I should probably share a recent post I made on another facebook page that supports a new Ice Rink in Greater Wellington... ------------------------------------------------- Hi Everyone OK I said that I would take some time out this weekend to articulate my thoughts around a high level strategy for realising the vision of an Ice Rink in the Greater Wellington Region. I guess I should open by explaining my interest in this project. I skated and played hockey as a teenager in the UK. I was a fervent supporter of the ‘Peterborough Pirates’ Ice Hockey team. My family were involved in competitive figure skating and Ice Hockey coaching and we ‘lived and breathed Ice’ through the 80’s and in to the 90s. Hence, my passion for this project, and also a little bit of knowledge of the subject matter. For the record, my aims are purely altruistic. I am not doing this for money. We need an Ice Rink in the lower North Island. Someone needs to step up, so why not me and you? I must state quite clearly that I do not purport to be an expert in property development, much less the development of sporting and recreational infrastructure, nor do I have a detailed understanding of the many complexities and variables of major facilities maintenance. Nor can I claim to be wealthy or otherwise high profile figure with a network of rich, high profile, movers, shakers and influencers. I am just an average bloke with a goal and a passion to build an Ice Rink in Greater Wellington. All that said, I am energetic, enthusiastic and proactive and can also be quite tenacious at times. I know that with your help, we can do this. Absolutely, positively! Of course, our new Ice Rink will offer something for everyone regardless of age, but it must also be said that from a social perspective, now, more than ever, we need to offer our young people fresh and exciting alternatives to help them become engaged in positive activities that will occupy their minds and bodies in the right way. As the saying goes, ‘You cannot miss what you have never had’. Wellington needs an Ice Rink. It’s addictive fun. It’s a great way to socialise and keep fit, and our young people will just love it from both a sporting, recreational and social perspective...most of them just don’t know it yet! When I came to Wellington in 2000 I was surprised to find out that we did NOT have an Ice Rink. There have been several occasions when the subject matter has benefited from a little media exposure, but still nothing. However, moving forward 14 years, I am no longer surprised. In fact I think it is perfectly understandable why Wellington is still waiting for an Ice Rink. The following represents my summarised and simplified thoughts and ideas as to why we don’t have an Ice Rink in Wellington, and, more importantly, how we can change that. I am convinced that we can build a profitable, self-sustaining Ice Rink in Greater Wellington with no requirement for money from ratepayers, and I firmly believe that this Ice Rink will thrive and grow as a Regional Sporting & Recreational Centre, Tourist Attraction, and host to national and international sporting events. The reasons why we do NOT have a rink are relatively straightforward. And I think that the solution to overcome them is relatively straightforward too. I am of the opinion that the cause of the problem is a combination of the following: 1. Most people intuitively assume that the Ice Rink should be in Wellington. However, the infrastructure is stretched, available space is a premium, and there are several issues, challenges and constraints which are unique to Wellington City which make the prospect of an Ice Rink even more difficult to achieve. However (and this is a very important point), unlike many other recreational pursuits, Ice Skating is a REGIONAL attraction, not LOCAL. Worldwide research (and my own experience) shows us without doubt that the vast majority of people will happily travel for up to 45 minutes to go skating, and a relatively large percentage would travel for an hour or longer. Therefore, we should NOT constrain our thinking with the notion that the Ice Rink should sit next to the Westpac Stadium (or whatever). It is a regional asset and will garner HUGE regional support even if it is located in one of Greater Wellingtons satellite cities. 2. In broad terms, the specific characteristics of sports & recreational facilities (and in my experience, especially Ice Rinks) are such that it is difficult to generate the required level of return on investment (ROI) to attract private investors. Even in the case of Wellington, where I believe that various positive factors (including our regional socio-demographic profile and latent (though not visible) demand) will support a financially viable Ice Rink, there still remains a question around the risk profile and the difficulty in forecasting an accurate % ROI. Further, in the case of green field developments, with the added cost of land, the time required to recoup costs and generate a return are naturally prohibitive to investors. Note: Historically, many private investors have tried to overcome this problem by minimising capital outlay through leasing huge clear span warehouse/industrial units and retrospectively fitting them out as an Ice Rink. However, these approaches have sometimes failed for a variety of reasons, including the wrong location, poor consumer appeal, lack of parking and/or the required public transport networks, disproportionately high operating & maintenance costs etc., logistical and HSE constraints around patronage numbers etc. The list goes on and on. 3. In light of point 2 above, it is obvious that an alternative funding model must be employed. Unsurprisingly, there are a multitude of different funding models and options to choose from. Each of them offer various benefits and disadvantages when compared to each other, and each of them tackle the issues of governance, generating & managing capital outlay and operating costs differently. Naturally, every project must be considered on its own merits and with regard to its own unique context and conditions. Further, there is no point in me regurgitating the strengths and weakness of each of these various funding models for two reasons: a. Because this has already been outlined and explained very well by others, including a very good report written by Freeman Associates Limited on behalf of Sport New Zealand, entitled, ‘Territorial Authority Community Sport & Recreation Facility Management Choices in New Zealand: Research Report’. b. Because ALL of the models are – at this time, and in our context - wrong for Greater Wellington! So Why Are The Conventional Funding Models Wrong? Customarily each of these funding models requires that the