3 Jul 2013

Council lost $3.5m on Carisbrook deals

4:01 pm on 3 July 2013

Dunedin's council says it regrets losing almost $3.5 million on its purchase and recent sale of Carisbrook.

Construction company Calder Stewart has purchased the main part of the former sportsground for $3.3 million.

In 2009, the city council paid $7 million to take over the ground, its carpark and some nearby houses as part of deal to help the cash-strapped Otago Rugby Football Union.

On Wednesday, the council revealed the details of all the deals, showing that it recouped a total of $4.7 million. Its loss is $3.46 million once debt interest, maintenance costs are included.

The council also released documents showing that Carisbrook was originally valued at $9 million in 2008, but steadily fell in value due to the subsequent global financial crisis. The ground has been superseded by the new Otago Stadium on the waterfront.

Dunedin mayor Dave Cull admitted on Wednesday that many poor decisions were made, but no one party was to blame.

"It's one thing to say and regret - and I do regret - the fact that we've lost money. It's another to say there was another option - there wasn't. This was the best outcome financially that we could achieve in this market."

Mr Cull said the council had to sell at a loss to stop the ongoing costs mounting up.

In February this year, the council announced the stadium's conditional sale before finalising a deal with Calder Stewart on 27 June, following due diligence.

Calder Stewart will receive a refund of $200,000 refund if all the buildings, apart from the hospitality complex, are demolished within six months.

Carisbrook was purchased by Calder Stewart for $3.3 million.

Carisbrook was purchased by Calder Stewart for $3.3 million. Photo: RNZ