By Geoff Kreegher (Hamilton Ratepayer)

Summary

The Claudelands Event Centre in Hamilton was funded by debt and the City Council has cumulatively incurred $25,370,806 in interest and losses of $97,998,358 to 30 June 2024 (36% and 140% respectively of the $70.19 million build cost). Council could give it away – save the annual losses then only have the interest to fund.

The Claudelands development has been plagued by a series of persistent challenges and systemic failures, spanning from its project conception and financial management to community relations and accountability.

Persistent Challenges Summarised:

  • Escalating Costs and Budget Overruns
  • Overly Optimistic Financial Projections
  • Revenue Shortfalls and Operating Deficits
  • Community Concerns
  • Competition with Existing Venues

Systemic Failures:

  • Flawed Project Model Change (2007)
  • Disconnect in Financial Planning and Advice
  • Lack of Learning from Past Experiences
  • Inadequate Planning and Due Diligence
  • Incompetence and Arrogance of Officials
  • Absence of Blame and Accountability
  • Reduced Transparency in Financial Reporting.

A Tumultuous Journey from Historic Showgrounds to a Questionable Commercial Venture

Hamilton’s Claudelands site boasts a rich history, evolving from a rented racecourse in the late 19th century into a modern events complex.

However, the transformation into the Claudelands Events Centre, intended as a purely commercial venue, has been plagued by escalating costs, optimistic projections, and ongoing questions about its financial viability and accountability.

From Horse Racing to Community Hub

The story of Claudelands began in 1886 when the Claudelands Syndicate acquired over 80 acres, subsequently leasing it to the South Auckland Racing Club. The first race meeting was held in 1887, with £1800 processed through the tote.

The historic Grandstand, originally built at the Gwynnelands estate for the Cambridge Jockey Club, it was bought and dismantled by the South Auckland Racing Club then shifted by rail to Hamilton Since then The Grandstand has been relocated twice more within the site.

It was temporarily closed in 2022 for remedial works after borer damage was discovered.

It remains closed.

Over the decades, the site diversified its uses. The Waikato Agricultural and Pastoral Association purchased the site in 1903, and by the 1920s, it hosted a variety of activities including trotting, A&P annual shows, gymkhanas, polo, greyhound racing, and motor cycle events. The annual Winter Show moved to Claudelands in 1967, and the first Waikato Home Show, which has since grown to become New Zealand’s largest home and garden show, commenced there in 1984, attracting over 12,000 visitors.
https://claudelands.co.nz/spaces/about/our-history

The Ambition of a Modern Events Centre

In 1999, the Hamilton City Council purchased the Waikato Events Centre, located within Claudelands Park, for over $7.8 million plus GST, with the vision of creating an ideal inner-city venue for mid-sized conventions, shows, events, and exhibitions.

The feasibility study of the convention/events facility, Waikato Events Centre, at Claudelands Park was budgeted at $75,000 in 2004/05 (see page 136 of the 2004-2014 Community Plan). The major upgrade planned in 2004, initially conceived as a community-based recreational facility, including a potential indoor stadium or major events hall, with construction slated for 2006/07, an initial goal was set for an annual event day usage of 25 days  see page 130 the 2004-2014 Community Plan).

The upgrade and refurbishment of existing buildings and surrounds and the construction of an indoor stadium/major events hall) amended to reflect the likely construction timetable, which would see construction start in 2007/08 rather than 2006/07 (See page 11 of the 2006-2016 Long-Term Plan)

However, this vision underwent a significant shift in 2007. Following further research, the project ‘morphed’ from the “originally proposed community-based model” into an “events-based commercial model“, this had significant, though ultimately negative, impacts on its financial outcomes. Consequently the project’s inflation-adjusted build cost increased from $43.8 million to $61.1 million. Despite the cost increase, proponents projected a turnaround from a $1.4 million annual deficit to a $0.5 million surplus, with a predicted reduction in cost to the Council of $5.0 million after a decade of operation (See page 10 and 201-205 of the 2007/08 Annual Plan).

2008 Build Cost

A total of $57m (not including inflation) was allocated over three financial years with expected completion being at the end of 2009/10 Annual Plan (See page 40-41 of the 2008/2009 Annual Plan).

