Inside the liquidation of the ASB Showgrounds administration board

The ASB Showgrounds has a full book of events and there’s no practical reason it shouldn’t operate despite its administration board being in voluntary liquidation, says board chairman Kim Campbell.

“The buildings are there, everything is there and it has a full order book,” said Campbell, who with other volunteer directors yesterday decided to call in liquidators for the Auckland Agricultural Pastoral and Industrial Shows Board, a charity.

The 8 hectares on which the showgrounds and its buildings operate is owned by the Cornwall Park Trust, itself a charitable trust. The showgrounds board investment on the land includes buildings valued at $100 million.

Cornwall Park Trust chair Adrienne Young-Cooper said she hoped the liquidation did not signal the end of the showgrounds as an events centre.

The showgrounds board warned in the Herald in March that the future of the showgrounds was in peril, as it struggled to see how to remain solvent in the face of major event cancellations due to Covid-19 restriction measures and a proposed massive rent hike by the Cornwall Park Trust.

Campbell said since then the board had with advice from consultants prepared a recovery plan, “which required a lot of moving parts and the support of the Cornwall Park Trust”.

“They didn’t like it and chose not to participate so liquidation was the only option.”

In a written statement, Young-Cooper said: “We have given the shows’ board considerable time and financial leeway over the past couple of years, in the hope they could find a way to continue to operate.

“We are sorry that an accumulation of circumstances has led to this point and we have appreciated the work of the shows’ board to find a way through.”

Liquidator Paul Vlasic of Rodgers Reidy has been approached for comment.

The showgrounds’ only income is from shows, events and concerts.

In normal times the showgrounds host more than 250 exhibitions and events a year, attracting over 1.3 million visitors. The top 20 major shows generate more than $35m for the Auckland and New Zealand economies.

Earlier this year due to Covid lockdowns and alert responses the 150-year-old showgrounds lost four major events, including the Home Show and the Royal Easter Show.

Last year 14 major events were cancelled due to the pandemic response, plus 11 smaller shows and concerts.

On top of its income drying up, the showgrounds’ board, created under a 1972 Act of Parliament, was in arbitration with its landlord, the Cornwall Park Trust, which wanted to put up its annual rent from $750,000 to $2.3 million. The board has spent more than $750,000 in legal and other fees trying to resolve the rent issue.

Campbell said the park trust and the showgrounds board were this week still “millions apart”.

Cornwall Park Trust’s Young-Cooper told the Herald the trust three times offered the showgrounds board a rental between the $900,000 arrived at by the show board’s valuer, and the park trust valuer’s $2.3m. The showgrounds board rejected the offer.

She said the offer, made in 2019, 2020 and this year, was confidential. She also noted the two parties were still awaiting an arbitrator’s decision on the rent issue. This was expected “in weeks, rather than months”.

Campbell attributed the rent issue to the skyrocketing value of land in Auckland “setting up expectations” and “different valuers having different views of the rent.”

The park trust had deferred rent payments during the Covid crisis but it needed to be repaid, he said.

The amount of backdated money the showgrounds board would have been required to find was too much of a burden in the end.

Negotiations for the last rent review started in 2017 and ended up going to mediation.

“The backdated rent owing would have been in the millions and there was another review in two years. The accumulated cost of arbitration was very substantial, and the reserves were gone.

“It all had to be paid back. In no way was it responsible to continue. There are no shareholders so there is no capital base to go to.”

Campbell said the ASB Bank had been “heroic” in its support, lending the board money to build a complex on the site.

He acknowledged the responsibility of the park trust to get the most value it could from the very valuable showgrounds land.

Campbell said if the liquidator decided not to keep the showgrounds operating, organisers of booked events and exhibitions would have to find alternative sites.

“But there are no natural alternatives. It’s a good site for trucks which can drive around with heavy equipment, it has the lavatory facilities…and the buildings. The location is perfect.”

Campbell said some might question why the board invested in land it didn’t own.

“Both [organisations] were trusts, we weren’t dealing with shareholders. We always saw the showgrounds as a public amenity, like a library.”

He said the lease was “very unusual and very restricted”.

Young-Cooper said the showgrounds had been an important community facility for a very long time.

The trust managed Cornwall Park for the benefit of all New Zealanders, she said.

“The site is one of several parcels of land surrounding the park that were intended by park founder Sir John Logan to provide the [trust board] with sufficient revenue to maintain the park in perpetuity.”

The terms of the park’s trust deed required trustees to act solely in the best interests of Cornwall Park.

“Our over-riding obligation is to preserve and enhance Cornwall Park for the people of Auckland and New Zealand and that is where rental income from the showgrounds and other land surrounding the park goes.

“Anything that affects our revenue affects our ability to give all New Zealanders the opportunity to enjoy and experience nature in the heart of the country’s biggest city, free of charge.”

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