SkyCity lifts minimum convention centre investment to $430m, says total cost could reach $470m
In the face of public opposition this year, the government said it wouldn't provide funding for the centre's cost overruns.
See also: New SkyCity convention centre plans get govt tick, await council approval
SkyCity Entertainment Group [NZX: SKC], the casino operator, has lifted the minimum it will invest in the Auckland International Convention Centre to $430 million and said total costs including land may be $450 million to $470 million.
The Auckland-based casino operator was forced to revise its original design after the government refused to contribute to costs that ballooned out to an estimated $530 million, exceeding the initial estimate of $402 million. The new design shrinks the floor space to 32,000 square meters and reduces total capacity to 2,850 visitors from 3,000, the company said in a statement. The new exhibition hall will still be able to seat banquets of between 1,360 and 3,000 people.
In the face of public opposition this year, the government said it wouldn't provide funding for the centre’s cost overruns. The government is already giving SkyCity gambling concessions and extending its monopoly on its Auckland casino license to 2048 in return for SkyCity bearing the cost of the convention centre development.
The government had previously indicated it would accept a slightly smaller convention centre, capping the reduction at 10 percent, if that was needed to meet the agreed construction costs.
The new design has been approved by the Cabinet and the SkyCity board, Minister for Economic Development Steven Joyce said.
SkyCity shares last traded at $4.39 and have gained 13 percent since the start of the year.
(BusinessDesk)
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RAW DATA:
- SkyCity media release [PDF here]
- SkyCity NZX statement [PDF here]
- SkyCity Q&A document [PDF here]
- Steven Joyce media release here
Suze Metherell
Tue, 26 May 2015
Tue, 26 May 2015
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SkyCity lifts minimum convention centre investment to $430m, says total cost could reach $470m
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