The new Forsyth Barr stadium in Dunedin is facing a $2 million rates bill, which it cannot pay.
The stadium is to begin paying rates in July, but the company which runs it - Dunedin Venues Management Ltd - has put aside only $200,000 for the bill.
However, the management company is a council-controlled organisation and in essence the rates money would be paid by the council, to the council.
Dunedin City Council is looking to reduce the rates bill to $134,000.
Finance and resources manager Athol Stevens says there are precedents for reducing the rates the stadium has to pay.
He says places like Wellington's Westpac Stadium and dams in the Mackenzie and Central Otago districts have also had their rates reduced by councils.
Stadium not viable, say critics
Meanwhile, Councillor Lee Vandervis says he is not at all surprised by the shortfall as Dunedin simply could not afford the stadium.
Dunedin Ratepayers and Householders Association echoes his view, saying it believes the community was misled over the financial viability of the Forsyth Barr Stadium.
Secretary-treasurer for the association, Neville Poole, says he blames the committee responsible for setting up the stadium project.
He says he thinks the committee misled the council over how much the stadium would cost to build and run.
Mr Poole says there's a danger the stadium will become a millstone around Dunedin's neck.