Final Convention Centre agreement signed

Economic Development Minister Steven Joyce has announced the Government and SkyCity last night completed negotiations and signed a 368-page final agreement to design, build and operate a $402 million international standard convention centre in Auckland.

The New Zealand International Convention Centre between Nelson and Hobson Streets will cater for 3500 international conference delegates at any one time. The estimated total cost of $402 million is made up of $315 million in construction and fit-out costs and $87 million in land costs. Construction is expected to begin in 2014 with the facility to be open in 2017.

“This final agreement to build the New Zealand International Convention Centre is great news. It will create jobs, boost tourism, and bring significant economic benefits to Auckland and New Zealand,” Mr Joyce says.

“SkyCity is a proven convention centre operator. This new facility will generate significant spin-off benefits including a projected $90 million annual injection into the economy; an estimated 1000 jobs during construction; and 800 jobs once it is up and running.”

It is estimated the new facility will attract around 33,000 more conference delegates each year. The Government will have the right to approve the design of the Convention Centre, which will be designed and built to contemporary international standards.

Legislation, that will give effect to the final agreement, will be introduced to Parliament next week. It will then proceed to a select committee through the normal parliamentary processes. The final agreement, released today, is conditional on the legislation being passed by Parliament, SkyCity securing resource consents, and final designs being agreed by the parties.

Under the final agreement, and consistent with the Heads of Agreement signed in May, SkyCity will meet the full project costs of the convention centre – estimated at $402 million – in return for the following:

·         An extension of SkyCity’s Auckland casino licence, due to expire in 2021, out to 30 June 2048, and an amendment to cover all of SkyCity’s properties in Federal Street

·         An additional 230 “pokie machines” on the casino floor

·         An additional 40 gaming tables

·         A further 12 gaming tables that can be substituted for automated table game player stations (but not “pokie” machines)

·         Up to 17 per cent of pokie machines and automatic table games (in restricted areas only) being able to accept banknotes of denominations greater than $20

·         Introducing TITO and card-based cashless gaming technology on all pokie machines and automatic table games at Auckland casino.

SkyCity will operate the convention centre for at least 35 years. SkyCity will have enhanced measures to deter problem gambling and money laundering including:

·         A predictive modelling tool that analyses data to identify players at risk of problem gambling

·         A voluntary pre-commitment system where players can elect to restrict the amount of time they play or the amount they spend

·         Doubling the number of Host Responsibility specialists to deliver 24-hour, seven-days-a-week coverage.

·         Introduction of player identification requirements when amounts over $500 are being put onto, or cashed from, TITO tickets in non-restricted areas.

An independent assessment by financial advisory firm KordaMentha has described the value of the concessions made to SkyCity in exchange for the construction and operation of the International Convention Centre as reasonable for both parties.

The 230 new ‘pokie’ machines is the same number granted to SkyCity under the previous Government in 2001 for the development of the existing, and much smaller, Auckland Convention Centre.

SkyCity has purchased from Television New Zealand a parcel of land needed to build the Convention Centre.

"The total area of land SkyCity now has is sufficient to build the Convention Centre", Mr Joyce says. “However both SkyCity and TVNZ will continue to discuss the possibility of SkyCity purchasing a further piece of land that would provide a larger footprint. We are keen for those discussions to continue as a successful purchase would allow a more iconic structure for New Zealand's International Convention Centre. The Government and SkyCity have allowed themselves a further two months to determine whether that is possible.

“The New Zealand tourism industry and business sector have been asking for an international-sized convention centre to be built in New Zealand for many years to tap into the growing market of high-value business visitors that we are currently missing out on.

“The Government and SkyCity have completed an agreement that will put New Zealand on the international map as a high-quality convention centre destination.”

Relevant documents relating to the deal, including ministerial briefings, cabinet papers, and harm minimisation information will be released early next week.

The final agreement is available at: http://www.med.govt.nz/sectors-industries/regions-cities/nz-international-convention-centre-project