If you build it they will come.

It’s a dream come true! We’ve won the World Cup! Well not “won” it exactly. We’ve won the right to host one of the world’s biggest and most exciting sports-fests: the Rugby World Cup 2011.

Sadly, with hosting rights, comes responsibility. We need a 60,000 seat stadium, and we need it fast. 2011 may be a way off, but with the Resource Management Act, we’d be lucky to be out of the courts by then.

What are we to do? We’ve made solemn promises to the International Rugby Board. We could be shown up to be a second-rate country, something we’ve always secretly dreaded. Worse still, we could lose the games to bloody Australia! That would be more than I could bear.

Well the geniuses in Wellington have scratched their heads and come up with the following solutions:

1.Build a new stadium on a pier at Auckland’s waterfront (WS)






2.Revamp the old warhorse: Eden Park (EP)






Facts on the stadia are here. I won’t bore you with the detail. Suffice it to say that all estimates look extremely conservative.

According to the now embarrased Minister of Sports Trevor Mallard:

"The government has decided that a waterfront location is the option that can most meaningfully contribute to the Government’s vision for Auckland as a truly world-class, international city."

The Auckland Regional Council however stuck it to their bosses with a dissenting vote. Facing further embarrasment, Commissar Clark withdrew. We're now going with EP. Politics...

Well for what it's worth, I think we’ve missed a great opportunity. I believe that one of New Zealand’s largest stadia needs to be moved away from the suburbs. I have two reasons for this:


1. The suburbs are predominantly residential:

At the moment you have EP crouching in the middle of suburbia. Sporting facilities are generally considered incompatible with housing because of external effects.

They're big, noisey, and just plain ugly. Not just that, there's: rubbish, stuff damaged, light from night games, day-long shadows, and general drunken buffoonery. These are the indirect costs of hosting a sporting event nearby.

Experienced in isolation, we take these things in our stride, none-the-worse-for-wear. However, the problem is that residents experience these costs every game day.

If you attached a dollar value to these small sufferings, with time they could add up to huge amounts of money. Over decades the cost could easily be in the billions of dollars.

Sure, people in the CBD, and there are probably more of them, would experience similar external effects. Residents however have very different expectations. People living near EP would experience more harm.


2. The suburbs lack infrastructure:

EP really doesn’t have many shops, hospitality, or accommodation nearby. Kingsland is up the road, but is limited, and other areas too far removed, or catering to unrelated types of retail.

The CBD would be the perfect environment in this respect. Building a stadium on the Waterfront would maximise the potential benefits of the World Cup. Keeping the status quo would bottleneck spending and therefore economic benefits.

There are also problems with transport. The roading network was only ever designed to handle locals pottering about their business and not the swelling crowds and traffic jams that plague the area now.

The suburbs were never designed to support a major commercial operation.

Sure the costs and risks are much higher for the WS option. It’s a large and complicated construction project and the time to build it short. In fact I’d be surprised if the cost didn’t end up in the NZ$1-2 billion range when it’s all tallied.

Certainly, there is a long history of stadia budget blowouts, for instance:

1. The 1976 Olympic Stadium in Quebec Canada. After 30 years, Quebec residents made their final mortgage payments earlier this year on what is nicknamed the big "OWE." It has cost nearly US$2 billion and it loses millions of dollars a year.

2. The Vector Arena, another private-public initiative involving the Auckland City Council, was delayed six months.


Regardless, I believe that if you factor in external effects over time, the short run cost of moving the stadium will be smaller than the long run cost of the status quo. Moving the stadium from EP minimises a significant recurring cost.

Of course this doesn’t mean that the WS is the best option. It just means that there was a good case and excuse for moving a stadium from a residential area to a commercial one. “Where” needs to be determined by economic research, but I suspect that planning will continue to be half-arsed.

If you accept the above then it’s a short bow to draw that: it’ll never be cheaper than NOW to move the stadium. But alas, that’s all history. We’re committed to EP. But I have a bad feeling the lawsuits are brewing as we speak.