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SkyCity a nightmare for the Nats

Written By: - Date published: 11:15 am, January 12th, 2015 - 76 comments
Categories: accountability, business, economy, john key, Steven Joyce - Tags: , , , ,

Thanks to Key’s fast and loose interpretation of proper process, SkyCity have played the government for fools. The Nats probably hoped to sweep the issue under the carpet with the traditional Christmas bad news dump (this year in brand new super-size!). No such luck. Even their most sycophantic commentators are concerned. An anonymous Herald editorial in December sums it up bluntly:

Economic Development Minister Steven Joyce says taxpayers are the Government’s “least preferred” solution to a blowout in the cost of SkyCity’s Auckland convention centre. He should not even think about it. One of the alternatives, he says, is an Auckland Council contribution. He should not think about that either.

Now to kick off the new year, David Fisher has the first of a two part series in The Herald:

Special report: A most unconventional agreement

After two years hammering out the agreement, SkyCity and the Government have yet to agree a design. The original timetable shows a final “detailed design” to be completed by July. The documents the Herald obtained show SkyCity started making changes almost immediately after it secured land from TVNZ in September 2013. The most significant was the placement of a 300-room hotel on the TVNZ land. SkyCity had said for years the land was needed for the convention centre.

At the end of last year, SkyCity said the original $402 million cost had been “revised” to $470-530 million. … Mr Morrison said SkyCity wanted a taxpayer top-up and told Radio NZ: “If New Zealand doesn’t want it … we don’t have to do this.”

There is nothing normal about the SkyCity deal, says international business mentor, management consultant and academic Patrick Rottiers. “Is this about the convention centre or about extending a virtual monopoly? The two are strongly linked from the beginning.”

Long time Standard author Eddie predicted this mess back in 2012 (see lprent’s recent review) – so why was no one in government able to see it?

Far from fading away into the Christmas haze, this looks likely to be one of the defining political issues for 2015. It highlights National’s poor process and the incompetence of two of their leading players, Key and Joyce. They will be desperate to at least avoid coughing up taxpayers’ money for SkyCity’s new demands. But SkyCity have leverage, if they walk away that is a disaster for National too (though good for NZ!). Expect some sort of messy compromise and claims of victory all round.

76 comments on “SkyCity a nightmare for the Nats ”

  1. OhMyGodYes 1

    National = the Banana Republican Party

  2. karol 2

    Yes. Well said, Anthony.

    I’m not sure it’s showing up Key and Joyce’s incompetence, as much as their MO. They didn’t expect to get such media coverage, maybe? Thought they could get away with the public spin, while doing various anti-democratic machinations in the background?

  3. Draco T Bastard 3

    But SkyCity have leverage, if they walk away that is a disaster for National too (though good for NZ!). Expect some sort of messy compromise and claims of victory all round.

    The government should just be annulling the deal and taking back the land – all without compensation due to SkyCity breaking the deal. But, as you say, we’ll probably see some messy stitch-up deal that will end up costing us $600m+ for something that we don’t want and wont be used.

    • Colonial Rawshark 3.1

      Oh I think the Convention Centre will indeed be used – by the National Party annual conference.

      • Draco T Bastard 3.1.1

        And that’ll probably be paid for by us as well.

      • ShoreGirl 3.1.2

        And the Nats have used the well-priced Sky City suites, catering and conference facilities for years. The $10k per table fundraisers, that allowed the Tobacco lobby and others to flow money to the Nats, mostly took place there.

        Sky City has a very advanced, and necessary, HD CC system that allows their large security team to monitor just about everything that goes on in the massive campus.

        I doubt Len was the only guest to be indescrete at Sky City.

        Sky’s management are very well informed.

    • nadis 3.2

      Bear in mind the contract would have been negotiated by MBIE so good luck with the govt finding sympathetic outs. This shambles, and a donation to the next Americas Cup campaign are both a step too far for many people I know.

      • Draco T Bastard 3.2.1

        This was always going to be a shambles because it was a corrupt deal from the very beginning. That said, the government doesn’t actually have to find sympathetic outs as SkyCity has already given them one as it’s them who are set to break the deal by refusing to build it for the agreed price.

