there are other direst and indirect ways for parliament to deal with the general huge evils of gambling rather than by blunt ‘removal of concessions’ to this particular crooked pro Sky BS deal?
not under tpp
The TPP doesn’t affect sovereignty. It introduces the concept of compensation for acts of Parliament that cause material losses.
All we need to do is adopt it universally to apply to citizens and businesses alike, and make it retrospective by thirty-one years.
yes it does, which in turn could mean that something stops at Bill level due to threats of legal action and damages which would be damaging to the nation… it could mean a repeal of a Law in response to a case. That means the sovereignty of Parliament is compromised.
If you look up the gambling – you see the words venture, hazard, speculation as it’s synonyms. These same words which underpin all the media and popular propaganda around modern capitalism. It’s a game to them – their economic model, is basically a game of chance.
Morally speaking – because let us face the facts – gambling is a problem – and the so called market can’t check it – because the so called market, is in on the racket. The damage of gambling is passed onto the consumer, which ultimately means – the families of gamblers.
So essentially, we have government who is happy to spread misery – by getting into bed with the peddlers to our base desires.
Welcome to modern capitalism folks – I hope you like being a plaything for the capitalist of the 21st century.
+1
The alternative was tax payers stumping up 500 million
The alternative was not building the centre in the first place. The economic benefits are illusory at best.
+1
There’s no possibility that the Auckland convention centre will produce the economic returns promised but it will produce the misery that will be detrimental to our society and our economy.
+1 In more than a few of the Auckland Council public meetings that I attended, the requirement for a convention centre is accepted as a given. Very little dissent is expressed, but the economic and social costs of this for NZ are very high and real, while the benefits are supposed.
WE have a convention center in Aotea Sq, the ratepayer owned Aotea Centre.
Skycity has a convention center as well, for which they received extra pokies , thanks to Judith Collins and the then Casino Control Commisiion ( laugh) in about 2000.
Wait till the ratepayers find out we have to support Skycitys running costs as well, once this so called convention is built.
Can you walk me through that T Chris? Are people in Auckland crying out for a convention centre? Crowds out on the streets chanting “Whaddawewan…”?
Nope.
Once upon a time, T Chris, there was a milkmaid, and her name was Judith…
It’s like Chris has blotted the Aotea Centre from his mind… as have too many Aucklander’s. That was the last convention centre built to be a boon to our local economy. Which wasn’t. Which was a white elephant. For all the same reasons Ttreasury provided Joyce and Key.
“Once upon a time, T Chris, there was a milkmaid, and her name was Judith…”
OAB,
Link doesn’t take us anywhere! No milk!
Links to a pdf – the Skysore timeline.
That is ridiculous, the alternative was
1. not having one
2. taking Treasury’s advice regarding the lack of economics behind relying on a convention centre
3. Getting what was contracted
4. having more savvy economic and business manager’s negotiating on behalf of the Crown rather than Joyce and Key.
I can only hope Andy Little can keep this story alive for as long as possible….this is a real vote winner, and game changer for Labour…..
Well, you’re either naive enough to believe that, or naive enough to think that anyone here will take it seriously.
Which is it?
You didn’t acknowledge his/her genuine concern
😈
Apology for attempt at sarcasm.
Following some interesting debate, I thought the key for labour would be to try and be more relevant on the things that matter. This issue, I suspect, is not going to make a jot of positive difference for Labour, when the Nats can make the “you bunch of hypocrites call” wrt to Labour MP’s enjoying Sky City hospitality…..Maybe just highlights that labour is short of ideas and good policy.
So short of ideas and good policy, in fact, that the National Party keeps passing watered down versions of it.
matthew hooton is one of the loudest naysayers. pretty sure he isnt Labour
This hurts National. Their focus groups say so. This is why they backed away at a million miles an hour from the idea of providing further government money.
This current arrangement provides increased value to Sky in such a way that the Government can deny doing so.
For that amount of damaging public concessions from gambling, I would have hoped the Government would have required Sky City as part of the deal to deliver x number of conferences per year, to be sure the economic balance from the social wreckage of gambling.
At minimum a publicly-published schedule of each conference, with its economic benefits, from Sky City, for all to see and critique.
Right now I see no public accountability from either Sky City or the government for this immense degree of social damage within the $500m+ gambling concessions. There should be.
Thanks Ad. I just had a read of the supplemental agreement and the Government made further concessions to Sky City by way of giving them greater freedom to deal with some of the land. The house truly always wins …
Especially when the house owns the government as well.