project is kicked off by the TA, or in the case of some models, the approach of a potential private sector partner. However, TAs – just like more central government – are increasingly being asked to do more with less. There are always a large number of cabs waiting to get off the rank, but only so many of them will ever make it. Some initiatives are pre-empted as priorities change. The bottom line is that many worthwhile projects will never receive funding for a variety of reasons. Further, in the case of all of the recognised funding models, higher than expected costs and/or lower than expected returns from sporting & recreational assets presents a risk of the rate payer being asked to pick up the tab further downstream. In the case of an Ice Rink (rinks are not so well known or understood in New Zealand) who wants to be the brave soul that says ‘Yeah, let’s do it. And so, mostly everyone agrees it’s a quaint idea but nothing happens. To conclude, it would be extraordinarily difficult for any TA to present a robust business case for an Ice Rink with any real level of assurance that the public will not be required to contribute in perpetuity to the rinks on-going viability. Note: There are so many other variables to consider, but it would not be a good use of my time and energy to go into detail here. But by way of example, consider the logistical challenges (and other difficulties) that prevent more widespread financial collaboration amongst the TAs regarding regional projects. We could all be skating in 2 years or less if all of the councils could agree on an equitable shared funding model for a regional asset, with a large chunk of the required funding coming via way of conventional major fundraising channels through a charitable trust or similar. Just because an asset is based twenty miles from Wellington CBD it doesn’t mean that people living in that vicinity will not still benefit significantly from it. Sorry I digress. To summarise the funding model dilemma. There is a ‘catch 22’, ‘chicken & egg’ situation going on. No council will try to justify spending a lot of money on what is incorrectly perceived as a ‘niche’ asset, and no private investor would throw money into a project with such a high risk profile and questionable ROI data. My Proposed Solution Perhaps critics will accuse me of being naive and or stupid, but this will work :) 1. The Ice Rink will be run as a 100% independent, Not for Profit (NFP) organisation. No private investors focused on ROI. No TA intervention and /or funding by the ratepayer. This is a project that is organised by the people, for the people, leveraging the power of social media and the ever growing shift in consciousness towards altruism. Note: By ‘Not for Profit’, I do not mean that the Ice Rink does not want or need to make a profit. Far from it. It means that any such profits remain within the company for reinvestment etc. A grounded in reality example might be how much is charged for Ice time for skating lessons or hockey training etc. In some Ice Rinks around the world, the ‘cost of Ice time’ can be prohibitive. In a NFP model, the hourly charge out rate is not dictated by investors’ requirement for profit, and so theoretically a financially healthy NFP Ice rink could offer subsidies to make the ice time cheaper, thus encouraging training /coaching, leading to higher performing teams. 2. We (the public) take the lead in incorporating a Charitable Trust and then develop and implement a marketing / fundraising plan to undertake a detailed business case (there is no need for a feasibility study first, because it’s a complete no brainer!) 3. We approach the councils and present our business case and one of the Councils will gift us a piece of land (and maybe contribute some money too). This is a pivotal element of my proposed strategy. If you think this sounds too good to be true, please think again. I assure you without reservation that if we are relentless in our marketing and fundraising activities, there will occur a tipping point whereby we have gained enough traction and generated enough momentum (and money in our trust account) that one of the councils will ask us to build the rink in their city. Remember this will bring more jobs, more prosperity, more shoppers, more tourists and more everything to the city / suburb where the rink is located. 4. I estimate the cost of the project (excluding the land) will be in the vicinity of $11,000,000 (+/- 10%). 5. Approximately $6M will be raised via major fundraising channels and corporate sponsorship. 6. Approximately $5M will be raised via Tier 2 & 3 fundraising activities, including online crowd-funding. 7. If required, initial operating costs will be provided by way of no/low interest financing by one the major high street banks. Summary This is not a feasibility study, preliminary business case, or a draft business plan. This was simply me sitting down in front of my PC for a couple of hours last night and doing a bit of a brain dump. All I am attempting to do is share a vision, and a proposed high level approach for proactively achieving our goal of building an Ice Rink in Greater Wellington. I have also attempted to explain (in the most simplistic and summarised manner) why the conventional funding models have led to the current state of inertia. So please, feel free to provide your feedback (positive and negative is all good) but try and keep in mind, I have naturally omitted, shortened and/or simplified my thoughts and rationale in the interests of pragmatism. We should be raising funds to build an Ice Rink in Greater Wellington (but not necessarily in Wellington City) and the Ice Rink should be run on a NFP basis Next Steps I have one prominent individual involved in New Zealand Ice Hockey that has agreed to take a place on the board of a charitable trust. I now invite expressions of interest from Wellington business men and women that would be prepared (even if only on a temporary basis) to become trustees and help establish our governance model, business plan etc. When we have the right team assembled I will kick off the fundraising with a $2,000 donation to the Trust’s account. Then we fine tune a marketing/fundraising program, further develop the concept plans and budgets, and start to develop the detailed business case. From there, it is just a ‘people and numbers game’. If enough of us put in the effort to get the right message to the right people in the right way at the right time, we will get the moral and tangible support we need to make this happen. Please feel free to email me at [email protected] to chat about any aspect of this message.
Posted on: Thu, 13 Nov 2014 01:02:35 +0000
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