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Gladwell's Line - The Italian Job

by Richard Gladwell, Sail-World NZ on 3 Oct 2017
The 36th America’s Cup Protocol contained a "use it or lose it" clause for New Zealand. Hamish Hooper/Emirates Team NZ
The America's Cup Protocol release on Friday morning marked a turning point in the America's Cup.

First was the timing - being made public three months after the conclusion of the previous Cup in Bermuda, rather than having to wait for ten months as with the previous rendition.

In contrast to the Protocols for the 32nd, 34th, and 35th America's Cup there were no real surprises aside from one or two against the Defender. (The 33rd Match didn't have a Protocol as such with its conditions being decided by the New York Supreme Court and the default conditions of the Deed of Gift.)

The second was that it is a fair Protocol - unlike the last which had 16 modifications in its first week of existence, and another 19 amendments four months later. The Protocol before that attracted just three Challengers, and the one before that spent three years being litigated in the New York Supreme Court.

The surprise was the fallback option of an Italian venue in the event of Auckland being unable to come up with the required infrastructure by August 2018 - or earlier.

Those who have stalked this issue for the past few years will be aware that talking the talk, is a lot easier for local politicians than walking the walk when it comes to America's Cup, the marine industry and facilities around the Auckland waterfront.

The Viaduct Harbour facility that was created from an inner harbour eyesore after Team New Zealand won the 1995 America's Cup has now vanished. Still there obviously, but instead of being available for Cup bases, it is now all hotels, apartments and swanky office space.

The marine businesses that gave the area some maritime character have exited. The team that was the catalyst for the creation of Auckland's waterfront jewel, still doesn't have a permanent base and now operates out of tents and an old oil company administration building.

Auckland has once again been handed one of the worlds premier sporting events without an event hosting fee (for which Bermuda paid $22million, plus a $35million sponsorship underwrite).

Plus there is the realistic opportunity to hold onto the regatta for a decade or more. The net worth and return on investment numbers have all been run before and are well accepted.

On top of the team expenditure in New Zealand, the New Zealand marine industry is now turning over more than $1.5billion per year - now the target of over $2billion by 2020 looks to be an undershoot. Then there are the other industries and activities, such as composite engineering and graphics, which have been spawned from the America's Cup impetus.

The Council has several zones under planning consideration for Auckland, the key ones of interest in the America's Cup context are the Wynyard Point/Quarter which forms the eastern side of Westhaven Marina, the Halsey Wharf extension, and Captain Cook Wharf (extension).

Wynyard Point is already set down as a further public park - given that it is currently covered with tankage and silos. It is also designated to be taken over in part by more apartments and new buildings as has happened with almost the entire Viaduct Harbour surround.

Clearing those structures by mid-2019 will require a Harry Houdini in the Council's planning, negotiation and project management divisions.

It may be possible with an America's Cup Empowering Act and a Minister for the America's Cup in place. But given the current political hiatus that option could be a long shot to get the required action within the Protocol timeline.

The obvious location for America's Cup bases is the Halsey Street extension which currently is just a dotted line on a Council plan.

The concept was only put on the plan in 2012 as a piece of 'futureproofing' to accommodate any fishing fleet that was left operating in the area and superyacht servicing.

A recent Council long-term planning meeting was told that the fishing fleet which had its historic roots in the downtown Auckland area continues to work on a smaller scale, but has also dispersed to other locations and the Manukau harbour.

A 2014 report to Council on the superyacht industry was said to have stated that the superyacht industry generated $30million per annum from the Viaduct location of which 35% was said to have come from lube and oil changes and refits only accounted for 20% of that total. 'That is peanuts for Auckland,' said the committee chairman. (The marine industry disagrees saying that whenever superyacht facilities are provided, they can keep them fully booked.)

Bottom line, in a view expressed by some Councillors, is that there is no ongoing legacy use, beyond an America's Cup, for a reclamation/wharf creation tipped to cost around $150million.

The attraction of the Halsey Street extension is that it has the Viaduct Events Centre at its southern end - which is perfect for Cup administration, media (and maybe television) centre and maybe as a trade show on its lower level. It is also close to the Viaduct area which provides some space for an America's Cup Village.

The end point of the planning discussion and the America's Cup is that there has to be a large flat space left in perpetuity for use in maritime events such as the America's Cup, and can be covered in temporary structures, rather than hocked off for yet more waterfront apartments, offices and hotels.

One of the lessons from the facilities in Bermuda was that very good, classy pre-fabricated structures can be erected and used for a variety of events, or dismantled and taken away inside a month and a new set of structures erected for the next event.

The lesson from the Viaduct Harbour rejuvenation and 2000-2003 America's Cups is that once the land is given away for other uses, it is gone. We are now in a situation where it can't be replaced without new reclamation or wharves.

The third location is the Captain Cook wharf area - which has a planned legacy use for a cruise ship terminal to cope with visits which are doubling every four years. That might provide an additional 12,000sq metres on the top of the existing 18,000sq metres to get to the 30,000 sq metres required for eight teams. But as the Mayor noted, there is an issue if Team New Zealand successfully defends the America's Cup in 2021 and the space is required out to 2025 or longer. Will cruise ships be barred from using the terminal for that period? The situation is further complicated by the fact that the peak period in Auckland for cruise ships is the same summer months in which an America's Cup is sailed - let alone the two years of buildup.

Auckland Council has shown itself to be particularly inept when it comes to dealing with its errant child, Ports of Auckland, whose designs for the Auckland waterfront seem to be only able to be controlled by public protest. The Port company is Auckland Council-owned, which in turn is ratepayer owned. The relationship was summed up by one senior Council staffer in a recent meeting, making the comment on getting a quick release of Captain Cook Wharf for use by America's Cup syndicates - 'based on past experience that would be a challenge'.

After Friday's bombshell, when confronted with the 'Use or it or Lose it' clause in the Protocol, the politicians were very keen to utter the right words saying that New Zealand will not waste an opportunity and bid farewell to the America's Cup as it heads to Italy. But the fact is that just three weeks earlier they canvassed the hosting options and had to at least mentally concede they had been blind-sided by the Team New Zealand win in Bermuda.

It is also a fact that they should have seen this one coming since 2007. A team doesn't get to the Final of three America's Cups, winning 18 out of 35 America's Cup races (2007, 2013 and 2017) or 10 out of 26 (2007, 2013) without being a fairly short odds bet to win the event in the near planning future.

Instead, the Council adopted the strategy of kicking for touch and hoped that would be enough.

Now that kick has been returned. And, last Friday, the Council fielded a high ball under the unexpected pressure of a Protocol deadline.

Their reaction in early September was to pass the options off for a further planning report. That will no doubt come up with the options - none of which will be easy, and all of which will be unpalatable based on their previous discussions.

The only real long-term option is the Halsey Street extension - which several Councillors tried to have prematurely removed as an option for further consideration. That went to a vote which was lost by 6-13, however along the way several others voted for Halsey Street to stay simply because they didn't want to tie the hands of the CEO in his report. Mayor Phil Goff spoke strongly about the need to have an evidence-based analysis (rather than opinion based) of the options before a decision was made.

The way this game will play out now is that the local and national politicians have to get their backline running at pace, from deep inside their own half, and score a touchdown with very limited time left on the clock.

The alternative is that in a few months time Italy snatches a well-signalled opportunity for an intercept pass and scores between the America's Cup goal posts.

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