Auckland Unlimited, the council’s facilities company, is in talks to take over the management of the ASB’s large exhibition grounds and pick up upcoming shows.
The ASB Showgrounds liquidator cannot honor bookings for upcoming events because he fears he may be personally responsible for the seven-figure rent claims.
Liquidator Paul Vlasic singled out the owner of the Cornwall Park Trust Board in his first report.
He reveals that the Auckland Agricultural Pastoral and Industrial Shows Board, which over the past 50 years has hosted well-known events like the Royal Easter Show and the Homes Show, has gone to the wall owing to 90 creditors.
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But there is one that Vlasic is not listing: the Trust Board, which owes rent increases backdated to 2018, as well as deferred rents during last year’s Covid restrictions.
Organizers of events scheduled like October’s Tiny House Expo had been told their shows could take place – but that now seems uncertain. “The liquidator is not currently trading on the site,” Vlasic said in his report. “In order to do this, the liquidator may be required to accept personal responsibility for the current rent payments due under the lease.”
Vlasic said he was awaiting further information to determine the way forward. “We know there are many interested parties and greatly appreciate everyone’s patience as we undertake this work.”
One of New Zealand’s largest exhibition operators, Brent Spillane of XPO Exhibitions, said that he and Auckland Unlimited, owned by the council, had approached the liquidator and owner with a view to Auckland Unlimited taking over the management of the exhibition center as it sought to resume its activities.
“We are working with current event operators and have reached out to the Cornwall Park Trust Board of Directors with the goal of seeing events continue in the short term. ASB Showgrounds is an important strategic asset for major and commercial events in the Auckland region. “
– Richard Clarke, Auckland unlimited
This could still allow for upcoming events like XPO’s Food Show to take place on July 29, followed by the Baby Show starting August 20 and the Spring Gift and Homeware Show a week later.
It’s a big deal. The Shows Board’s 2019 accounts show it made $ 9.28 million in revenue that year, before Covid hit. The closures, however, have been disastrous for the Showgrounds, and general manager Mark Frankham said he lost $ 4 million last year with the cancellation of 14 major events.
Among the listed creditors is Showgrounds’ long-time naming rights sponsor ASB Bank, which owes $ 3 million. “Although support has been offered by a number of these parties, including considerable accommodation from the bankers of the Council, collectively this has not been sufficient to resolve the financial situation to which the Council had come. found confronted, “Vlasic reports.
Other creditors include Inland Revenue ($ 683,000), Ricoh Finance ($ 55,000) and Davis Trading Company and other creditors ($ 905,000). Some of the last 16 staff members owe $ 211,000 in severance pay – but as unsecured creditors, they will be the last to get their money back.
The $ 3 million owed to ASB is believed to be a bailout loan. “As is the usual process in these circumstances, we are working on options with the liquidator,” said an ASB spokesperson. “Our sponsorship agreement with ASB Showgrounds is separate and unrelated to the loan agreement.
“Of course, we cannot comment on a client’s financial arrangements with us.”
“We’ve documented billions of dollars in purchasing power by going through our shows, and we need a home for them. And what’s the emergency plan? Putting up marquees in Auckland’s parks?”
– Brent Spillane, XPO Exhibitions
Three years of protracted talks eclipsed any issues to agree to a rent increase on the 8ha property leased to the Cornwall Park Trust Board. The Shows Board paid $ 1.1 million in rent and associated expenses in 2019 – but an appraisal commissioned by the Trust Board would have put the new rent at $ 2.3 million per year.
The Showgrounds are located on land donated to the people of Auckland by the first civic leader Sir John Logan Campbell. The Trust Board is a non-profit charitable organization, which pays for the management and maintenance of Cornwall Park by collecting rent from leasehold properties on the outskirts, including the Showgrounds.
In an interview with Newsroom last week, Trust Board Chair Adrienne Young-Cooper insisted there was no rent dispute; that the two commissions were simply working according to the agreed arbitration process. This was heard on May 17 and the arbitrator has yet to rule on the amount of rent that can be charged. Whatever the increase, it would have been backdated, if the Conseil des Spectacles had not voluntarily gone into liquidation.
Show Board rents were piling up, with rents deferred during foreclosure creating a liability that the Board ultimately decided was insurmountable. “The outcome of the arbitrator’s decision has not yet been made public, but it is expected that a significant additional rental liability will crystallize once this is issued,” said Vlasic.
Despite Young-Cooper’s insistence that there was no litigation, this is precisely how it was described in the 2019 Shows Board Notes to the Accounts.
“The organization is in dispute with the landlord over the rent increase,” wrote accountants Hayes Knight.
The Shows Board’s cash flow projection predicted a cash surplus of $ 1.1 million in June 2021 – but that did not imply any further closings. It was calculated before the Valentine’s Day cluster forced the ASB Showgrounds to shut down for an additional 15 days.
The closures were a double whammy: not only did they force events to be canceled, but they also forced the adjournment of the adjudication of the rent dispute. “Significant uncertainty exists with regard to the going concern of the organization,” the report concludes.
Auckland Unlimited said last night it was in talks to find a short-term solution to allow the scheduled shows to unfold.
“We are working with current event operators and have reached out to the Cornwall Park Trust Board of Directors with the goal of seeing events continue in the short term,” said Richard Clarke, Head of Major Events and Business.
“ASB Showgrounds is an important strategic asset for major and commercial events in the Auckland region.
“Auckland Unlimited is interested in participating in the ongoing discussions on the management and long-term viability of the site.”
Brent Spillane was counting the days; He only has one month left until the Auckland Food Show opens at Showgrounds. “All dialogues point to a positive outcome,” he told Newsroom. “I know there is urgent work going on with the board to reopen the facility.”
He said there was a “misconception” that New Zealand’s new international convention center, next to SkyCity, would be large enough to host events like the Homes Show. “It’s just not true,” Spillane said.
“The events that we and some of our colleagues organize are way beyond the scale of anywhere except this place. It is too valuable an asset to be lost – just a selection of our shows brings up 78 000 national visitors to Auckland each year.
“For Auckland as a city, this is very material and very important. We’ve documented billions of dollars in purchasing power by going through our shows, and we need a home for them. And what’s the plan. emergency? Set up marquees in parks across Auckland? “
He had also spoken with a film crew who were to shoot at the site, and he said the Department of Health had booked to use the Showgrounds as a vaccination center. So there were a lot of influential players keen to reopen the site, and he said XPO would pay the rent for his exhibit up front if that helped.
“We were encouraged by what we heard from the Chairman of the Board of Cornwall Park Trust that they are eager to see the installation continue. We have made Sir John Logan Campbell’s wishes come true. organizing major trade shows and events for Aucklanders for 20 years. “