29. 1. 98

REPORT BY THE LEISURE AND COMMUNITY SERVICES MANAGER

 

1.

WINTER GAMES PROMOTION INCORPORATED PROPOSAL TO BID FOR THE 2006 WINTER OLYMPICS

RR 6909

 

Officer responsible	Authors
Leisure and Community Services Manager	Alistair Graham, Peter Walls
Corporate Plan Output:

The purpose of this report is to advise the Council in respect to a proposal from Winter Games Promotions Inc who seek Council support for a bid to host the 2006 Winter Olympics in Christchurch.

It should be noted that this proposal was received late on Friday afternoon. Within the time frame to meet Council agenda deadlines thorough research on several key areas has been impossible.

BACKGROUND

An initial study entitled "A Study On Hosting the 2002 Winter Olympic Games in New Zealand", was prepared by four students as part of their requirements for a Masters of Business Administration Degree from Massey University.

These students then made the decision to follow up the study with a strategy to have Christchurch bid to host the 2002 Winter Olympics.

Winter Games Promotions Inc (W G P) was formed and an initial launch presentation of their proposal was made in late September 1992 at the Antarctic Centre to which some Councillors and staff were invited.

The Council was formally approached in early November by W G P seeking permission to make a presentation to the Council. After some discussion provision was made for W P G to make a 45 minute presentation prior to the 8 December 1992 meeting of the Policy and Resources Committee.

A brief staff report was prepared for this meeting and the following recommendations were adopted:

1. That staff prepare a report for the February meeting of the Policy and Resources Committee based on the Winter Games Promotions Inc's study.
   
   
2. That this report explore the details relating to further studies required to assess the viability of this proposal.
   
   
3. That the allocation of any resources for further research should be held over pending the outcome of this staff report.

This initial submission back in December 1992 was to seek $40,000 from the Council to assist with an independent feasibility study on Christchurch hosting the Winter Olympics. The Council declined to support this study but indicated it would review the issue on receipt of an independent feasibility study. W P G indicated that they would proceed with the feasibility study through corporate funding.

To date this feasibility study to the best of our knowledge has still not been completed.

On Friday 23 January 1998 the document entitled "The Case for Hosting the 2006 Winter Olympic Games in New Zealand" prepared by Winter Games Promotion Inc, was delivered to the City Council. Staff were asked to prepare a report on the proposal to go to the Council meeting on Thursday 29 January 1998.

The initial report in 1992/93 took in excess of 2[Omega] months to prepare and therefore the time frame in presenting a comprehensive report to the Council for this current proposal has been insufficient.

What staff have attempted to do is to indicate the significant differences between the 2002 proposal and the 2006 proposal and to include any information not already included at the earlier consideration for hosting the Winter Olympics.

MAJOR DIFFERENCES FROM THE ORIGINAL REPORT

The current proposal before the Council is almost identical to that lodged in 1992 with the addition of updated information from recent Olympics, etc and some cost variations. However in general terms the report is identical and therefore the comments made in respect to the initial report are for the greater part, still relevant.

The earlier report is attached (Appendix B).

Outlined below are the major changes that were seen as being significant:

1. The revenue split from television rights was originally quoted as 60% for the Organising Committee and 40% for the International Olympic Committee. This is now at 49% for the Organising Committee and 51% for the International Olympic Committee.
   
   
2. A Games cost has gone up from $700M to $900M.
   
   Work is still required on other infrastructure and operational costs.
   
   
3. Ongoing use of the facilities following the Games to be significant to retain them They anticipate the as they would be the only international facilities in the Southern Hemisphere.
   
   In Calgary (population 2 x Christchurch) they cannot support ongoing costs of Olympic facilities.

4. Curling now has a New Zealand Association and would be an Olympic Sport.
   
   
5. Snow Boarding has been added as an event.
   
   
6. The Bobsleigh and Luge would now be hosted at Mt Hutt along with the down hill events.
   
   
7. The Nordic Ski, Ski-Jump and Biathlon would all be held in the Pisa Range and Cardrona.
   
   
8. Estimated media numbers have gone up from five to six thousand.
   
   
9. Cost of venues has gone from $137M to $238.8M.
   
   
10. They want the Government to provide the financial underwriting for the bid process and also a guarantee of up to $250M.
    
    
11. They have suggested that there are plans for further hotels being built in the city.
    
    Current tourist trends may well impact on this.
    
    
12. A major reduction in planning and administration costs from $563M to $360M.
    
    
13. There are still some questions over the exact number of Ice Arenas that would be required and the suitability of being able to adapt any existing facilities that are currently in the city.

As can be seen from these there are some changes from the original report but the majority of the report is very similar.

