The building cost $68.5 million and opened in 2011. According to the council-commissioned 2009 business case, it was supposed to host 316 events in its first year and generate a $1.1 million surplus. It sounded like a great investment.
But according to a $30,000 review initiated by Julie Hardaker when she was elected, those figures were not accurate. To quote a news article of the time, “Hamilton City Council staff told the original author of the business case, Campbell Consulting, to increase the already optimistic number of events in the business plan by up to 50 per cent.”
The review also found revenue projections were increased by up to 11 per cent and operating costs were reduced by up to 9 percent. “Council staff had been unable to explain the variation.”
Perhaps if councillors had been told the truth, the project may not have gone ahead. Is this the reason the numbers were adjusted?
Even that review was optimistic. It projected a $1.5 million deficit, with losses continuing until at least 2015. Later news reports have recorded a deficit of around $10 million per year, which Gary Mallett notes is over 7% of our total rates.
Garry Mallett wants to sell the centre for $1, a complete write-down of its now-over-$70 million capital cost as it has already required upgrades. This would be a great move to save us on-going costs, except no buyers are coming forward – not surprising given the terrible investment returns.
The decision to build Claudelands was flawed. With a massive expenditure program scheduled for the next ten years, what confidence do we have that the Council’s commitments are based on trustworthy information?
The level of faith the public has in council staff has nosedived as rates have gone up. If the council was a business, the damage to its brand value would be considered serious. But it is a monopoly protected by legislation. We have no choice and no protection, as there appears to be no accountability for their mistakes.
The Hamilton Residents and Ratepayers Association wants a council that we can all respect.