The Claudelands Strategic Business Plan

The Claudelands Strategic Business Plan – Business Model May 2009 states “20% of events produce 84% of revenue” page 5 – the plan is silent on the remaining 16%.
One risk identified was “A lack of accommodation to support conference activity. A new hotel is needed soon after Claudelands opening” (page 8), Claudelands was intended to be a catalyst for “Developing Hamilton’s accommodation market” (page 16).

“A Catalyst for Regeneration…

…The added economic benefit and new money generated from Claudelands will be significant and justifies separate analysis”.

Page 17 Business Model May 2009

 

“Critical Success Factor – A Commercial Venue…

…Operating Claudelands as a commercial business is critical to the success of Claudelands. Claudelands will need to be very commercial in its approach to attract conferences, concerts and major exhibitions, and also very commercial in its management and operations”. Page 20 Business Model May 2009

On that criteria alone it has proved to be an abject failure.

The projected events in year one was:

Community Friction and Competitive Clashes

The ambitious plans for the Claudelands Events Centre were not without critics. In 2009, residents voiced significant concerns about the potential impact of such a large venue on their neighbourhood, particularly regarding traffic, noise, and parking. Questions were also raised about the necessity of building an arena of that size when a “perfectly good venue” already existed at Mystery Creek.

Council Activity Groups were restructured in 2009 , H3 (Claudelands, Waikato Stadium and Seddon Park) were absorbed into Event and Cultural Venues, together with Hamilton City Theatres and Waikato Museum (See page 80 of the 2009-2019 Long-term Community Plan).

By 2010, the Claudelands Event Centre “upgrade” cost had further escalated to $68.4 million, with reports in 2011 indicating a struggle to remain within this budget.

Once built, the new Centre quickly sparked a conflict with the existing Mystery Creek Events Centre. In 2011, Mystery Creek publicly stated it was “struggling to compete” with the funding and incentives, sometimes up to $100,000, offered by the Hamilton City Council to attract events to Claudelands. Mystery Creek reported losing several events, including the Waikato/Bay of Plenty Magic netball matches, to the new facility. The Council defended its $450,000 partnership fund and a further $1 million available to event organisers, asserting these measures were necessary to attract events in a “highly competitive environment” and ensure council facilities were “well-used”.

 “The council expects the centre will host only about half of the 315 events expected in the original plan for the 12 months to next July.

Its figures for the three months to September show it has a shortfall of $740,138.

Council chief executive Barry Harris said it was his job to get Claudelands sorted.

He was also promoting a general manager with experience in the commercial events market.

But finance and monitoring committee chairman Dave Macpherson disagreed and said it was the council’s role as the board to also get involved. In light of the damning V8 audit, the council had to be seen to be reacting quickly.

Councillor Roger Hennebry said the problem could get worse if the council did step in.

He said feedback from groups showed Claudelands was too expensive to hire for small events because the price between the old and new centre had doubled in some cases.”

Nikki Preston, Council help for struggling events centre, NZ Herald, 3 November 2011

Sports Flooring Issues

In 2012, the Event Centre faced public criticism from sporting groups due to problems with the concrete floor in the Arena. At one stage the Breakers basketball team refused to play competitive matches on the court.

 “Hamilton sporting groups desperate for a new nine-court indoor recreation centre are ruling out the Claudelands Event Centre as unsuitable at the same time as the arena struggles to meet its event targets…
…The flawed concrete at Claudelands Arena, which creates black spots and causes basketballs to lose bounce.”

Sports groups shun Claudelands events centre, Waikato Herald, 15 February 2012

Council purchased a second-hand sprung floor, from the 2010 Singapore Youth Olympics for $150,000 it is laid down in slabs especially for sports matches.
However, both the Breakers basketball team and Magic netball team faced issues, about “black spots” in the floor, the ball lost its bounce when it hit certain spots around the edges of the pre-laid court. Defects with the uneven surface of the concrete floor, first raised by the Breakers basketball team were ground down.

Montana Catering

Montana Catering was based at Waikato Stadium from its opening (2002) and continues to be the resident caterer. In 2011, when they became the caterer for the refurbished Claudelands Events Centre, Montana moved their head office and a new catering operation to Claudelands.

“The introduction of professional rugby in 1996 led to a sea change with Montana entrusted with the original corporate hospitality at Hamilton’s Rugby Park, for the inaugural Chiefs UBix Super 12 season. The construction of what is now FMG Stadium Waikato in 2001, opening in 2002, was the catalyst for the new company’s birth.

