SkyCity pushes out deadline for completing international convention centre

SkyCity Entertainment Group [NZX: SKC] has extended by nine months the deadline for completing construction of the controversial NZ International Convention Centre from the original completion date of September 2017 to mid-2018.

In its latest annual report, the casino company said significant progress had been made on the design and planning of the $402 million convention centre in Auckland. A preliminary design should be lodged with the Auckland Council before the end of the year as part of the resource consent process. It's not yet known if the public will have the chance to make submissions on the plan. (See report attached)

The government and SkyCity agreed on the concept design in May, including shifting the site of a planned hotel development on a piece of land previously owned by state-owned braodcaster Television New Zealand. The decision to build the hotel on the former TVNZ site was made just months after SkyCity bought it on the premise it was needed to build the convention centre.

"It has taken longer than we had hoped to get to this point and we now expect that the construction contract (which will activate the regulatory concessions) will, subject to a smooth resource consent process, be signed towards the end of the 2015 financial year," said chairman Chris Moller and chief executive Nigel Morrison in their review in the annual report.

The construction is expected to take three years, once consents are given.

SkyCity is paying for the centre's construction after agreeing to concessions from the Government which include extending its Auckland casino licence to 2048 and adding 230 poker machines and 40 gaming tables. The cost of the building is estimated at $315 million, with an additional $87 million in land cost.

The concept design SkyCity unveiled in August includes a multi-use theatre to accommodate 3,000 people for conventions and entertainment events. With 85,000 square metres of floor area, the convention centre is thought to be the biggest building project in Auckland since the Sky Tower was built in 1997.The company has also said it will add a $180 million 300-room international hotel, a pedestrian laneway running from Hobson to Nelson Street, and a convention centre carpark for up to 1,350 vehicles, up from the original 780.

The deal is conditional on SkyCity obtaining resource consents for the convention centre and carparks and the changes to its existing premises needed for the additional gaming facilities, but that doesn't include consents for the hotel or linkbridge from the convention centre.

Sky City said it would provide an update on the convention centre and the Adelaide Casino transformation at its annual meeting this Friday.

In August it reported a 22 percent drop in net profit after tax of $98.5 million for the year ended June 30 with Adelaide revenue taking a hit from the construction work underway there. Brad Morgan, the general manager of the Darwin Casino, resigned this month and will step down from the role at the end of the year.

Sky City shares last traded at $3.53, down 13 percent on a year ago.

(BusinessDesk)