Mark Sweet, Citizen: Opposing the regional sports park, Part 1

How the Hastings District Council performs in its relationships with the business sector is a costly burden on ratepayers and can be justifiably described as ‘corporate welfare.’

In the Environment Court judgment on the Kidnappers case in December 2004 Judge Thompson said:

“To a degree the members of the Court have not previously experienced, the Council adopted an uncompromisingly partisan stance in support of the Applicant’s position.”

He was referring to way in which the Council abandoned any semblance of impartiality in wholeheartedly supporting Julian Robinson’s Lodge proposal. It’s easy to see why. One the world’s wealthiest men was making an enormous investment in Hawke’s Bay and they didn’t want to upset him.

As it turned out the Council did Julian Robinson a great disservice by not following reasonable protocols, and he showed he’s not easily upset by continuing to create a world glass golf course facility.

Judge Thompson’s phrase, ‘uncompromisingly partisan stance,’ identified a culture within the HDC which is driven not by process, but by predetermined outcomes. And the outcomes are set not by Council, but by businessmen.

The next time Hastings District Council appeared to take an ‘uncompromisingly partisan stance’ was in cosponsoring the charrette on Ocean Beach in November 2005 where it was obvious that Andy Lowe and Council were deeply imbedded. Three million dollars is a fair estimate of how much this relationship has cost the ratepayer so far, money that need not have been spent in supporting Andy’s development plans.

In my 2006 LTCCP submission I opened by saying:

“The concern I bring is that this Council appears to be engaging in corporate welfare – that is this Council appears to be supporting business sector interests at the expense of the public amenity and at the same time compromising its ability to appear as a fair and reasonable adjudicator when interests clash.”

I was referring to Ocean Beach and the proposed sale of Nelson Park.

HDC were spending up large in the lead up to the referendum on Nelson Park with a persuasion campaign containing elements which were disingenuous and often dishonest. Once again they were ‘adopting an uncompromisingly partisan stance.’ Clearly a faction within Council were determined to sell Nelson Park and would employ extreme means to influence public opinion.

If patterns were being repeated one of the threads was not as immediately obvious as Kidnappers and Ocean Beach. Who’s business interests were being served?

That became clear two weeks before the referendum closed when the HB Today headlined with: ‘Kelt gives $1m for sports park.’

It’s hard to talk about the proposed Regional Sports Park without mentioning the name Sam Kelt. And herein lies a problem.

Sam is Hawke’s Bay’s most prominent benefactor. His entrepreneurial skills have seen the Spring Racing Carnival become a prestigious international event, and the Horse of the Year has received accolades from top European judges. The Magpies are winning again. His determination has generated millions into our economy through the visitor dollar, and the Kelt Capital logo is everywhere.

The impression that Sam puts up all the money is not true however. Generally he organises the sponsorship and takes the naming rights.

Aspects of the sale of Nelson Park and planning of the RSP indicate a relationship between Sam Kelt and the Hastings District Council which is not transparent, but to question the integrity of that relationship boarders on heresy given Sam’s high profile.

It is, however, the right of all citizens of Hastings District to know how our rates are being spent, and how management of Council business is conducted.

How much Sam Kelt was involved in the sale of Nelson Park is unclear, but what is known is that he bought properties in Alexandra Crescent adjacent to the park.

Sam’s involvement in the Regional Sports Park is abundantly clear.

“Mr Kelt, a billionaire merchant banker, has asked the Hastings District Council to consider his company to manage the $35 million project proposed for Percival Road.

Kelt Capital’s role would include obtaining funding and sponsorship, and perhaps helping clubs who want to relocate to the regional site to sell their assets.

Kelt Capital’s plan for the park will be put to the council in about two weeks when a decision will be made whether to accept the proposal.

If it was accepted, Mr Kelt said, he wanted to begin promoting the park immediately, taking into consideration the outcome of the Nelson Park referendum.

“We can work out the commerce of this project and build a business into it … there will be business opportunities there,” Mr Kelt said.” (HB Today – 26.10.2006)

And this is how HDC Mayor Lawrence Yule responded:

“If Kelt Capital was not accepted, the council would have to look at other consultants to manage the project.

Here we have a business in our backyard, Kelt Capital, which has a proven record and it would be far better than having someone from Auckland to do the job.”

Clearly Mr Kelt and the Mayor have an arrangement.

Mr Yule confirmed Kelt Capital would be paid for its work on the project, pending the council’s approval.

“The project would take time and wrap the company’s resources and “if we do that on a zero basis, we’ll go broke,” Mr Kelt said.”

There’s no doubt Mr Kelt is driving the process and Mayor Yule’s partisanship is absolute.

The timing of this press release two weeks before the referendum closed is not incidental. Given the high profile of Kelt Capital ‘sponsorship’ and image of ‘success’ many voters might have been persuaded to follow the ‘sure bet.’

However, what many voters did not realise was that voting ‘yes’ would be taken as a mandate by Council, not only to sell the park and replace the athletic facilities, but also to build the RSP at our expense, creating a financial burden for decades to come.

The Hastings District Council does not have a mandate to build the RSP. With nearly $100 million debt, ever increasing rates burden, and an uncertain economic future, the people of Hastings have a right to question the common-sense of undertaking a capital project of $50 million, much of which we will have to pay for, and maintain.

[To be continued …]

Mark Sweet

Click here for Part 2

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4 Comments

  1. Dear Mark

    I was forwarded a commentary that you made on BayBuzz. I am grateful that you should take the time to write about my Company and consequently feel obliged to take the time to point out some of the inaccuracies in your commentary.