  4. Atiawa 4

    SkyCity have the deal of the century – additional pokie machines, a monopoly, Asian tourists who love to gamble and an extended licence period (2040+).
    We were told by the government that this deal was a win – win. SkyCity said jobs would be created and the convention centre would be great for the country & especially Auckland city.
    They should be told to get on and build the place or move them on.

    • One Anonymous Bloke 4.1

      The Left must explain to them in no uncertain terms that future governments will not be bound by bribes accepted by the National Party.

  5. upnorth 5

    Has anyone caught the sickening PR ad’s about how skycity cares for Auckland/workers/sport teams etc that ran pre-xmas??

    Saw one on Maori TV, was stunned at how dishonest it all seemed.

    The PR campaign to steal our money has well and truly begun. The focus seemed to be on “our Auckland” so looks like they are eyeing up the ratepayers funds.

  6. SkyCity a nightmare for the Nats

    Excellent – they’ve worked so hard to earn it.

  7. tracey 7

    And SkyCity used Christmas to launch it’s we are good for Auckland and are kind and benevolent employers, campaign…

    They have a carefully constructed campaign to rort us, first the taxpayers, then the ratepayers and all for their shareholders.

    Auckland
    Christchurch
    Queenstown
    Wellington

    ALL building new international convention centres in a convention market that the Govt report said would struggle to make ONE viable.

    • Sacha 7.1

      As has been pointed out before, the proposed Auckland convention centre is in a different global market because of its size. Even then it seems they are assuming only ten max-sized events each year. The other new centres are rubbish, for sure.

      • tracey 7.1.1

        dont you believe it. Queenstown will get competition from international orgs looking to host in a great place.

        Aucklands convention centre is an excuse for Sky City to expand, nothing more. Aotea centre was the forerunner and it was a bloody white elephant too.

  8. Matthew Hooton 8

    Any government that gets mixed up in deals like this deserves all the blowback this one is getting. Among other things, 1984 was about putting an end to this nonsense.

    • greywarshark 8.1

      MH
      I think Orwell was onto it.

    • Once was Tim 8.2

      Then you’ll have no problem sometime in the future @ Matthew (with 2 ‘t’s for tit and tat) when some forensic accounting is done. Nothing is permanent as they say, and as you’ve agreed in the past on “From the Right ……. and ………From the Right” – a new gubbamint is not constricted by a previous one (indeed even retro legalisms can be fair play).
      I’m just wondering which ‘side’ you’ll be on when compensation is sought (and taken if necessary by way of legislative means). I bet it’ll be the same side as the likes of Rodinus Hydus screaming “property rights and theft” whilst wondering whether trendy-high-fashion-labelled-underwear is still appropriate other than his Jockey y fronts in anything other than white [just so his skid marks don’t show].
      I’m not sure the left has got its shit together enough thus far to see the legitimacy in such a proposal (but as I say – nothing is forever as those damn pesky Murrays have learned – along with their bloody Murray Courts, and their bloody inconvenient decisions, and their bloody Murray Jujizz – they’re all getting a bit earta hen eh? Mat-t-hew/!).
      When it does all come to pass tho’ Ma-t-t-hew – please keep the hissy fit screaming down a peg (such as that regular gal even doesn’t need to feel embarrassed by the proposition; Oik can keep his “tends to agreements” to a respectable level, such that we know he’s at least A BIT Labour ), and the rest of us as an audience can actually engage – without thinking of youse fellas as complete fuckin idiots who’ve become so ‘bubble inflicted’ they’ve lost the capacity to see the BLEEDING OBVIOUS.
      I was thinking (btw) that ‘ole Croz Textor – and even that [pathetic specimen on the Kepti Carz – Croz Walsh – [shadz of that fek checka that regularly pops his gery/beige irrelevant bullshit head up on here sometimes – Pete…. Pete….. oh yes Pete George)] must be worried and thinking about the next load of spinmeistering – especially given gai Pareeeee [could be a game changer eh? ma-t-t-hew??? ]. You’ll be earning your keep pretty soon. Maybe even sooner than soon (You should maybe go back thru’ the archives to check the previous bullshit and see if there is some way in which you can reconcile it all and appear rational)
      Remember tho’ – in any good fascistic operation – you need to keep the people involved in enforcement sweet’.
      You should be proposing bonus payments for the Polis and Army Corporals maybe – and perhaps a few in the SIS and GCSB (but remember they have la famile they gotta keep sweet as well). I note Greg O’C missed out on the “on-us” list this year.
      I suspect this year @ mat-t-hew. just clipping the tukit and adding a bit of jist could ekshly be a but more chellingjing. But then you’ll have had ‘learnings’ (of the Simon Brudjizz koind) from 2014 of course.

