Christchurch City Council assets

May 22nd, 2013 at 10:00 am by David Farrar

The Press reports:

A Christchurch city councillor says the city could offload non-core assets, including its own offices, to help pay its share of big-ticket rebuild projects.

Cr Tim Carter said last night that less important assets were expendable if it helped ease the council’s debt burden in funding anchor projects such as the new convention centre and roofed sports stadium.

“We should question whether we should be owning half of the civic office building and the Henderson properties.

“The Henderson properties … add nothing to ratepayers. The council had no plan for how we were going to develop them when the council decided to purchase, and we still have no plan.”

The council’s projected debt from earthquake recovery of $2.1 billion was not sustainable, he said.

“The council’s finances are in a very precarious position and we should consider our options rather than passing on higher rates,” Carter said.

He was against selling strategic, money-earning assets such as Christchurch International Airport, Lyttelton Port, Orion, and Enable, which is installing ultra-fast broadband in Christchurch.

The Council has adopted an absolutist position in which it will not sell any assets, no matter what. It’s a recipe for debt and massive rate hikes. Many commercial businesses sell some assets in order to purchase or build other more valuable ones. Decisions should be on a case by case basis.

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21 Responses to “Christchurch City Council assets”

  1. Manolo (13,327 comments) says:

    The Democratic Republic of Christchurch lives up to its reputation.

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  2. JeffW (320 comments) says:

    There is only one sound reason for any government to own assets such as the ones described. That is because 99% of politicians and their bureaucratic allies will waste any funds secured through a sell down. This position is one of timing, therefore, and not one of principle, i.e. as soon as there is no debt apart from that funding long term assets, government owned business should be sold. But why would any government get involved in building competition for already state owned assets such as TV One (which also be sold) and private sector ones such as Sky TV. I am of course talking of building ultra-fast broadband so that more TV shows and movies can be watched on-line and more games played. It is extremely difficult to see any logic in CHC council owning a company installing UFB.

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  3. xy (151 comments) says:

    Or we can, you know, NOT SPEND FIVE HUNDRED MILLION ON A NEW STADIUM. For some reason this hasn’t crossed Gerry Brownlee’s mind at ALL.

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  4. toms (301 comments) says:

    King Gerry and his cronies need to be entertained, you know.

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  5. YesWeDid (1,029 comments) says:

    So DPF you’re happy for the CCC to sell productive, dividend bearing assets like the airport and port to build white elephant ‘assets’ like a large stadium? Because that is what you are arguing for.

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  6. xy (151 comments) says:

    And it’s not like the council has any choice about building a stadium.

    Pursuant to section 24 of the Canterbury Earthquake Recovery Act 2011 (“CER Act”), the Christchurch Central Recovery Plan has directed the inclusion and removal of specific objectives, policies, rules and other methods in Christchurch City Council’s District Plan (also referred to as the “City Plan”).

    Section 24 does not entitle a Recovery Plan to direct amendment of descriptions, explanatory guidance and statements, reasons, anticipated outcomes, implementation and/or monitoring provisions. As such, these matters are not included within the amendments directed.

    The amendments are to be made by Christchurch City Council as soon as practicable without the use of Schedule 1 of the Resource Management Act 1991 or any other formal public process.

    The Christchurch Central Recovery Plan is a critical statutory document. From the time of notification (31 July 2012) of this Recovery Plan, those exercising functions or powers under the Resource Management Act 1991 must not make decisions that are inconsistent with the Recovery Plan. These functions and powers include decisions on resource consents, and preparing or changing planning documents. The Recovery Plan can also require that specific objectives, policies and methods are included in or removed from statutory documents. If there is an inconsistency, the Recovery Plan prevails.

    (In translation, ‘Fuck you, build a stadium. For RECOVERY.’)

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  7. Lloyd (125 comments) says:

    Many of the council assets are commercial enterprises competing with private companies for business. They are not ‘core’ assets, but businesses which exploit the advantage of council relationships and knowing that if they lose money the council will top it up (V-Base, the company which ran the Town Hall, Convention Centre, AMI Stadium and Westpac Arena lost $180million, and the council, on my behalf, paid for their ineptitude). Sell them, but be cautious about what the funds raised are spent on. A stadium should be last on the list.

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  8. s.russell (1,559 comments) says:

    YesWeDid,

    Perhaps it has escaped your notice, but CCC is a COUNCIL, not a company. The whole point of the exercise is doing things of benefit to the community that cannot sensibly be done on a commercial basis.

    What Carter is talking about selling are essentially businesses – which do not need to be owned by the council for them to be done. What councils must retain are the things that no-one else is likely to do.

    Of course the council would lose the dividends. But they would also lose the crippling debt, and the obligation to pay interest on that debt. Financially it should be a big win because the better the dividends the higher the price they will get for the sale, and what the council saves on debt will be bigger than what they lose on the income side.

