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Govt, SkyCity extend deadline for $402m convention centre deal

The government and SkyCity Entertainment Group are giving themselves another fortnight to cut a deal on the terms for the casino and hotel operator to build a $402 million convention centre in Auckland in exchange for regulatory concessions.

Both parties agreed to extend the deadline to reach a final agreement until the end of the month, after initially setting a June 14 deadline in last month's heads of agreement, Economic Development Minister Steven Joyce says in a statement.

Once reached, the deal will then be ratified by legislation and will go through parliamentary and select committee processes.

"The heads of agreement remains unchanged in all other respects," Mr Joyce says. "As I said at the time, concluding a final agreement in a month was always going to be ambitious."

The government wants the casino operator to take on the construction, fit-out and land costs of a new international convention centre in the country's biggest city and is willing to offer a 27-year extension to SkyCity's Auckland casino licence and an extra 230 slot machines and 40 gaming tables in exchange.

SkyCity would gain concessions with a net present value of $316 million, according to a base case scenario assessed by Korda Mentha. The value range was put at $261 million to $329 million.

SkyCity chief executive Nigel Morrison says good progress has been made, but "this is a relatively complex transaction and we need more time to finalise the agreement".

Construction is scheduled to start in 2014 with the centre completed in 2017.

The deal and its negotiations raised ire from problem gaming groups and opposition MPs, who called in the auditor-general to look at the process.

While the final decision of the government to negotiate with SkyCity passed muster with the auditor-general's investigation, the process was deemed to be sloppy, with the casino operator treated differently from rival bidders.

Shares in SkyCity fell 1.4 percent to $4.23 yesterday, and have gained 12 percent this year. The stock is rated an average 'buy' based on eight analyst recommendations compiled by Reuters, with a median target price of $4.60.

(BusinessDesk)

Comments and questions
11

Methinks Mr Joyce just wants to have Ms Metiria Turei gnashing her teeth over the weekend. This will really get her going. Now an inquiry will be needed into why the deadline is extended.

Great. She could do with the exercise.

You are such a misogynist. Commenting on a woman's weight shows just how out of touch you are from what is acceptable behaviour. If you had criticised her politics I wouldn't have commented. I bet you are an overweight balding, white old man.

And if I said it about a man's weight, would that make me a misandrist, and would your sad PC self comment on that too? Somehow I doubt it.

So who then is the greater misogynist? The one who patronises and possibly even misleads women by refusing to state obvious truths, or the one who is honest and states them?

Of course, you folk on the left are well known to have a bit of difficulty facing reality, haven't you?

Let's get real here. SkyCity have owned the property and they were likely to build a extension to their casino prior to changes to gambling
legalisation entered the scene.

What about some transparency. Perhaps one should ask Mr Joyce or Key whether they would accept a board role if offered when they decide to leave parliament. If the answer is yes, this decision to progress based on legalisation changes smells badly.

Surely the Economic Development Ministry and minister should be aware of the downsides to larger gambling halls. That is more state funding for those left on the scrap heap, after being chewed and spat out by the casion vultures.

I think full economic analysis is required, and not just on the short-term effects.

Yes, and written by one of your lefty mates, I suppose.

I voted Key in the time before the last.

The reason I didn't vote for him this time is I was against the sales of monopoly state assets. It's flawed short-term thinking selling a guilt-edge cashflow, when the costs of borrowing is less.

If this makes me a lefty, then you must be an extreme radical.

What an inconvenience for the big business crony network. Like the whole deal, there will not be fair tendering for the construction.

That's intriguing. Care to explain why SkyCity won't be after the best price?

Increasing the number of tables and poker machines is hardly keeping up with the increases in the Auckland population, especially the increases mayor Len Brown is proposing. Perhaps we need another casino as well.

A very good deal for Auckland and New Zealand.
John Key is to be congratulated.
liberte