'Unfair' alert levels kiss of death for ASB Showgrounds

The ASB Showgrounds is an unintended victim of an inequitable covid lockdown structure that shuttered events venues but put few restrictions on retail centres, Kim Campbell says.

Campbell, the immediate past chair of the Auckland Agricultural Pastoral and Industrial Shows Board, which until yesterday were the custodians of the ASB Showgrounds, said its eventual demise had been sealed by only being able to operate at covid alert level 1, meaning it had effectively lost more than a year of revenue.

This was while it was embroiled in an expensive dispute over rent with its landlord, the Cornwall Park Trust board (CPTB), dating back to 2017.

The showgrounds are set across an eight hectare site next to Cornwall Park in Greenlane, and have 18,000 square metres of flexible exhibition space. 

Campbell, the former chief executive of the Employers and Manufacturers Association, said the rental dispute had been the result of "an outdated lease and multiple valuations" and had been scheduled to go into arbitration.

Up to that point, the venue had been paying about $757,000 in annual rental to the CPTB, which had worked out over time to about 9% of revenue. 

But, after several delays and the "massive impacts" of covid on the venue's income stream, the board had simply "run out of money" and took the tough decision to enter liquidation.

"Given the rules around the lockdowns, we'd have to say we were probably the most unfairly hit," he said.

Liquidators Rodger Reidy were called yesterday to secure the properties by the showgrounds' board.

Business Events Industry Aotearoa (BEIA) chief executive Lisa Hopkins described the showgrounds as a “major asset” for Auckland and said its closure could potentially have longer term implications for both Auckland and New Zealand.

Hopkins said BEIA had been fortunate enough to have hosted its latest Meetings 2021 exhibition earlier this month at the venue, which had attracted more than 500 trans-Tasman business event buyers and media.

This was the first major business event after the opening of the NZ-Australia travel bubble.

"ASB Showgrounds is also one of the few venues big enough and adaptable enough to cater for covid spacing requirements,” which she said made it important in the current climate.

Hopkins said BEIA was now willing to work closely with the trust to help keep the venue operating.

The closure had already resulted in the immediate cancellation of the popular Webb’s classic cars auction scheduled for this weekend, next month’s food show and possibly September’s homes show.

Prior to covid, the showgrounds hosted an average of 250 expos and events a year, with upwards of 1.5 million visitors through its doors. 

But, Campbell said, the venue was "essentially shuttered" last year in the wake of rolling lockdowns though rental and maintenance still had to be paid.

While the venue's 25 staff received a wage subsidy "that really wasn't remotely enough to cover costs".

Hands of the liquidator

CPTB board chair Adrienne Young-Cooper said while what happens next is in the hands of the liquidator, the board was prepared to support proposals that would allow the showgrounds to continue to operate on an appropriate commercial footing.

Young-Cooper said the past year-and-a-half of the pandemic had compounded what was already a challenging financial environment and the CPTB board had given the shows board “considerable time and financial leeway over the past couple of years" in the hope it could find a way to continue to operate.

She noted the terms of the trust deed under which the trust operates requires trustees to act solely in the best interests of Cornwall Park, with all rental income from the showgrounds and other land going to “preserving and enhancing the park for the people of Auckland”.

Richard Clarke, head of major and business events at Auckland Council owned Auckland Unlimited, said the economic agency was now working with impacted event operators and had also “reached out” to the CPTB with the objective of seeing events continue in the short term.

Clarke suggested Auckland Unlimited was also keen to be part of ongoing discussions into the “long-term management and viability of the venue”.

Venue scarcity

Ségolène de Fontenay, general manager of the NZ Events Association (NZEA), said in the absence of a successful solution, the closure of a venue of this size would have a major knock-on effect and put pressure on an already looming shortage of large venues in Auckland.

She said that “wasn’t helped” by delays to the NZ International Convention Centre to 2024 and whether the Viaduct Events Centre, currently the home of Emirates Team NZ, would be available.

She said the events sector continued to plan large-scale events such as tradeshows and consumer shows, as the lifeblood of helping small businesses showcase their latest products. 

A recent survey of NZEA members suggested there were 4,258 corporate or charitable events planned at the start of this year, of which about 254 had been cancelled and 146 postponed already due to rolling changes to alert levels. 

Huge cost

Those cancellations or deferrals alone had amounted to about $6m in losses, including events centred around the America’s Cup, Auckland Home Show and sports events like Round the Bays.

De Fontenay said business events contributed $1.45 billion to local economies during 2019, “yet appeals for financial assistance dating back at least a year have fallen on deaf ears”.

She said the industry was keen to keep working with the government, but tourism minister Stuart Nash had yet to respond to requests for assistance.

An ASB spokesperson said it wouldn’t be appropriate to comment on the closure.