SkyCity attempts to retain convention centre’s 'design integrity' while defending its own

Last week Prime Minister John Key was fretting that a convention centre built by SkyCity [NZX: SKC] for the originally agreed $402 million would be an “eyesore” in downtown Auckland.

Since it was announced on Sunday that SkyCity would not request a taxpayer top-up for the increased cost to build a “flasher” centre – in the face of clear public antipathy at the prospect – Mr Key has apparently become comfortable with the idea of that “we all need to live within our means.”

That might well involve the government allowing the gambling operator to build a centre that’s up to 10% smaller than envisaged, although SkyCity chief executive Nigel Morrison has said that’s only if the company can’t “get the cost down into something that's getting close to reasonable” via design tweaks and taking control of the procurement process for the project.

In the first instance, SkyCity will try to retain the "design integrity" of the original plans but if that’s not possible, it will look at “a more significant redesign,” Mr Morrison says.

In response to concerns that a smaller convention centre wouldn’t be internationally competitive, Mr Morrison has insisted it will still attract overseas conferences.

After initially welcoming the announcement that SkyCity would pay for the convention centre’s construction without recourse to the public purse, opposition parties have lined up to criticise the government for giving the gambling operator leeway to build a smaller centre than agreed.

Labour leader Andrew Little has threatened to reduce the 28-year extension to SkyCity’s Auckland casino monopoly if the convention centre it builds is a “dog” as a result of cost-cutting and his party is in power.

Mr Little has also taken aim at Mr Morrison, suggesting he’d acted politically and that the SkyCity board should be asking questions about the chief executive’s conduct over the deal.

Mr Morrison has rejected such talk, insisting SkyCity has acted with “absolute integrity” and as much transparency as was possible while in negotiation with the government.

“I think to be absolutely honest with you I am absolutely totally comfortable with our integrity in this matter," he says.

SkyCity’s share price took a hit following Sunday’s announcement, falling 11c to $3.80 yesterday, although it has since rallied and is trading at $3.86 as of 10.45am.