DISCUSSION

A significant amount of research is still needed in these areas before any commitment by the Council is undertaken. Following brief research from Council staff the following factors need to be considered prior to making a decision.

1. Planning Issues

Please note - report attached (Appendix A1). The key issue raised in this report is the need for an environmental impact assessment for each of the main sporting venues and also the requirement under the Resource Management Act 1991, ie The Protection of Outstanding Natural Features and Landscapes for Inappropriate Subdivision Use and Development. This would be in respect to the development of luges and ski jumps at Mt Hutt and at Cardrona. While these issues would obviously not be considered by this Council they are still significant and would require considerable research prior to undertaking the provisions of the Resource Management Act.

2. Transportation

This is an area of major concern as it was in the original report where transportation of large numbers of media, visitors, athletes, officials, etc over long distances to remote areas which do not have appropriate facilities to accommodate them requires consideration ie imagine the problems of getting even half of the media based at Lyttelton from there to the Mt Hutt Ski Field for an event and back in the one day.

Our original research and details provided by Christchurch Transport Limited would still seem to stand in that there is an estimated cost of $70.1M; this was four years ago, and the possible addition of a further $62M depending on what arrangements there were to on-sell the vehicles (Appendix B2).

3. Additional Costs in Terms of Infrastructure for the City

Both reports have referred to Calgary as an example of the hosting of Winter Olympics that would be closely equivalent to Christchurch. The following information which was provided in 1992 is still relevant.

The City of Calgary Provided:

1. Rent free accommodation for the Organising Committee which involved many Council facilities.
   
   
2. Staff were seconded in areas of finance, purchasing, transport, security and other general activities ie the Council's Planning Department went from 48 to 130 for nearly two years and then dropped to 37 where it remains. This also occurred in the Recreation/Sports Department where 8 of the 26 members of staff worked exclusively for the Games.
   
   
3. With this and the tie-up of facilities many complaints were received relating to the decline in Council services.
   
   
4. The city's transport system was upgraded with all Games ticketholders receiving free travel. 400 million trips were recorded.
   
   
5. The city organised and paid for the associated Cultural Festival.
   
   
6. Calgary Police screened and trained 1,400 civilian volunteers. 180 security guards and 1,150 police officers who made up the security task force.
   
   
7. Snow clearing, public health and many other services were provided at no cost.
   
   
8. Calgary also contributed $43M Canadian.

Province of Alberta

1. Capital expenditure of $115M Canadian plus the following on cost.
2. The provision of policing, not security.
3. Weather projections.
4. Substantial contribution to the cost and content of the Opening Ceremony.
5. Plus support with Public Health, Liquor Permits, Parking Facilities and Financial Services.

The Government of Canada

1. Portion of cost of Police.
2. Additional staff and training to handle Customs, Immigration, Air Traffic Control and Internal Revenue.
3. $200M Canadian was contributed towards the cost of the Games.

As with any major events the hosting of the Winter Olympics would require a significant contribution from the city, the regional authority and the Government.

These infrastructure costs have not been dealt with in any form in the proposal from Winter Games Promotion Inc. It should further be noted the contribution from State and Federal Government in Canada.

4. Accommodation

While the report points out correctly that the accommodation for IOC Members, Officials and other VIPs would not be a problem the issue of the Olympic Village, accommodation for the Media and appropriate accommodation for visitors has not been dealt with.

(i) Accommodation for the Athletes (ie Olympic Village)

The number of athletes is now estimated to be approximately 3,500 (an increase from 2,000) with three to four hundred support staff which would need to be accommodated at an Olympic Village.

The current accommodation available at Canterbury University is approximately 878 beds, at Lincoln University 674 beds and at the College of Education approximately 90 beds (1642 beds).

There are several issues - the first is that the IOC would have to allow dispensation for more than one Olympic Village in the city to utilise more than one of these venues. The second issue is that no one venue has anywhere near the required provision of accommodation so significant additional accommodation would need to be provided and this has not been addressed in any detail in the report.

The other requirement, if the Universities were to be used is for the changing of the Academic Year and indications are, as they were then, that the Universities responded negatively to this suggestion. However Canterbury University did point out that should it happen that the city was awarded the Winter Olympics, then obviously they would look at what they could do in view of the benefits to the region.

(ii) The Media

The proposal is still to have 6,000 (an increase from 5,000) media on cruise ships in Lyttelton Harbour. As was the case back in 1993 this is still a major issue not only in terms of accommodation, but also in terms of logistics of moving these people to the various venues and back.

