Address to Henderson-Massey Local Board 4th August 2011
Madam Chair, Ladies & Gentlemen
In 2002 Waitakere ratepayers spent $3.85m purchasing the ENZA coolstores.
In 2003 Waitakere ratepayers spent $880,000 soundproofing the coolstores for a film studio.
That’s the money we know about.
In May 2005 Waitakere Properties Limited and Enterprise Waitakere proposed the formation of a joint venture company with the private sector, to be formed with $1m input from Central Government, the land and buildings comprising the Henderson Valley Studios (valued at $6m) and an injection of $9m cash from the private sector. It was also proposed that a $100,000 management company be set up. Ownership to a maximum of 49.99% by WPL avoided the need for public accountability.
As it eventuated a $13.5m capital film company was set up in July 2006, with projected returns of 6-14% per annum. A management company was set up with capital reduced from $100,000 to $1,000. Three years later the management company was insolvent, but not before being advanced a $50,000 loan from WPL.
The Film Company paid a 2.5% dividend in 2009 and a 3% dividend in 2010, but between 2008 and 2010 its asset valuation dropped dramatically. Valued at $14.9m in 2008 it is now probably worth half of that. The 2009 accounts showed a loss of 2 and a quarter million and the 2010 accounts a loss of over ½ a million.
On 29 June 2010, Tony Tay and Associates was yet another in a list of Tony Tay companies to go bust. I was assured this had no impact on ratepayers whatsoever but a check of the first receiver’s report listed Waitakere City Council as an unsecured creditor. I expressed my concern to various Waitakere City Councillors about Tony Tay Film Ltd but it seems that most of them were prepared to accept the assurances given by Bob Harvey.
On 1 February 2011, Tony Tay Film Limited went into receivership.
My Official Information request on 9 February 2011 has still not been met.
Last week the majority of Auckland Councillors voted to purchase Tony Tay Film Ltd’s share of Auckland Film Studios Ltd for $1.5m. That is a decision which will come back to haunt ratepayers.
Although I have applied for a copy of the 2011 AFSL accounts Graham Wakefield, secretary AFSL, has told me the directors will probably refuse my request on the grounds of commercial sensitivity. I hope our Councillors inspected those accounts before voting. I’m told they were in the hands of the auditors for seven weeks.
We were promised with the new Super City we would get accountability and transparency. I hope it starts soon or the Super City will become the Superseded City. Ratepayers have now put $7.5m into a business which will be worth more for its land development potential than it is as a going concern. I’m impatient to see those 2011 accounts. Bob’s dreams have morphed into Len’s visions which will eventually end up as the ratepayers’ nightmares!
See today’s Western Leader
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I suggest you read my blog entitled “Venture Capital” and digest the actual figures. Regarding the Tony Tay Film share, your claim that the price appears to be less than half that which should have been paid is based on what figures? I have been refused a copy of the 2011 AFSL accounts, have you seen them? Ratepayers would have been better served by repaying escalating debt. The forecast dividends were way off the mark. The value of the studios has halved in the last three years. That is not a sign of a healthy business.