It’s all anyone’s talking about in the garden city: another cost blowout for the stadium project. What it’s all about, how is it taking so long, and why is it so expensive? James Dann tries to answer all those questions, and more.
Why does Christchurch need a new stadium? Don’t they still play at Lancaster Park?
From the late 19th century until the early 21st, Lancaster Park was Christchurch’s home of sport. It played host to too many important events to list, with rugby in the winter, cricket in the summer, and Catholic icons like Pope John Paul II and U2 also spreading the good word there. But then there were a bunch of earthquakes in 2010 and 2011, and Lancaster Park was, like much of the city, in need of repair.
So… did they repair it?
Well, no. While three loss adjustment firms concluded it would have cost about $50m to fix, the Christchurch City Council (CCC) argued it was beyond repair, and that they should be paid out the full amount insured of $143m.
They got the money then?
Yes and no. Lancaster Park was part of the council’s “global insurance payout”, which also included all the pools, libraries, community centres and other council facilities that were damaged in the quakes. The council received $635m in the payout, significantly less than the amount they claimed for.
So did the council decide to build a new stadium?
Not really. The CCC released its draft recovery plan at the end of 2011, after a wide community consultation with more than 100,000 submissions. There was no mention of a stadium in the plan.
But the government rejected the council’s plan. Instead, they got a bunch of people together in a room to come up with the 100-day plan, released in mid-2012 and called “the Blueprint”. It introduced a number of “anchor projects” for the city that hadn’t been part of the council’s version, including the convention centre and the covered stadium.
So if it was the government’s plan, then the government was paying for it?
Not exactly. Some of the projects were to be led by the Crown, some by council, some run jointly. The stadium was to be developed by the Crown, but largely funded by the council. The two parties signed a cost-sharing agreement that set out who would pay for what. For the stadium, the government was to buy the land, $253m was to come from the council, and $216m was to come from a source “to be determined”.
$216m seems like a lot of money ‘to be determined’?
Yeah, there was a lot of pressure on the council from the government to sell off some of its assets to fund the costs of the Blueprint. But the council rejected this.
So is there still $216m that needs ‘to be determined’?
No. During the 2017 election campaign, Labour promised $300m to Canterbury to speed up the recovery. After they formed a government, $220m was apportioned to the stadium.
Great. So with that $220m from the government, and $253m from the council, they’ve got the $473m they need to build it. When does it open?
Um. Well, once they had the funding secured, design started in earnest. Then, in 2021, the design firm came back to council, worried about escalating costs. So the council voted to reduce the seating capacity from the originally proposed 30,000 to 25,000 to keep it within the original budget.
Great. So when does it open?
Not so fast. After the council voted for a smaller stadium, a campaign was launched to restore the 5,000 seats that had been cut. The rugby people got angry, and an online petition demanding the 5,000 seats be put back in attracted 20,000 signatures. A new motion went before council for the bigger, 30,000-seat covered stadium, now costing $533m, and all but two councillors voted for it.
OK cool. That was a year ago, so construction must now be well under way.
Not at all. The consortium doing the design work reported back to council last month that the $533m agreed in August last year for a 30,000-seat covered stadium would actually only be enough for a 17,000-seat covered stadium. To build a covered stadium that seats 30,000 people, as agreed by council last August, would need up to $150m more, taking the cost to $683m.
$683m is a lot of money. At least it’s a final number.
It’s not. The council can’t guarantee that it won’t blow out again.
$683m is A LOT of money. At least we’d have the biggest stadium in the country.
It’d be the fifth-largest sports ground in the country, behind Auckland’s Eden Park, Wellington’s Sky Stadium (the Cake Tin), Auckland’s Mount Smart, and Forsyth Barr in Dunedin. The Cake Tin cost $130m in 2000, and Forsyth Barr cost $225m in 2011. Even after adjusting for inflation, we’re still looking at a project costing two if not three times more than its larger competitors.
2011 is a long time ago. Are there any more recent projects you can compare it to?
If we look across the ditch, the CommBank Stadium in Western Sydney was opened in 2019, seating 30,000 (semi-covered), and costing $AU300m. The slightly smaller Queensland Country Bank Stadium in Townsville opened in 2020, seating 25,000, and costing $AU250m.
But they don’t have a roof.
The council reckons it could take out the centre part of the roof and save $35m, which is otherwise known as “two community indoor pools” or “one-and-a-half library rebuilds”. Scaling back the roof even further would produce greater savings, but they can’t accurately say how much. So let’s just stick with $683m plus the cost of the land.
