Part 5 Evaluating the proposals received 5.40 5.41 5.42 5.43 HAG- rcvq/sz M. - one proposer (SkyCity) had been given a time extension after its meeting with the Minister; and - the decision to progress SkyCity's proposal could not be based solely on its EOI response. Another Ministry of?cial also expressed concern about the potential risk of changing the process. The lead Ministry of?cial responded by noting that: - the Minister had been briefed on the process and had agreed that the panel of experts would not meet at the time that had been planned; - no proposer had been granted a time extension, and various degrees of additional information had been sought from all proposers; and the deliberation by the panel of experts had been delayed ratherthan canceHed. The shape of a possible deal emerges (August to December 2010) SkyCity told us that of?cials told it, on 26 August 2010, that no government funding was available for a convention centre, to take account ofthis in preparing the revised proposal for a bigger convention centre, and to scale the proposal back if necessary. SkyCity told us that, until that time, its preference was still for a funding model, with the Government contributing some ofthe money required. As noted earlier (see paragraph 4.60), SkyCity told us that it considered the earlier comments from Ministers about the Govern ment?s inability to contribute funds to be partly ?positioning? statements. On 6 September 2010, SkyCity wrote to the Ministry with a revised concept plan fora larger convention centre to be located at 101 Hobson Street and an "aide memoire? about casino regulatory reform. There were two main messages in the letter. First, that SkyCity would be prepared to consider developing a convention centre at its cost, subject to being freed from some of the regulatory restraints imposed by the Gambling Act 2003. The aide memoire outlined the specific legislative amendments sought. Secondly, because the plans were for a revised design that was larger than earlier proposed, this required buying some additional adjoining land owned byTelevision New Zealand (TVNZ). SkyCity wanted the Govern ment to contribute: - the additional land required; and an annual payment for marketing and promoting the convention centre and associated business events. Part 5 Evaluating the proposals received 5 .44 5.45 5.46 5-47 5.48 The correspondence included updated concept plans for a convention centre on an expanded site. In acknowledging SkyCity's 6 September 2010 letter, the Ministry noted the revised plans, the aide memoire, and the statements about the contribution sought from Government. The Ministry said that its task was now "to present that information to Ministers (along with an assessment of other National Convention Centre proposals) Of?cials explained to us that, by this stage, the revised SkyCity proposal was shaping up to be the one most likely to be recommended to Ministers. This was because of its combination of location, SkyCity?s convention centre management expertise, and the fact that no immediate capital funding for building the centre was required from the Government. SkyCity?s revised design for a larger convention centre better met the Government?s needs than SkyCity?s initial design. However, before making a recommendation to Ministers to that effect, of?cials wanted to be sure that there would be no "show-stopping? barriers to the proposed convention centre being built on the Hobson Street site, and that the design met the international standards for a convention and exhibition centre that could take conferences of 3500 (and more) people. Therefore, of?cials began a range of detailed work to explore a full range of potential practical issues, including: - a "walk?through" of planning and consent aspects for the centre and site (carried out by Auckland Council in April 2011); - being clear (with the Of?ce of Treaty Settlements) about any Treaty of Waitangi claims on the TVNZ land needed for an expanded centre; valuation ofthe TVNZ land; testing other regulatory issues that might arise (with external legal advice); - estimating the likely build cost of the revised design for the centre (with expert advice); and using a panel of New Zealand and overseas experts to assess SkyCity's revised design for suitability of hosting large conventions of 3500 (and more) people (in May 2011). Considering the regulatory concessions sought by SkyCity In late September 2010, the Ministry provided a written brie?ng to the Minister for Economic Development about SkyCity?s proposal, including the "quid pro quo" being sought. The "quid pro quo" covered the gambling regulation concessions Part 5 Evaluating the proposals received 5.49 5.50 5.51 5.52 5.53 that SkyCity wanted and other matters, such as the right to use the international convention centre brand, the need for the Government to provide three adjoining sites owned by TVNZ to allow for a larger convention centre, and the contribution sought for promotion and marketing. The brie?ng had a more detailed section covering the regulatory concessions sought by SkyCity. This section included an assessment of whether the concessions would be controversial, and a comment on what would need to be done to make the change. The content was based on analysis by the Department of Internal Affairs.The brie?ng did not make recommendations. On 10 December 2010, the Ministry responded to SkyCity's 6 September "aide memoire? by identifying those aspects ofthe "quid pro quo?that the Government was prepared to consider. SkyCity and Ministry of?cials met again on 14 December to discuss this further. The Ministry stated that this meeting ?cleared the way for a proper negotiation" but noted that a deal was still a long way offand not inevitable. On 22 December 2010, SkyCity wrote to the Ministry with a redrafted "aide memoire". The letter: noted those items that SkyCity had sought and on which the Government was prepared to negotiate; - provided additional supporting comments on the items that SkyCity still wanted and thought the Government should negotiate; and stated those items that SkyCity was now prepared to ta ke ?off the ta ble" in terms of gambling reforms. Also, the letter noted that the cost to develop the convention centre was "signi?ca ntly greater"than ?rst envisaged. The Ministry updated Auckland Council?s Chief Executive about developments with the convention centre project on 22 December 2010. Auckland Council?s Chief Executive noted that Auckland Council's Mayor had discussed the need for an international convention centre with the Minister for Economic Development, and was keen for the project to proceed in 2011. Further contact with the other proposers (August December 2010) On 23 August 2010, the Ministry emailed those who had submitted proposals, excluding SkyCity, indicating that the Ministry would be delighted to hear about any new information that might be material to the selection decision. This was to seek any new information since o?icials had met with individual proposers during the ?rst week ofJuly 2010.