    In the long run that is actually a far better outcome for the people of Christchurch than an ideological commitment to an ever-growing council empire that keeps swallowing and is unable ever to adjust its asset mix.

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  9. A.Ziffel (4 comments) says:

    The corollary to the advice to sell “non-core assets” is obviously not to acquire any more, such as a convention centre & stadium.

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  10. noskire (831 comments) says:

    I agree with Lloyd. A stand-alone stadium should be well down the list of priorities – it’s a big chunk of money to spend on a facility that will get used for less than 30 days of the year. Attendance at Super rugby games has been on the decline for the last few years, and even the “temporary” stadium at Addington with a capacity of around 17 000 struggles to sell to capacity.

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  11. Paulus (2,493 comments) says:

    Sounds stupid expecting the rest of the country’s tax payers to pay for the Council’s wants not needs decisions.
    But that’s the holy city where it could not happen to them. Everybody is expected to say “Poor Christchurch” here is our money for your wants not needs.
    Wait until Lianne Dalziell gets in. Then everything else will be coucillorized/local nationalisation.
    I get the impression that the rest of New Zealand is tired of the whinging and whining of Christchurch.
    They have received and been promised more money than anywhere else in the world could have dreamt of, in similar circumstances.

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  12. dime (9,368 comments) says:

    Flick the airport. open up another investment for all the kiwisaver cash.

    Build a glorious stadium! with a roof. awesome.

    Dime hates it when cricket gets rained out.

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  13. Jack5 (4,569 comments) says:

    “Flick the airport” says dime at 11.24.

    The city owns either two-thirds or three-quarters of the airport and its land. The Government owns the balance and if that is sold Ngai Tahu gets first and second purchase rights under its Doug Graham-Chris Findlayson settlement. Then there will be no tax on that portion of dividends.

    Some assets should be sold. THere’s the contracting civil works company that does work around the country, and the city could sell at least a decent size slice of Port of Lyttelton. And what the hell is the city doing with a fibre-optics company. A minority stake in the lines company, Orion, would also be nice for investors.

    But fuck building a covered stadium, and to hell with cricket which is out to eat up a chunk of one of the city’s great parks.
    The flannelled fools at the wicket and the muddied oafs at the goal, as Kipling put it.

    Rugby and cricket should buy their own grounds and build their own stadiums. Asking all ratepayers to fund them while asking that assets be sold is equivalent to demanding capitalism for everyone-else but socialism for for yourself.

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  14. hannity (151 comments) says:

    “The Council has adopted an absolutist position in which it will not sell any assets, no matter what.”

    Bullshit,

    ” It’s a recipe for debt and massive rate hikes, ”

    Nope , more bs

    Christchurch has consistently had the lowest rates of all the big cities in the country.

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  15. dime (9,368 comments) says:

    ya know whats better than one stadium?

    TWO STADIUMS!!

    picture this – a cocked cricket ground of decent size. something like lords.

    then, a 50,000 seater for rugby.

    chuck a stadium levy on for accommodation, chuck on a levy for plane tickets and up the rates by a sustainable 68% a year for the next 5 years.

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  16. david (2,531 comments) says:

    I seem to recall that the Council already is only a tenant in it’s own HQ with Ngai Tahu being the primary landlord and beneficiary of the ratepayer’s rent largesse or did that proposal not get off the ground?

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  17. scrubone (3,044 comments) says:

    “The Council has adopted an absolutist position in which it will not sell any assets, no matter what.”

    Bullshit,

    So you can think of a situation where the council would consider selling some assets? Seems that if they won’t sell them now, it’s hard to see when they would. I’d call that an absolutist position.

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  18. unaha-closp (1,111 comments) says:

    Christchurch City could purchase Forsyth Barr stadium from Dunedin.

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  19. xy (151 comments) says:

    I live in christchurch, we don’t want to spend money on a fucking stadium and convention centre, we’re still fixing the roads and sewers.

    People who have rebuilt their businesses and buildings are having their land forcibly acquired by the government in order to build this stadium. These buildings are going to be demolished. Utter stupidity, but hey, business-friendly government means property-developer friendly.

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  20. Viking2 (11,125 comments) says:

    YesWeDid (884) Says:
    May 22nd, 2013 at 10:36 am

    So DPF you’re happy for the CCC to sell productive, dividend bearing assets like the airport and port to build white elephant ‘assets’ like a large stadium? Because that is what you are arguing for.
    ===============================
    No.
    But we will be happy for CHCH to use the money to recreate its assets that are destroyed. Once its up and running again it can establish new income earning assets.

    see no reason why the taxpayer should have to fund this stuff.

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  21. hannity (151 comments) says:

    ” So you can think of a situation where the council would consider selling some assets? Seems that if they won’t sell them now, it’s hard to see when they would. I’d call that an absolutist position.”

    Except that the CCC havent adopted an absolutist position.

    DPF has , on their behalf, which is handy if his aim is to dupe idiots, but has nothing to with reality in CHCH

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