By Rob Pascoe (Chartered Accountant, Former Hamilton City Councillor, and Hamilton Ratepayer)

In 2016, the CEO of Hamilton City Council made a surprise decision to close the city’s long-serving Founders Theatre. Built in the 1960s with community funding and owned by the Council, Founders had been a cultural landmark for decades.

The decision sparked controversy—not just because it was made unilaterally, but because it came amid ongoing discussions about whether to invest in upgrading the aging theatre or redirect funds to other community projects. The theatre was outdated, and its “fly tower”—the system used to change sets—was in dire need of replacement, with a price tag of around $12 million.

However, the CEO cited urgent safety concerns as the reason for the closure. These included known earthquake risks and additional structural issues that had only recently come to light—some of which even councillors were unaware of at the time.

Founders Theatre after it was closed and prior to its demolition

Enter Momentum Trust

As the city debated what to do next, the Momentum Trust stepped in with a bold proposal: they would build and own a new theatre—provided they received a city grant and possibly some regional funding. The idea of a privately-owned but publicly accessible facility was appealing. It echoed previous successful models like those used for the Meteor and Clarence Street theatres, where external governance had helped ensure long-term success.

Momentum carried out a site study and ultimately recommended the former Hamilton Hotel site on Victoria Street. The location offered land and buildings at very favourable terms. The new theatre was initially estimated to cost $60 million.

Funding and Support

The city committed $25 million, with Waikato Regional Council contributing $5 million. Additional support came from Trust Waikato and central government via the Provincial Growth Fund. Hamilton City Council also agreed to provide $1.1 million per year (adjusted for inflation) for ongoing maintenance and operating costs once the theatre was up and running. In return, the facility would be designated a community asset.

Delays and Rising Costs

Despite the strong start, the project faced a series of hurdles: COVID-19 disruptions, inflation, supply chain delays, and even a legal challenge from local iwi regarding the cultural significance of part of the land. Throughout, the Trust maintained that funding was on track and the project remained viable.

But as we approach the theatre’s completion, ratepayers have already contributed more than originally expected:

Here’s a breakdown of the city’s financial contributions to date:

  1. $25 million – the original grant.
  2. $6–7 million – site work improvements around Embassy Park and Sapper Moore Jones Place to provide theatre access.
  3. Development contribution reductions – waived fees that would normally apply to such a project.
  4. $6.5 million loan – from the Municipal Endowment Fund in late 2024 to cover a budget shortfall. Supposedly at “commercial rates”, specific details are vague. The loan appears to be unsecured, interest free with unspecified repayment dates. It seems doubtful if the loan could be repaid in from the theatre’s operating budget. Maybe both Council and the Theatre Trust expect the loan will be written off.
  5. $70,000 – for the theatre’s opening ceremony and celebrations.
  6. $1.3 million – for movable seating at the front of the theatre. This was drawn from the annual operating grant even though it was originally intended to start only once the theatre opened.

Final Thoughts

The Momentum Trust’s offer to build a new theatre for the community was a generous and ambitious one. It promised a top-tier cultural venue without the city bearing the full financial burden. But as the costs rise and completion nears, the clarity and certainty around public contributions have faded.

More transparency is now essential—both from the Council and the Trust. Ratepayers deserve to know the full financial picture: what’s been spent, what remains, and what future obligations the city may face.

Links and Notes to support items 1-6 above

  1. $25million https://www.nzherald.co.nz/waikato-news/news/waikato-regional-theatre-25-million-confirmed-by-hamilton-city-council/DGI5CDCAI42422M5JC3GSV2HBU/
  2. $6-7million site work on council land surrounding the theatre. No specific funding approval but work has been undertaken over a number of years in preparation for the theatre opening. There is evidence in LTP and AP’s since the theatre grant was approved. Sappier Moore Jones Place needed significant work to allow heavy vehicles to transport equipment for future performances including a turning bay for a 45ton vehicle. Embassy Theatre needed major releveling to accommodate the entrance to the theatre and was closed for an indefinite period so this work could be done. The work relates to maintenance and improvements on council owned land. It would be difficult to find an accurate amount as other maintenance work around the sites would have been undertaken when this work was undertaken.
  3. Development contributions reduction – no evidence of actual amounts but a current councillor informed me that concessions/remissions in the amount otherwise due have been made over time. As I recall DC reductions/remissions were generally detailed and approved in public excluded meetings.
  4. $6.5Million MED loan – https://www.waikatotimes.co.nz/nz-news/360480279/city-puts-another-65m-skin-game-waikato-regional-theatre-complex
  5. $70k opening function https://www.waikatotimes.co.nz/nz-news/360698212/city-puts-70k-opening-party-best-theatre-country
  6. $1.3million – retractable seating https://hamilton.govt.nz/your-council/news/community-environment/retractable-seats-set-to-unlock-more-revenue-for-waikato-regional-theatre

 

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Further reading on this issue

OPINION: I Am Not a Number!

OPINION: Margaret Evans’ submission on the Hamilton City Long-Term Plan