28 May 2015

SkyCity may pay millions more in new deal

7:13 am on 28 May 2015

An independent analysis suggests the casino operator SkyCity is paying almost $35 million more towards the national convention centre, in a revised deal with the Government.

An artist's impression of the scaled down design agreed for Auckland's SkyCity convention centre.

An artist's impression of the scaled-down design agreed for SkyCity's national convention centre in Auckland. Photo: SUPPLIED

Consultant KordaMentha said most of that was in almost $40 million of additional building costs, partially offset by a land swap between the centre site and a proposed hotel next door.

KordaMentha has been working through the deal unveiled this week, in which SkyCity will pay more than previously agreed to build a slightly smaller national convention centre sought by the Government.

The pair had initially agreed almost two years ago on a centre costing $402 million, in return for a 35-year extension of SkyCity's casino licence, and increased gambling.

However, a cost blowout in the design stage resulted in the Government refusing to foot additional costs but leaving SkyCity free to find cost savings, or contribute more.

SkyCity said it now expected to pay $430 million in land and building costs for the centre, in addition to building a neighbouring five-star hotel and laneway.

The headline figures suggest SkyCity is paying $27.4 million more but KordaMentha said it calculated the changes differently, including the land swap, leading to a higher figure.

An artist's impression of the convention centre.

The old design - changed due to a cost blowout. Photo: SKYCITY

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