Viv Beck is back. Pretty much the entire board is gone. What is going on?

Six out of Heart of the City’s seven board members resigned on Tuesday and they didn’t go quietly. The outgoing members of the Auckland city centre business association, which is largely funded by targeted rates, issued a statement calling on the council to audit their organisation and freeze its funding. The move brought to a head a months-long civil war between the board and the business association’s chief executive, Viv Beck. Reactions have been mixed. Some are sympathetic to Beck, who they say has been a staunch advocate for Queen Street businesses. Others support the board’s efforts to reshape the organisation. Still more are shaking their heads and asking “WTF is going on?” Thankfully The Spinoff is here to help.

How did we get here?

It all started with a survey. Back in October last year, Beck put out what the Herald dubbed a “scathing” assessment of the city centre, based on responses from 105 local business owners. The resulting coverage painted a picture of an area plagued by drugs and antisocial behaviour.

Some Queen Street businesses welcomed the coverage. Beck defended it as a means of getting officials to pay attention to a pressing issue. But Heart of the City’s board hadn’t approved the survey’s release. It came just before the vital Christmas period during a tough economic downturn and some board members worried it would put people off coming to the city to shop.

Sources told The Spinoff the survey was one of the precipitating factors in a period of upheaval at Heart of the City. Board chair Martin Snedden resigned soon after its release, unexpectedly stepping down before the end of his term. He was replaced as chair by Andrew Stringer, who lasted only two weeks in the role. A full-time replacement was elusive until Malcolm McCracken took over in February. The former KPMG manager is in his 20s and has advocated for housing and transport reform in Auckland. One of his first jobs in the role was responding to a story about mounting criticism of his chief executive by the upstart web magazine The Spinoff. He is now among the six board members who have resigned.

What does ‘The Spinoff’ have to do with this?

You can read our original story here.

But basically, the survey’s release crystallised a long-standing frustration with Beck shared by some politicians and city centre businesspeople; namely that it can seem like she doesn’t like the city centre all that much. Many of her media appearances over the last few years have been devoted to complaining about everything from homelessness to pedestrian-friendly projects.

When it was put to mayor Wayne Brown that some business owners and politicians seemed fed up with the negativity, he replied “everyone is”. Auckland Central MP Chlöe Swarbrick said Beck’s strategy was “hugely detrimental to the city”. North Shore councillor Richard Hills said he was confused that someone whose job is to promote the city centre “usually does the opposite”. Heart of the City board member Les Morgan was more diplomatic, saying “I think if the interested parties took a more positive view on the city centre, then that would help us all.” 

McCracken issued a statement saying that he would be open to having further conversations with political stakeholders, inviting them to share their thoughts with him on what the organisation is doing well and where it can improve.

It was a relatively anodyne response. But after the story came out, things started to spiral.

How so? 

The Spinoff understands Beck was unhappy with the Spinoff story and the response from Heart of the City. Business owners sympathetic to her, some of whom were part of a newly formed pro-carparking incorporated society on lower Queen Street, started advocating to the board on her behalf. Tensions escalated and on March 27, she was suspended from her role, with the board sending a letter citing her “poor communication”, “breakdown of trust and confidence between you and the committee”, “hostile behaviour towards committee members” and “withholding of information said to be important to the committee’s functions”. 

That added fuel to the fire. The Beck-aligned businesses organised under the leadership of St James Theatre owner Steve Bielby. According to reporting from The Post, they served the board with a petition calling for them to be removed and for replacement members to be elected.

The Herald reported that Beck had also been trying to influence her organisation’s governance in the lead-up to her suspension. It said that she had unsuccessfully lobbied several board members to elect a chair other than McCracken in February. Waitematā Local Board chair Alex Bonham confirmed Beck had also tried to influence her to install Communities and Residents (C&R) ticket member Greg Moyle as the council’s liaison overseeing Heart of the City.

Pressure on the Heart of the City board increased further in May, when the Employment Relations Authority ruled Beck had an “arguable case” that she was unjustifiably suspended. It ordered her reinstatement as chief executive, which The Spinoff understands commands a salary of almost $300,000.

How has the board responded to the blowback?

It remained mostly silent through all of this. But it appears board members were grappling in the background with not only Beck, but significant governance issues at the organisation. 

When they resigned this week, it was those issues, rather than the standoff with their chief executive, that they cited. Their statement said they couldn’t justify continuing in their roles given the amount of money they’d have to spend just to bring the organisation into compliance with its “legal, constitutional contractual obligations”. Chief among the issues was a non-compliant register of membership, which the board said “renders the society incapable of knowing how many members it has”. They called on the council to essentially step in and take over, freezing Heart of the City’s funding and carrying out an audit.

Is all this just a left vs right battle?

Some central city business owners clearly saw McCracken’s election as a sort of progressive takeover of the Heart of the City board. However, the outgoing board members come from a variety of backgrounds, and some don’t exactly fit that mold. Several hold high-ranking executive positions at prominent city centre businesses, including SkyCity chief operating officer Callum Mallett, Park Hyatt Auckland general manager Brett Sweetman and Aotea Gifts managing director Richard Hanson.

Where has the council been in all this?

Part of the reason the board was even looking at its governance was because mayor Wayne Brown wrote to them during the turmoil asking them to fix what he saw as systemic issues.

Brown remains concerned by the state of Heart of the City, not least because it receives nearly $6 million annually from the council. The Spinoff understands that, while it remains unlikely that Heart of the City’s funding will be frozen, an audit will almost certainly be carried out.

For now, Beck is back in her role, albeit in a hollowed out organisation with a board that consists of a single member. Future funding is uncertain and significant governance and administrative issues will need to be ironed out. She’s won a battle. The war is yet to be decided.