$683m doesn’t include the cost of the land?
No, the government has already bought the land, and all the figures getting chucked around are just the construction cost. They initially budgeted $36m for this, but may have spent up to $60m. They also paid another $10m to decontaminate the land, so you can comfortably add another $70m for the land on to the project’s cost. But for now we’ll just stick to the $683m.
Right. Well… where would the council get that sort of money?
From you. And your neighbour. Rates. It’s how the council gets money.
I saw somewhere that it would only be another $39 to pay for the stadium – that seems like a bargain to me.
To fund the extra $150m required by the latest blowout would require around a 1.25% annual increase, yes. But that’s just on top of the already budgeted increase to cover the stadium. Rates are set to increase around 5% a year for the next decade, though the stadium blowout will see them hit 8.5% in 2025/26. The council puts the contribution of the stadium to rates as an additional “$144 per annum per average residential property occurring progressively between 2025 and 2027. These amounts would decline slowly over 30 years as debt was repaid.”
Thirty years? So by the time we’ve paid this off, Ed Sheeran will be 61?
Yes. And he’ll probably still only play Auckland and Wellington.
Doesn’t Christchurch have some sensible centre-right councillors who oppose any sort of rates increase?
Yeah we do.
So what do they think?
They’re all voting for it. One of them is running for mayor. He’ll probably win.
So am I. Just a year ago, five councillors, including mayoral candidate Phil Mauger, James Gough, and Aaron Keown, voted against the council’s long-term plan, concerned about the 54% rate increases projected across the next decade. Gough described the increases as “obscene and financially unsustainable”. Keown said council needed to “stop acting like drunken sailors at a spending orgy”. These so-called “frugal five” have routinely opposed council spending on things like cycleways, community pools, and libraries. But their frugality does not apply to stadiums, apparently.
Couldn’t the council sell something to pay for the stadium?
Well, the council had previously ruled out asset sales, but Gough has floated the idea again. It’s not clear which assets he means, though he has previously raised the prospect of selling off public libraries. The land under the current stadium could be sold. The council valued that at $2.6m, which won’t go far towards construction.
Yeah, about that. How did construction get so expensive?
Well, supply chain issues, labour shortages, pressure on the construction industry, inflation, Covid-19, issues with the site and land stability, war in Ukraine, lockdowns in China, the new Top Gun movie. Take your pick, really.
Oh yeah, Covid-19. Please tell me that all the projections for stadium usage factor in the ongoing global pandemic into their budgets.
I would love to tell you that. But I cannot. They do not.
That seems strange.
Strange is one word. Negligent might be another. The report prepared for the council states “this calculation is based on an optimistic use (maximum impact) scenario”.
The figures must be pretty impressive though.
The economic impact of the largest stadium is estimated to be $81.3m over a 10-year period. A bit over $8m a year for a $683m investment.
That … doesn’t seem great.
It’s not. The council’s own cost-benefit analysis put the return at 0.86, ie for each dollar we put in, we get less than a dollar back. And that analysis was undertaken when the stadium was meant to cost $473m, ie two blowouts ago. I shudder to think what the return would be now.
At least we’d get to see the All Blacks again!
Yup, the prospect of games against Scotland and Namibia is on the cards. Rugby’s back, baby!
What about the big games?
Oh, the stadium isn’t big enough to guarantee games against Tier 1 nations. New Zealand Rugby, unlike local councils, is run like a business. They put games where they can make the most money, so if you can sell 50% more tickets at Eden Park, you’re going to put most of the games there. The council’s own report suggests that to get the big games against Australia, South Africa or the Lions, it would have to pay an “incentive” to New Zealand Rugby.
An incentive? Sounds suspiciously like a bribe.
It’s not a bribe, it’s just paying the rugby union some money to make something that wouldn’t usually happen happen.
Riiiiight. At least rugby is putting some money towards the construction though?
Both New Zealand Rugby and the Crusaders have pretty definitively said they won’t contribute to the cost of the stadium.
Sorry, who are the Crusaders?
Oh, that’s the name of our rugby team. They’re quite good. Won again at the weekend.
Isn’t Crusaders a name given to a bunch of people who explicitly kill Muslims, and wasn’t Christchurch the site of one of the world’s worst anti-Muslim terror attacks?
Yes and yes.
And you have a sports team who call themselves the Crusaders, by choice?
Yeah. They refused to change their name, but they did take the man with the sword off their logo.
This doesn’t make any sense.
None of it does.
Christchurch City Council is looking for feedback from residents on the stadium, good or bad. You can have your say here until July 5.