      • Shona 8.2.1

        Take a bow Tim,that’s some funny sh** in that rave. Having been driven indoors by the Aussie like heat we’re experiencing at present in the Far North I slump down in front of the Standard to be entertained so brilliantly. You’ve made my day mate!

        • Oncw was Tim 8.2.1.1

          Yea well …. unfortunately my visits here have to be intermittent for various reasons (child-minding duties and often unreliable access to the electronic media). When I do get the chance, The Standard is a sight worth visiting to get a glimpse of how ‘the left’ is thinking.
          It’s not my site and I have no right to make judgements – just observations. One such observation is that whenever the likes of a Hooten or a Mapp, or various others (whether dressed up in a variety of pseudonyms – as is their right) – you can be sure of an agenda.
          I’m considering a self-imposed ban because (as Paul and others have pointed out previously), wading through complete kaka and the bullshit of the ‘diversionaries’ – the Hootens, the Mapps, the Georges, etc., is really rather tedious and frustrating – but of course that’s PART of their agenda. Can’t moan tho’ eh? if we subscribe to the idea (as opposed to the principles) of ‘free speech’. (Those ‘diversionaries’ actually seek to suppress by means of running ‘flak’). I’m actually surprised I haven’t been banned, but as I say, I’ve been considering a self-imposed one. I know I’ve gotten a bit personal at times (such as with Rinny Ryan – the work-life-balanced regular gal, and the Hooten – but I always think …………. what’s source for the goose is sauce for the gandar (and if you did a basic content analysis of an Oik Williams contribution to MSM, you could be excused for thinking he is a neo-lib rat. Similarly if you did same on Natrad/Rinny Ryan’s “From the Right and From the Right” – little Matty’s hissyfits – when proven wrong to the extent they’re ekshly embarrassing go without sanction)

          So yea …….. like 50% of the population – it’s probably easier to just disengage and ignore the fucking lot of them (which is of course what they want). I’d rather use the source for the goose is sauce for the gandar option no matter what the consequence. Fuk em all – the long, the short and the tall

    • Murray Rawshark 8.3

      Yep, that book was indeed prophetic. Having to pay more is just another boot to the face.

      • Paul 8.3.1

        Hooton quoting 1984.
        What a joke!

        • Ovid 8.3.1.1

          I’d hazard Hooton meant the Fourth Labour Government and its ushering in of the Public Finance Act, the State Sector Act and all the other administrative tools shepherded by Sir Geoffrey Palmer for the sound public administration of the country.

          As it happens, Orwell published his book with the title spelled out as Nineteen-Eighty-Four, although some editions do have a numeric title.

          • Lanthanide 8.3.1.1.1

            Yip, pretty clear that’s what Hooton meant.

            “all the other administrative tools shepherded by Sir Geoffrey Palmer for the sound public administration of the country.”

            Unfortunately he didn’t also shepard through legislation to prevent the bullshitting Key and English get up to, such as the supposed decade of deficits (which they’ve now almost realised themselves), fairies at the bottom of the garden printing money, the “tax-switch”, the bollocks that only 30% (or whatever it is) of households pay tax, etc.

  9. Kiwiri - Raided of the Last Shark 9

    I would hate to think how much money SkyCity has been *donating* to the National Party, whether disclosed or through hidden ways.

    • ghostwhowalksnz 9.1

      The best way is using a legitimate company, let say a polling company, lets say Curia.

      You run some market research, polling the public on various things that interest Sky City. but you pay for some extras that interest the national party at the same time.
      Kaching!. lets do this for the next 6 months. kaching kaching.
      Not that Curia would do anything involving a contra deal for National party. Would they ?