    1 In regard to your commentary about sponsorship and naming rights:

    1.1 I do not and have not arranged any sponsorship except for the Kelt Capital Hockey Academy which I have developed from scratch and financed for the benefit of children so that they can be in a world class environment of excellence to develop self confidence and self esteem.

    1.2 Kelt Capital is the single sponsor of the Kelt Capital Stakes. We have developed this race from a $50,000 event to a $2.0 million event over 17 years at a cost of slightly less than $3.0 million. No other party has ever contributed any sponsorship to the event in that period.

    1.3 We have not raised any sponsorship at all for either the Kelt Capital Horse of the Year Show or the Hawke’s Bay Rugby Union.

    We have merely been requested to become a sponsor at significant annual sponsorship cost, and agreed to do so, and at the same time have offered personal and professional assistance and the human resources of Kelt Capital to assist wherever we are able with those organisations’ business endeavours. This has been on a non charging basis for these organisations and the regions benefit in the same way we have supported Hawke’s Bay Racing.

    1.4 Kelt Capital has been Emma Twigg’s Principal sponsor for 3 years and again, I have not been involved in any other form of sponsorship raising for her.

    1.5 Refer 3.1 below in relation to RSP.

    Your assertion that I organise other sponsorship and take the naming rights is not correct.

    2 Neither Kelt Capital nor I have had any involvement whatsoever in the sale of Nelson Park or any other plan that the HDC may have had for Nelson Park, either before or after the referendum. We have had no involvement in Nelson Park matters at all.

    3 My and Kelt Capital’s involvement in the Regional Sports Park is as follows:

    3.1 I was asked by the HDC to contribute $1.0 million towards the Park. I have agreed to do this without any request or benefit for that contribution. I have not requested naming rights or any other form of benefit and consequently am and will not be receiving any.

    3.2 Kelt Capital was requested by the HDC to design and implement the funding structure for the Park on a fully commercial basis. We agreed to on a semi commercial basis as the fee componentry is on a completion basis only and at approximately 50% of standard commercial terms for raising capital. This commercial discount was offered as a further (to 3.1 above) contribution to the Park project.

    3.3 Kelt Capital was requested to be the Project Manager of the Park. We have agreed to do this on a fair commercial basis.

    Each of these requests was made in the order presented to you, quite separate from one another and in no way linked at either the point of request or acceptance.

    4 The statement in Hawke’s Bay Today referring to me as a billionaire is ridiculously false.

    5 The Mayor and I do not have any arrangement. Kelt Capital is under formal contract to the HDC.

    Mark, I hope this clarifies the situation for you.

    If you are unsure of anything I have said, have any queries or simply would like to chat about any of this, please feel free to ring. In the meantime, I would be very grateful if you were able to correct your commentary where it is inaccurate.

    Kindest regards.

    Take care.

    Sam Kelt

  2. Reply to Sam Kelt

    Rather than contact you personally, as invited, I prefer to reply in a public forum, because one of my major criticisms of the HDC is that too much business is done behind closed doors hidden from public scrutiny.

    1. Sponsorship is defined as 'providing funds for a project or activity carried out by another'. HDC's $50,000 donation toward the Spring Carnival, and NZ Racing's contribution surely must be regarded as sponsorship. Both the Horse of the Year and the Hawke's Bay Rugby Union have sponsors other than Kelt Capital, but I take your word that you have not been involved in approaching others.

    As I made clear Kelt Capital's contribution to Hawke's Bay sports is highly commendable.

    2. I said your involvement in the sale of Nelson Park was 'unclear' and must accept your statement that you were not involved 'whatsoever'. You did not however deny the acquisition of properties around the park and thus materially benefiting from its sale.

    3. In the HB Today (25/10/2006) you were quoted as saying, "Interestingly enough, I don't need the council's permission to make a donation." If you were invited to make the contribution this is a contradictory statement. To clarify I have requested from HDC the relevant correspondence of their 'request'.

    The same article stated, 'Mr Kelt, a billionaire merchant banker, has asked the Hastings District Council to consider his company to manage …' This reads as a request from you, not from Council. I have asked Lawrence Gullery to authenticate his article.

    4. Billionaire is indeed a lot of zeros.

    5. Are you denying that you and Lawrence discussed details of your involvement in the RSP prior to the aforementioned press release? If such discussion occurred, this would constitute an arrangement. If not, you have my full and unequivocal apology. I will however request from HDC any pertaining correspondence on this matter under the Official Information Act before conceding.

    I wish to make it very clear that my concern is not how you conduct your business affairs. The target of my inquiry is how the Hastings District Council performs in its relationships with the business sector. They are required to be accountable and transparent. You are not.

  3. Thank you BayBuzz for allowing Mark Sweet and Sam Kelt to put forward theirs views to the discerning public of Hawkes Bay.

    It is refreshing to read an article that is thoroughly researched and demonstrates the other side that we never hear.

    Hawkes Bay Today and the other media within Hawkes Bay have an appalling record of investigative reporting. Cats stuck up trees just doesn't cut the mustard when the main issues are glossed over and swept under the carpet.

    Looking forward to your next sequel Mark and Sam.

    VIVA BAYBUZZ!

  4. Very interesting reading – transparency is needed before ratepayers funds and future payments are committed. Thanks BayBuzz for starting that process. Given the recent events with Ocean Beach i have my fingers crossed that the RSP will get similar attention.

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