Montana Catering 2001 Ltd, trading as Montana Catering, was based at Waikato Stadium from its opening and continues to be the resident caterer.  In 2011, with the successful tendering for the catering rights to the refurbished Claudelands Events Centre, our head office and a new catering operation was launched at this new venue.”
Our Story — Montana Food and Events

The Montana Catering website boasts that they were involved in the development of the “Claudelands venue from design and planning to implementation”.

There was widespread concern at the exorbitant length of the catering contract awarded to Montana Catering. In response to LGOIMA 486075, Hamilton City Council responded with “The exclusive catering agreement between Montana Catering and Hamilton City Council (for Claudelands Event Centre) has a term of 20 years (2007-2027).”

In 2011, the NZ Herald reported on Audit NZ describing the “unusual length of the 20‑year Montana Catering contract at the Claudelands Events Centre, which gave the council little scope to exit, and holes in the council’s processes for capturing all commitments, management and financial.”

Damning Reports and Financial Shortfalls

Despite initial assurances from Mayor Julie Hardaker in 2012 that ratepayers would not cover shortfalls due to “incorrect figures” and “overly optimistic” projections, (Where did she think the money was to be obtained) the financial challenges persisted. Many residents, however, were not convinced, calling for “incompetent” individuals to be held accountable amid “continuing financial debacles”.

A pivotal assessment came with the 2012 Howarth Report, a “Claudelands Business Plan Review” estimated to cost $70,000 to $330,000.
Surprisingly Council is unable to provide the final cost of the Howarth Report stated in reply to LGOIMA 488967: “After conducting a thorough search Council can confirm the requested financial information is no longer held by Council, due to a change in finance systems”
The independent review of the 2009 Claudelands Strategic Business Plan and Long Term Plan financial assumptions. Its findings were critical:

  • The revenue-potential was “significantly overstated” due to “overly optimistic activity and pricing assumptions”.
  • Key identified risks, a difficult economic environment and a persistent lack of hotel accommodation, contributed to the disparity between projected and actual revenues. The projections were overstated even if these risks had been mitigated.
  • A “disconnect” between projected revenues and assumed operating costs, partly due to a Council-imposed limitation on Campbell Consulting’s scope of work. Campbell Consulting had explicitly warned about the need for increased costs to achieve the projected revenues.
  • The cost figures adopted in the Long Term Plan were lower than those provided to Campbell Consulting, while revenue figures were actually higher than those in the Strategic Business Plan. Ultimately, the report concluded that the Long Term Plan’s revenue projections were “unrealistically high” and its cost assumptions “unrealistically low”.
  • The number of events projected in Claudelands models were deemed “unrealistic” compared to other venues, with Council staff noted as having “great influence on the event projections”. For example, a projection of 21 concerts annually with an average of 3,000 attendees was described as “very bullish” given New Zealand’s event market, Hamilton’s population, and the proximity to Auckland’s Vector Arena. Even a comparable venue like Trusts Stadium in Henderson, with a 5,000-person capacity, typically achieves only 4-6 concerts per year, far from 21.

Accountability and Transparency in Question

There is a perceived lack of accountability for these issues. Critically the project has proved an ‘abject failure’ on its commercial criteria and that ‘there is no blame or accountability, no one was responsible’. While trustees and company directors are required to act in the best interests of beneficiaries and shareholders, councillors and staff appear to operate without similar accountability to ratepayers.

Furthermore, the Hamilton City Council seemingly failed to heed warnings from past projects. A late submission regarding the 2006-16 Long Term Plan referenced a 2002 Australian Capital Territories audit report, which found the V8 race event in Canberra incurred significantly greater costs than expected, leading to its withdrawal.

Despite Hamilton City Council commissioning Audit NZ to review its own V8 Hamilton 400 event to learn lessons, the Council failed to apply these lessons to the Claudelands Events Centre.

It is not that councillors and council staff were unaware of the dire financial situation at Claudelands. Finance Chairman Garry Mallet pushed to sell the venue, twice and is reported as stating: “Claudelands Event Centre is a drain on Hamilton City Council finances and should be flogged off for whatever the city can get”. Council staff say there’s no-one to buy it.
This begs the question how do they know that, without testing the market?

Interestingly Hamilton City Council’s reply to LOGIMA 19029 (6 March 2019) states: “There are no publicly available reports regarding the sale of Claudelands Arena.”