      Rinse and repeat for a public relations firm close to the national party.

      Maybe even a ‘social media consultant’ , now who could that be?

      • Kiwiri - Raided of the Last Shark 9.1.1

        “a” social media [vomit: … ] consultant ?

      • tracey 9.1.2

        Hosking too

        • Peter H 9.1.2.1

          What about Paul Henry

          • tracey 9.1.2.1.1

            I was only aware of hoskings being paid by skycity, not henry?

            http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10795215

            • Peter H 9.1.2.1.1.1

              Google, Henry, Hosking paid by sky city, up it comes, about 50k a year each.That’s the dirty world we live in

                • Paul

                  Other ‘journalists’ compromised by their dealings with Sky City

                  Herald on Sunday columnist Kerre Woodham

                  • tracey

                    swaying the vote with their 1950’s “good ole boy and girl” hankering for the old and white days.

              • tracey

                thanks for the correction Peter… and to think TVNZ sacked someone for holding a LP meeting in a TVNZ room… as opposed to two broadcasters who can sway thousands of votes.

                • Paul

                  From the Herald in 2012.

                  ‘The relationship is a win-win for all involved, but is rarely spoken about. Some of the famous faces perform MC or promotional duties; other ‘ambassadors’ just have to be seen in the casino’s 25 bars and restaurants.
                  Former Warriors captain Steve Price has a lucrative private sponsorship contract with the casino complex. The Breakers basketball team also eat and drink there, as part of a separate sponsorship scheme.
                  Some celebrities have confirmed to the Herald on Sunday that they have been paid a retainer or given a “chairman’s card” that allowed them to dine in-house.
                  The paper has been told of $2000 monthly retainers.
                  One former celebrity “ambassador”, who spoke on condition of anonymity, signed a contract with a strict confidentiality clause. The person received a “chairman’s card” but no cash.
                  In return the source had to be seen at SkyCity twice a week for anything from coffee to accommodation. “I entertained a lot of influential people there. It was a fantastic perk.” ‘

      • Weepus beard 9.1.3

        Would not surprise me if Curia is into National Party money laundering.

        The guy in charge takes an awful lot of holidays and an awful lot of shitty pictures on those holidays…

        …then bores the skid-marks off the readers of his blog with repeated, dull tales.

    • Peter H 9.2

      Find out how many tv ,and radio personal, sky city, are monthly paying, to spread their, and nat party rubish

  10. Macro 10

    Talking of convention centres…..
    I was invited to lunch last friday at Waipuna Lodge …
    Waipuna Lodge is a Convention Centre when if I was asked where would I rather stay – overlooking a very attractive inlet surrounded by garden and quiet walks or stuck in the centre of an amorphous city? – there is only one answer.

    Apart from another couple we occupied the only other table in a very large restaurant.

    Ok I’m sure it was a very unbusy time, and one cannot draw too many conclusions from one observation – but just how busy are these places really?

    There is the real problem that those who promote events and event centres really overcook the benefits that will accrue. We see this time and time again, and still those responsible for consenting to the promoters demands listen to their bullshit and force the “Convention Centre”, Stadium, V8 car race, Yacht race, Sports complex, you name it upon the unfortunate – rate payers, and tax payers, and local inhabitants who are forced to pay the consequences when these “events” fail to realise the phantom benefits their promoters proclaimed would eventuate. The promoters, of course, then walk away, without a buy your leave, leaving the tab to those who did not want it in the first place.

    • tracey 10.1

      Aotea Centre in Auckland was state of the art, we were told, for its time, to give auckland its international convention centre.

      two word

      White
      Elephant

      History is repeating because right governments dont actually dislike government in business they love it, if it is a subsidy, they hate it if it is for pesky things like safety and accountability.

      • Weepus beard 10.1.1

        Yes, rightist ideology loves to sum up their case with the phrase: government has no business in doing business.

        Yet they adore the business elite, which has never been more obvious than when they head-hunted Key from Wall Street. And, they love nothing more than doing deals with Sky City and Peter Jackson using taxpayer funds, interests, and rights.