Have you heard any mutterings regarding the Youth Town land/property in Auckland City, lead poisoning from unregulated use of basement for firearms practice and SkyCity getting to purchase without public tender?
No look forward to seeing the details …
It’s abit murky. All I have is the version of a former employee and partner.
They assert that at some stage (before this employee was employed by Youthtown Inc – which is an “end-user trust”) the basement was leased to a gunclub. However the gunclub used lead based bullets. Over the years the dust etc permeated the building (apparently Auckland City doesn’t know) making it a hazard. When this employee was hired one part of the role was Health and Safety.
They assert that the Youthtown Trustees/Board realised too late the problem and felt they had an unsaleable and unusable building. SkyCity at some point became involved and offered to buy the site. Notwithstanding Auckland’s hot property market the property was not put to the market but sold to SkyCity.
I have looked over the website and googled. The last financial statement recorded on their website is for 2012. However on the Charities website they are up to date in their filing. Their 2014 return shows
Land 9,660,000
Buildings 1,840,000
I guess the next return will reveal if there was a sale and how much they got. SkyCity will also disclose in its report in 2015?
“Firefighters have contained a blaze at an empty central Auckland recreational centre.
Thirteen fire service units have been at the centre on Nelson St since 5:10pm today after a transformer caught fire in the three-level building’s basement.
There have been no reports of injury and the extent of the damage is not clear yet.
The building has been empty for some time, and has not operated as a recreational centre for over a year.”
11 May 2015
http://www.3news.co.nz/nznews/aucklands-youthtown-on-fire-2015051119#ixzz3bNb22lfY
No more lead problem???
Oh did I mention the youthtown building is on 68 Nelson Street where the new SkyCity hotel is planned? And SkyCity has only referred to its purchase of TVNZ land as accommodating the hotel BUT that purchase was about a year ago and the YouthTown building has been vacant for about 12 months.
http://tvnz.co.nz/business-news/skycity-reveals-plans-new-auckland-hotel-laneway-6055096
One further gain that Sky City have is that in getting the TVNZ land in Hobson Street it left TVNZ who have a server room underneath the land with no choice but to relocate. I doubt if there is room to move the server farms back into the main building server room but even if you did it would remove part of the plan to have parts of the network equipment separated. I understand that they are now looking at building (duplicating) the system in Wellington newsroom in Lambton Quay which of course as a DR site is pretty useless when you consider Wellingtons earthquake risk
There was a perfectly good backup in Avalon but that was sold so TVNZ could make a gift to Government.
Whatever the outcome TVNZ have been forced to hire building space from Telecom for several years whilst their building is refurbished the only winner seems to be SkyCity
Exactly. What has it cost TVNZ (ie. us) to do this?
MS: Because you are all socialists who don’t believe in free markets and the price mechanism, you are underestimating how dodgy this deal is.
This was my take on it some months ago in Metro:
http://www.metromag.co.nz/city-life/columnists/market-force/
You could have written that without the churlish labelling…
Yes, but this is The Standard and I want to fit in to the generally accepted tone and style here …
Churlishness is reserved for people who have done something to warrant it:
* Whatever stupid thing the government, or minister, has done this time
* Whatever stupid thing a commenter has said that makes no sense
In this case you’re replying to the original post, rather than a comment, and your subject is “socialists” rather than someone who has demonstrably done something dumb. So you’re a bit out of line.
I guess you don’t understand the culture here.
The tone here is appalling. It didn’t used to be. Back when Labour was in power, there was much good natured bantering back and forward. Now, it’s all just so nasty.
I would imagine being governed by a bunch arrogant arse holes who believe that anything goes in the pursuit of power might have something to do with it .
@b waghorn: Sorry to hear that. Will it be more of the same over the next five years?
I think the nats are beatable it got a lot closer at the last election then some are willing to admit .
Yeah, I think the Right’s attacks on Helen Clark’s marriage demonstrated your character so clearly that people are taking a while to get rid of the sense of contempt and disgust.
Or maybe it’s your hostility to the rule of law.
Surely you jest, Gormless? Though I do miss Robinsod’s ‘good natured bantering’, the early days of TS were pretty much unmoderated and tended to be tolerant of abuse. The pendulum swung the other way for a while and there may have been too much moderation. I reckon the balance is pretty good now, with most commenters showing respect for the forum and those that don’t get it have moved on or been moved on.
