Hit by rent demands and Covid lockdowns, the repeated pleas for help from Auckland's biggest event centre fell on deaf ears.
Liquidators have moved in and secured the cash-strapped ASB Showgrounds, which has lost millions of dollars with the cancellation of major events.
Chief executive Mark Frankham told Newsroom he had been gradually laying off his 28 staff since the February Covid lockdowns; he called in the liquidator and gave his last seven staff the bad news on Tuesday.
They had struggled through a year of cancelled events, in which they lost $4 million – but this year's level 3 lockdown was the final straw. "The biggest thing was the closure in February because of those two ridiculous people who walked around with Covid," he said.
Nearby malls were able to keep trading as essential services, but ASB Showgrounds was not allowed to. "We were closed for 15 days – that was the killer. That broke our back."
Auction House Webb's had 44 classic cars, valued at an estimated $4 million, on site for its big collectors' car auction this weekend. On Tuesday night, all their staff were down at the events centre, after being told they had 24 hours to remove the cars.
Among the cars are a powerful 1998 Aston Martin Vantage V600, estimated to sell for between $500,000 and $600,000, an elegant 1949 Talbot Lago T26, and a 1976 Jaguar XJ12 C Convertible said to have been owned by Steven Spielberg.
Webb's said it had been forced, with much regret, to postpone Sunday's auction until July, due to the unforeseen liquidation. "We have 44 cars to get out of the venue, and to find a new place to store them while we decide what to do," said Webb's operations director Christine Kearney.
In the evening, liquidator Paul Vlasic, of Rodgers Reidy, told Newsroom he had been called in by the Auckland Agricultural Pastoral and Industrial Shows Board as liquidator. That is the non-profit statutory organisation that rents the 8 hectare site, whose land and buildings are valued at $48m, from Cornwall Park Trust Board.
Vlasic confirmed he had taken control of the showgrounds and the properties. He declined to say what the implications would be for third parties like Webb's that had assets on the site, but said he would be in a position to say more in the morning
The chair of the showgrounds board, Kim Campbell, told RNZ the development followed ongoing disagreements with the landlord, the Cornwall Park Trust. He said a dispute over rent had exacerbated the pressures caused by the Covid-19 pandemic.
The board runs 18,000 sq metres of exhibition space on the 8ha site set into Cornwall Park, abutting Alexandra Park Raceway.
As far back as September last year, Mark Frankham spoke publicly about how the lockdowns had stretched the events centre to breaking point. "We're on the last thread," he said then.
The Shows Board, the non-profit charity that rents the events centre and grounds, was forced to cancel 14 major events and 11 smaller shows and concerts last year. The run of ill fortune continued this year with the cancellation of the Royal Easter Show and the Home Show – but from the outside, there appeared to be hope that things were looking up.
The Sustainable Lifestyle Show went ahead in April, Webb's was to host its classic cars auction this weekend and the Auckland Food Show was scheduled for next month. And there were plans to reschedule the Homes Show for September. That's all off now.
The Shows Board, established under a 1972 Act of Parliament, had been in arbitration with the Cornwall Park Trust, which reportedly wanted to put up its annual rent from $750,000 to $2.3 million.
The showgrounds site is one of several parcels of land surrounding the Park that were intended by Park founder Sir John Logan Campbell to provide the Trust Board with sufficient revenue to maintain the Park in perpetuity.
"It's a real shock and it's a concern for the events industry." – Paul Blomfield, events promoter
The NZ Herald reported in March that the board had spent around $725,000 on legal and arbitration fees challenging the rent hike. Approaches to Auckland Mayor Phil Goff, and to Agriculture Minister Damien O'Connor for Covid impact relief through a $750,000 loan or grant, had been unsuccessful.
The Cornwall Park Trust Board has been mired in legal action all the way to the Supreme Court, over massive rent hikes it has imposed on the leasehold properties it owns on the fringes of the park. But none of the previous rent rises have been on the scale of that it has now imposed on ASB Showgrounds.
The trust board previously offered the showgrounds a rent deferral, but the money would have had to be paid eventually. The board previously insisted it had "responded positively" to the showgrounds' request for assistance over ground rent.
And Frankham said they had taken the five-yearly rent review in their stride; it was the lockdowns that proved their undoing. They had fixed costs of more than $200,000 a month that were just unsustainable, when all their revenue dried up. His pleas for help to the board's oversight agency, the Ministry of Primary Industries, minister O'Connor and the council had all been ignored. "I've had to give staff the bad news 28 times this year. By this week I only had seven or eight staff left. I told them yesterday.
"Apart from the wage subsidy, we never got one cent of support from government – not one dollar."
“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.” – Adrienne Young-Cooper, Cornwall Park Trust Board
Cornwall Park Trust Board chair Adrienne Young-Cooper said she hoped the decision to go into voluntary liquidation did not signal the end of the showgrounds as an events centre.
“The Showgrounds has been an important community facility for a very long time,” she said. “While what happens next is now in the hands of the liquidator, we would be prepared to support proposals that would allow the showgrounds to continue to operate on an appropriate commercial footing."
The Covid pandemic had severely affected the events industry, she said, and the Shows Board was one of many operators that had struggled to remain viable. “As the Shows Board has acknowledged, the past year-and-a-half of the Covid-19 pandemic has compounded what was already a challenging financial environment.
“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.”
Young-Cooper said the relationship between her organisation and the Shows Board and its predecessors went back a very long way. Sir John Logan Campbell was himself one of the early leaders of the Auckland A&P Association.
But the terms of the Trust Deed required the 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 our country’s biggest city, free of charge.”
Events publicist Paul Blomfield, who for 25 years has promoted the Homes Show, Big Boys' Toys and other big ticket items at the showgrounds, said its big and small spaces, indoor and outdoor, couldn't be matched by any other Auckland venue. Even the new national events centre wouldn't have capacity to host something as big as the Homes Show, he said.
"It's a real asset for Auckland," he said. "There's nothing else that comes close to being able to host events at this scale.
"It's a real shock and it's a concern for the events industry."
"The possibility of going to Covid Alert Level 2 has put doubt on expo events and actual alert level changes have cost the ASB Showgrounds millions of dollars due to cancelled events." – Epsom MP David Seymour
Local Epsom MP and ACT Leader David Seymour said ASB Showgrounds going into liquidation, after more than 160 years of shows, demonstrated the Government’s failure to respond nimbly to Covid-19.
“The events industry has worked hard asking Government to consider their unique circumstances. They petitioned Parliament in March but got no policy change," he said.
"The possibility of going to Covid Alert Level 2 has put doubt on expo events and actual alert level changes have cost the ASB Showgrounds millions of dollars due to cancelled events."
He added: "It is time for the Government to think harder about the risks it is imposing on different sectors rather than bluntly locking down and locking out, that is not a sustainable strategy."