    • Molly 10.2

      Waipuna Lodge is a blast from the 1980’s past for me. Worked there while at school, and it catered to the locals – family buffets etc, and basic conventions. The hotel – while small, was a money maker for the Mt Wellington Licensing Trust which owned a few venues including the Duke of Wellington, Tainui Tavern and various off-licensing and bottle shops.

      The trust contributed to the walk around the basin that you mentioned, and supported a lot of local facilities (Swimarama) and were instrumental in building the bridge over the estuary (if memory serves).

      Due to series of bungles, including a fast and incomplete renovation for the 1990 Commonwealth Games the Trust was dismantled and the portfolio of businesses sold off.

      I’ve been back a couple of times and seen the emptiness that you have mentioned.

      I have no doubt that the convention centre will be this expensive emptiness for much of the time as well. I don’t think that anyone has yet provided a positive cost/benefit analysis.

  11. Big conference centers are great instantaneous prison facilities in case of public unrest. No other reason to build them here. The Hamilton one just makes a great big loss year after year. In Chili they used football stadiums as torture centers.

    • ghostwhowalksnz 11.1

      It only makes a loss, because the profit is directed elsewhere.
      The hospitality side of things, like food and drink would be under a management contract with another business, who might pay nominal charge for use of expensive equipment but make heaps on selling finger food and grog.

      Same goes for accommodation tie in. Pay a nominal amount to be preferred accommodation supplier and then rake in the money filling your rooms that would mostly be empty

      • tracey 11.1.1

        and is the “profit” first redirected to pay the interest on the millions of capital outlay to build it?

    • fisiani 11.2

      Paranoia. Close to a Godwin.

      • Weepus beard 11.2.1

        Trolling. Close to a(nother) ban.

        When will than be? Perhaps Sky City will take the bet.

        • mac1 11.2.1.1

          Fisiani is a very useful ‘telltale’. When he comes in, I know that the Nats are worried about the topic in question- sort of a go to pitcher for the blue team when the bases are loaded and the scores are tied in the ninth.

          David Fisher looks like he’s batting pretty well at the moment for the Journos on the Herald.

  12. saveNZ 12

    Sky City and Joyce are so arrogant of the general public and think tax payers money is just their personal spending. Predict a bit of attack politics to get the MSM spouting their tune. Joyce is obsessed with ‘convention centres’ again another one in Christchurch too. Not sure how many people are actually going to these convention enters especially since now anyone can be surveilled for 24 hours as soon as you come into this country without a warrant. Yep expect the problems to continue well past this if it gets built and yet another white elephant. Great we can have some more zero hour jobs to encourage gambling too!!! What amazing economists and cronyists the Nats are on their pet projects!

  13. Brutus Iscariot 13

    This is one case where i’d actually advocate nationalising the pricks as punishment for hoodwinking and blackmailing the people of New Zealand. Seize all their assets and offer them as a going concern to the highest bidder, with the proviso that the contract be honoured by the acquiring party. Then we’ll see how much value actually exists in the accommodations made for them!

  14. Treetop 14

    SkyCity are laughing all the way. It is not cheap to take a taxi in Auckland and SkyCity hotel rooms will fill up quicker due to the lowered blood alcohol limit. (Not sure if complimentary transport is run by SkyCity).

    Not sure how profits will affect other hotels/motels in the area.

    Complimentary hotel rooms would entice gambling and not sure if this is part of the agreement/consent.

  15. BLiP 15

    John Key’s lies about the Sky City deal . . .

    the Sky City deal will provide 1000 construction jobs and 800 casino jobs

    all five bidders for the convention centre were treated equally

    my office has had no correspondence, no discussions, no involvement with the Sky City deal

    I did not mislead the House (8)

    I can’t remember what was discussed at my meeting with the SkyCity Chief Executive on 14 May 2009

    I have no record of the 12 November 2009 email from Treasury advising that the SkyCity deal was dodgy and needed to be referred to the Auditor General

    there was nothing improper about the Sky City deal

    SkyCity will only get “a few more” pokie machines at the margins

    any changes to gambling regulations will be subject to a full public submission process

    Sky City has approached TVNZ about the purchase/use of government-owned land

    I did not mislead the House (9)

    this government has been very transparent about all its dealings with SkyCity

    I did not mislead the House (10)

    the Auditor General has fully vindicated National over the Sky City deal

    I did not mislead the House (11)

    the Deputy Auditor General supports the view that there was nothing inappropriate about the Sky City deal

    I did not mislead the House (12)

    I did not breach the confidentiality of the Auditor General’s Report into the Sky City deal

    the Labour Government did exactly the same sort of deal back in 2001

    Labour has promised to not revoke the Sky City legislation

    Are there yet more lies to come?