The quality of the discourse has improved greatly over the years, which is reflected in the improved reader numbers. Like a lot of blogs, TS is still overly macho and not a particularly welcoming place for women with opinions. So, still some work to do.
The ‘sod was cutting but always funny and willing to take the piss out of himself when the situation demanded.
Interesting observation thanks. I notice at some other forums it doesn’t matter who is in power, the tone is always laced with a nasty superior undertone.
*sigh*. Not the way that I remember it. I’d say that you have a very very selective memory (not that is anything unusual).
It might have been a little like that in 2007. But it certainly wasn’t in 2008. What we had then was some of the most atrocious organised trolling by right wing idiots.
What we used to get then was organised bully gangs coming in from Whaleoil and Kiwiblog and crapping all over the site and the people writing here. They’d all say roughly the same things, essentially the Crosby Textor line of the day. Probably the fools organised to do it were too stupid to think of anything different. They’d attack any left commenter who disagreed with their PR driven thesis. The crap to content factor rose alarmingly.
Eventually it got so bad at the start of 2008, that my idealistic fellow authors let Irish, Tane and I to start to deal with it.
But unlike your idealized fantasy, the reality isn’t hard to find. Just go back to the archives for early 2008, pick a post with a large number of comments and read them. Boring as hell with ‘Hulun’, ‘Helengard’, and the most ridiculous moron lines seen in NZ politics. It wasn’t until late in 2009, that we finally got rid of the dickheads who used slogans to think with.
These days when I see fuckwits trying that kind of 2008 stupidity, we just ban them. After all this site is for people of the left to discuss. People writing here tend to be a bit short with stupidity simply because they have gotten used to a better standard of discussion than you long for.
I’m (as you’re aware) very short with it because I have seen rather too much of the stupid tactics over the years. I’ve seen how they play out, and I’m perfectly happy to cut them off with extreme prejudice. In my view, this enhances the site.
Evidently readers agree. In election month 2008, we had about 100k page views. In 2009 we had less than a million page views in total. In election month 2011 we had 524 thousand page views. This month, a pretty normal month, we are going to have about 540-550k pages. In election month last year we had 868k page views.
There is a trend there and that is that we’re striking a good balance in terns of what people want to read, both in the posts and in the comments. But if you want to comment on how we run our site, then please feel free to continue. You know our policy on it…
Yeah. Pretty good example, actually. Your point could have been made without the repeated digs at me.
The “digs” express my contempt for your blue tinged nostalgia and inability to see how the same thing looks different to others. You haven’t expressed an opinion why we should restrict them. In particular after I provided some explicit information about the site growth despite everyone making “digs” at everyone else.
What you appear to be saying is that people aren’t allowed to express their opinions about the idiocies of others? At least not when you think that they shouldn’t.
But in my opinion, you “dig” at others just like that all of the time. That you probably don’t view it that way is rather irrelevant. It is in the eye of the beholder that matters.
Should we put in a hypocrisy based ‘gormless’ rule and start banning those complaining about ‘tone’ of others for them then dropping the “tone” themselves (in the view of the moderators)?
Admittedly it’d make banning the unthinking pompous gits easier – they usually have too much ego obscuring their awareness of how they look to others. But I’m pretty sure that it’d also depress the comments and readership as well. That is because judging it will be completely arbitrary and depend almost entirely on the cultural milieu of the moderator.
We moderate on behaviour rather than the kind of beholder based subjective judgements like you are proposing, and it is done for exactly the reasons that you are trying not to look at too closely.
But hey, you’re a critic rather than someone who has to run the ruddy place eh?
Unthinking pompous gits, indeed.
Oh don’t worry Matthew you set the tone on every occasion you post…
I saw the artists impression of the convention centre in the NZH. It looked better suited to be erected down on the port where it would have blended in with the containers.
Heh!
Thanks Matthew. Obviously your right wing deeper appreciation of the power of greed means that you can analyse this more fully. This comment of yours in your article deserves repeating:
“The most valuable part of the deal to SkyCity was the extension of its Auckland casino monopoly from 2021 to 2048, more than a quarter century longer. The government legislated away its right to auction this licence later this decade. It’s of enormous value to SkyCity, and its competitors would also have entered the bidding, if only to drive up SkyCity’s ultimate price.”
Interested on your take on the share price movement. There was a clear spike the last time the Government made an announcement. This time things appear to be much more muted.