It is estimated that in the vicinity of 10 to 12 cruise ships would be required and the Lyttelton Port Company advises that the inner harbour can only accommodate a maximum of two vessels and that mooring in the outer harbour is not permitted while the issue of trying to get cruise ships released from the northern hemisphere lucrative cruise season has yet to be tested.

(iii) Looking after Accommodation for Visitors

While the report suggests that 10,000 visitors could be home-hosted within Christchurch, what would happen to any additional visitors. All other accommodation would be gone and therefore the Games would unofficially have provided a limit on the number of visitors who could come to the city.

Other details in respect to accommodation as outlined in page five of the 1993 report are still appropriate. (Appendix B)

5. Venues

While ice sports may be increasing in popularity in Christchurch and the proposal for a second indoor ice rink at Wigram is under investigation, the long term utilisation of any additional ice rinks (up to four may be required) would seem unrealistic for a city of the size of Christchurch.

It is also questioned as to whether the ongoing financial support required to maintain ski-jumps and bobsleigh/luge facilities could be supported from income generated from events and local or national tourism.

6. Finance

In general terms the operational budget as outlined in their proposal would seem to adequately represent the costs associated with operating the Games. However there has been no work done on the costs associated with the infrastructure costs for the city, nor those associated with the other issues raised above.

The financial controller from the Auckland Commonwealth Games who prepared this indicative budget admitted that this was the case with significant detail being gained in respect to the operational budget but very little in terms of the infrastructure requirements.

(i) City Council Guarantee

In order to host an Olympic Games the International Olympic Committee have several requirements from the host city and the most significant are:

1. Any city applying for the organisation of the Olympic Games must undertake in writing to respect the conditions prescribed for candidate cities by the International Olympic Committee Executive Board, as well as the technical norms laid down by the International Federation of each sport included in the programme of the Olympic Games. The International Olympic Committee Executive Board shall determine the procedures to be followed by the candidate cities and,
   
   
2. Any candidate city shall offer such financial guarantees as considered satisfactory by the International Olympic City Executive Board. Such guarantees may be given by the city itself, local, regional, national, public collectiveness, the state or other third parties. At least six months before the start of the International Olympic Committee's session at which such Olympic Games will be awarded the IOC shall make known the nature, form and exact content of the guarantees required.

As can be seen from this, if the Council supports this application and goes forward as the host city, then Christchurch would be involved in guaranteeing the finances to run the Winter Olympics. The Council would therefore want to be very comfortable with all the other issues that are raised prior to making this commitment which in real terms is a financial guarantee.

OTHER ISSUES

1. If the 2006 Winter Olympics were not to go into Europe then this would be sixteen years since they had held them there.
   
   
2. The request in 1993 was for $40,000 which was half the price for an independent feasibility study. This has not, to the best of our knowledge, been completed and would have identified and clarified many of the issues that are raised.
   
   
3. No commitment or comment has been gained from the northern hemisphere winter sports organisations where 99% of Olympic competitors come from. The issue of out of season training and competition would need to be addressed. In addition is the limited experience New Zealand has at hosting major Winter Olympic events.
   
   
4. The cost of the Bid at $5.2M seems low. (Nagano spent over $US20M and Australia $NZ35M.)
   
   
5. There is a need for commitment from other local authorities. If Christchurch becomes host city it is indirectly guaranteeing infrastructural developments outside the city.
   
   
6. The question of support and acceptability to current ski field operators has still to be confirmed and clarified. It has been indicated to us for example that Mt Hutt is a commercial field and would expect compensation for loss of revenue during construction and the event. Other fields would be similar.

CONCLUSIONS

Apart from the change in venue for the ski jump and bobsleigh run, the proposal by Winter Games Promotion Inc is virtually identical to the one placed before the Council in 1993. There are still several outstanding issues that would need to be resolved before the proposal could be supported with any confidence by the Council.

While the proposal suggests that there is no financial commitment required by the Council, no detailed work has been carried out on infrastructure costs or the major issues raised above and the guarantees etc required by the International Olympic Committee. Infrastructure costs on roads, policing, planning etc could put a significant burden on the Council.

The issue of a full independent feasibility study has yet to be resolved. Finance for this study was requested back in 1993 and declined by the Council mainly because of the main issues as outlined above. In addition there seems to be the need to carry out environmental impact reports on each of the major venues as proposed prior to making any final decision on this proposal. It is our opinion that without further thorough and independent research it would be financially irresponsible for the Council to support the bid.

Leisure and Community Services Manager's Recommendation:

That given the complexity and magnitude of issues still unresolved, the Council cannot support the bid to host the 2006 Winter Olympic Games in Christchurch as presented in the report prepared by Winter Games Promotion Inc.

 

Alistair Graham
LEISURE AND COMMUNITY SERVICES MANAGER

28 January 1998

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