    • Chch_Chiquita 15.1

      How long will National need to be in govt before they start taking responsibility for what they do instead of using the infantile excuse of ‘Labour did it too’. Why no reporter is asking Key if he has no ideas of his own apart from doing what Labour did without giving it a minute of critical thinking (I’m optimistic maybe this will go through his thick skin).

      • Draco T Bastard 15.1.1

        How long will National need to be in govt before they start taking responsibility for what they do instead of using the infantile excuse of ‘Labour did it too’.

        The political-right never take responsibility for their actions.

  16. Murray Rawshark 16

    This reminds me of how the Mafia ran casinos in Cuba when it was “free”. We really are becoming a kumara republic. Gambling, commodity extraction, and private prisons are running the show. I never thought it would happen so openly. Maybe this is the transparency that Key promised us. We can all see that he is transparently not a Nixon, who definitely wasn’t a crook.

  17. Skinny 17

    How on earth the National Government conned the public that a national convention centre setup with a casino was a good idea astounds me. Revoke their gambling license and shut them down. Labour should be calling for an immediate law change.

    • Paul 17.1

      How on earth Sky city conned the government, more like.
      The public weren’t conned. This was driven against much popular dissent.

      • One Anonymous Bloke 17.1.1

        The National Party made a deal with a money laundering business. “Government” had nothing to do with it.

  18. reason 18

    I like it when Blip drops excerpts from his ever growing lists into the latest developments on subjects that the Nats and John Key have lied to us about before.

    The true story of the Sky city convention center is we have been lied to, conned and bull-shitted at every turn of this sorry saga by Key and the Nats.

    The scope of the dishonesty that has been engaged in by Key and the Nats over the sky city gambling den should by now be the focus of the story if we had a half decent press or independent media in this country.

    The whole thing has the MO and finger prints of those who play Dirty Politics all over it ……………..

  19. Cantabrian 19

    Joyce is the main architect of this disaster. Key may be untouchable but Joyce is not. The left need to target this Machiavellian puppeteer far more effectively.

  20. philj 20

    ” Key may be untouchable …..” You mean he has a disease ? Surely not. Please explain.

  21. fisiani 21

    Sky City will bring down the government. The sky will fall. This really matters to people.

    • Murray Rawshark 21.1

      It should. It obviously doesn’t worry you. You seem to love corruption and incompetence.

    • Paul 21.2

      What the hell matters to you, if this level of crony capitalism doesn’t concern you?
      Please also speak for yourself not other New Zealanders.

  22. Weepus beard 22

    It highlights National’s poor process and the incompetence of two of their leading players, Key and Joyce.

    This needs to be said again. Poor process = Joyce & Key. Clowns, the pair of them.

    Unfortunately, most New Cylinders don’t care.

  23. disturbed 23

    “Key may be untouchable but Joyce is not. The left need to target this Machiavellian puppeteer far more effectively.”

    Yes you are right, Joyce is a dangerous animal and will ride roughshod over due process until as Cantabrian says must happen to put this lizard down before he turns this Country into a banana republic.

    Thank you all those amazing bloggers here today, simply brilliant.

    Funny the usual NatZ trolls aren’t here and I have forgiven Matthew Hooten on this occasion as he did add a plausible blog citing how NatZ should have used the various 1984 Labour party Acts but of course NatZ wont touch anything with Labour attached for fear of getting a case of common sense.

  24. Cantabrian 24

    What I mean is that whatever reason Joe Public loves Key but Joyce is as unelectable as Brash.

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  • Progress towards simpler process for changing sex on birth certificates
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