According to a “banned” finance committee chair report by then Councillor Garry Mallett, over the period of 2012-2018 the additional rates revenue collected by rates increase(s) was $47,271,000, during the same period H3 delivered losses of $116,876,062, more than double the additional rates revenue.

Concerns about transparency have also emerged regarding the financial reporting of H3, the entity that includes the Claudelands Events Centre (along with FMG Stadium Waikato, Seddon Park, and Founders Theatre residual activity). While H3 previously reported quarterly financial information to the Finance Committee, the last available report was in August 2019, a financial summary for H3, covering 1 July 2018 to 30 June 2019, reported a deficit of $16.141 million, an increase from the $14.537 million deficit in the previous year (See Finance-Committee-Open-Agenda-1-August-2019.pdf pages 99-105).

Subsequent reports provide only attendance numbers and activity outlines, with “no financials whatsoever”. These reports, now under the name “Venues, Tourism and Major Events” and combined with other city services, appear to no longer provide financial information to the Finance Committee. This raises a critical question: ‘How is Council and ratepayers to gauge the performance of H3 (and other facilities)?’

Hamilton media company Globox Digital Billboards acquired the naming rights for the indoor arena at Claudelands Events Centre in September 2021, for at least five years with an option to extend for another five years in 2026.
Globox was acquired by Auckland firm Lumo in 2025.

Claudelands Council Employees & Remuneration (Cost to Ratepayer)

Previously H3 staffing was reported by each entity.
(See Staff as at 2020 Staff at 2020)

However Council fail to separate H3 by entity, recent reporting also includes teams responsible for cross-venue operations, activity relating to new business acquisition and specialist services including turf and technical services and finance and marketing.

Consequently Claudelands staff and remuneration detail is impossible to obtain.
(See LGOIMA 403692 – Staff and Wages.pdf)

Claudelands Events Centre’s total capital cost reached $70.19 million—$1.8 million above the original $68.4 million budget. Missing elements (e.g., HVAC, glass balustrades) and remedial concrete work contributed to overruns.
https://fyi.org.nz/request/28065-claudelands-grandstand-cost#incoming-107002

The total capital (build) cost $70.19 million every dollar was borrowed.

“Councillor Roger Hennebry complained that the total Claudelands cost was a misnomer, given it did not take account of property purchased adjacent to the complex or things such as the $43,000 capital expenditure on exhibition hall drapes.

“What are the figures on cost related to the wider park or arena?” he asked.

But councillor Peter Bos disagreed with Mr Hennebry’s approach, saying the development of Claudelands could be tracked back to relocation of the Marist rugby club.

Councillor Ewan Wilson, who also opposed the resolution, said council money had been exceeded “by a substantial amount” when expenditure out of other budgets was taken into account.

Bruce Holloway, Hunt on for event centre savings, Stuff, 25 March 2011

Conclusions

In fourteen years since opening (2011) to 30 June 2024 Claudelands losses amount to $97,998,358.00, almost $28 million more than the $70.19 million build cost.

For the year ending in 2024, H3 staff remuneration was forecast at a staggering $6,450, 000 (37%) of the losses for the three (H3) venues that cumulatively had a deficit of $17,219,389.00

In the Long-Term-Plan 2024-34- (See page 76), Hamilton City Council states:
“We want to continue to deliver events that support our local business, stimulate our economy, and promote our city”

But at what the cost to ratepayers?

Council plans to spend a further $100 million on H3 capital projects (building renewals, security and health and safety programmes and operational renewals) before 2035 (See page 80, Long-Term-Plan 2024-34). There is no detail of which H3 venues will receive the bulk of this capital spending in the Long-Term Plan.

Claudelands is the leader of the pack for H3 losses; it will never break even under the current structure. Claudelands’ loss last financial year (2023/24) of $7,603,766 consumed 3.19% of the City’s total rates income of $238,229,000.

Ratepayers have two choices:

  • Accept the continuing rates rises to support the losses of Claudelands or
  • Pressure Council (councillors) to dispose of or lease Claudelands to private enterprise.

 

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Further reading on this issue:

OPINION: Investing in Infrastructure to Support Hamilton’s Growth

OPINION: Analysis of Hamilton City Council’s financial position

OPINION: What to keep and what to cut in Hamilton’s Long-Term Plan?

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