Yep, that’s the key paragraph, and you seem to get it much better than the daily media!
On the share price, I think the market has been expecting this outcome.
Just my opinion, but
I would rather have a few more pokie machines in a controlled place which people actually have to have the cash to get to than hundreds of pokey rooms in every second pub with vulnerable people chucking all their cash in
You mean people like this?
http://m.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11453261
No, Tracey. Normal people who want to have a bit of fun, who are not addicted to machines, who want some entertainment. Normal people.
Money launderers, for example. Sorry, not money launderers, major donors. Forget I said anything about money launderers.
What does this have to do with a few extra pokies?
The attendant vice, misery and corruption. That’s what it has to do with them.
Ohh
So with out these new machines there wouldn’t be any?
Is that what you think would happen? Tying your own shoelaces too I see.
so if misery exists you don’t mind increasing it, cos it was there to start with…
SkyCity “gives away” exactly the percentage proscribed by the Act. No more. They get to choose who they give to.
And they are all monitored and in one place people have to travel to.
you probably need to understand that only a small minority of problem gamblers get trespass orders on themselves from skycity. Those are the gamblers skycity watch. the majority of problem gamblers dont do such self actualising things and skycity does bugger all to address them.
Chris’ implication was that this casino was a safe and more nurturing place… I just wanted to show that it is not entirely nurturing and safe
I’m not saying that at all.
I’m just saying they are better than the hundreds in pubs
kind of like grievous bodily harm is better than murder you mean?
By normal do you mean like you?
No
I’d rather have no pokie machines.
Fortunately we live in a society where we can exercise our free will to choose what and what not to do.
Well, not quite everything.
To quote Devo, what we have is freedom from choice. We only have the illusion of freedom, but when it conflicts with the needs of capitalism, brutality rules. Ask fans of Campbell Live.
yes but with a JSM rider that many who make your statement conveniently omit.
Does he even realise there was a time when we didnt have pokie machines at all.
Breweries and club owners changed that with a lot of help from poky machine manufactuers.
he doesnt even know who he is clumsily half quoting
It’s a good thing that poor people don’t know how to drive to central Auckland. If they do make it they’ll be looked after by a responsible host who will kick them out or get them help with their problem at the first sign of gambling addiction..
My, you have been guzzling the kool aid.
help with their problem of gambling addiction– all platitudes.
Zero surveillance of gambling problems but very high surveillance of staff to see that all that lovely cash isnt being pocketed. Pit bosses would never refuse a customer to continue gambling. The pokie ‘battery hens’ only get attention when there is a large payout.
The looking after gamblers myth at Skycity is similar to Fonterra saying dairy polluters get turned away- in reality it has never happened.
Who is looking HARD at the fact that Sky City have effectively been allowed, in my considered opinion, to set up a ‘money-laundering factory’ in the heart of Auckland City?
Gosh – wonder what THAT’$ worth?
TITO – Tickets In – Tickets Out technology – where you can launder dirty money and transform it into clean money?
How convenient ….
How come, there was effectively no ‘due diligence’ done on the increased risk of money-laundering arising from the Sky City ‘deal’ – then the subsequent legislation to entrench the deal?
New Zealand – purported to be the SECOND ‘least corrupt country in the world’ ?
(Transparency International’s 2014 ‘Corruption Perception Index’ – based upon the subjective opinions of anonymous Businesspeople?)
Please be reminded that Auditor-General Lyn Provost failed to disclose that she had a shareholding in Sky City at the time she declined to conduct an inquiry that I requested into a matter relating to Sky City.
And who is the principal ‘sponsor’ of Transparency International New Zealand?
Oh – that’s right.
The Office of the Auditor-General.
Join the dots ……
What a crooked line they make – in my considered opinion as a proven anti- corruption / pro-transparency campaigner.
Penny Bright
http://www.pennybright4mayor.org.nz
It has been a money laundering factory for 15 odd years. A few more pokie machines is hardly going to change this
That’s right. Aggressively taking compensation for all the harm they do is a far better alternative, along with immediate cancellation of all licences. Policy to make investors feel lucky to escape without seeing the inside of a jail cell.
I’ve always found it harder to part with my hard earned when the folding stuff is in my hip pocket. The cunning plan of a cashless society makes it easier for the mugs to swipe the plastic fantastic for the instant gratification gambling provides.
Gamblers tend to forget how much they’ve lost chasing the big jackpot, until that is, the credit card bill arrives in the post.