Stratford A&P Association Proposal

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Council is seeking your feedback on a proposal from the Stratford Agricultural and Pastoral Association (“A&P Association”). 

The A&P Association has asked for Council’s support towards a multi-use facility development temporarily known as the ‘Stratford Park Project’. The A&P Association needs assistance to purchase the land, and is seeking Council’s support.
 
There are different ways in which Council could respond to this project, from doing nothing through to purchasing the required land outright and gifting it to the A&P Association.
 
To go ahead, this project needs Council’s support. While the project has the potential to be a game-changer for the district and the wider region, it does come with some risks. Before making their final decision, Councillors want to hear what the community thinks.
 
Read about the risks, benefits and options available in this document or further below, and then let us know what you think by using one of the below details. More information is available from the Stratford A&P Association website and a community meeting will be held at the War Memorial Centre on Thursday 22 October 2020 at 7.00pm, where the A&P Association will present their vision for this proposal.
 
  • Complete the online feedback form
  • Email This email address is being protected from spambots. You need JavaScript enabled to view it. and include “Stratford Park Project” in the subject line.
  • Post to Chief Executive, Stratford District Council, PO Box 320, Stratford or drop off at 61-63 Miranda Street
 Feedback closes 5 November 2020.
 

What is the proposal?

The Stratford Agricultural and Pastoral Association (“A&P Association”) has asked for Council’s support towards a multi-use facility development temporarily known as the ‘Stratford Park Project’.  The A&P Association is looking to purchase land surrounding their current location on Flint Road to develop a site committed to agricultural, equine, and motorsport businesses and events.The Stratford Agricultural and Pastoral Association (“A&P Association”) has asked for Council’s support towards a multi-use facility development temporarily known as the ‘Stratford Park Project’.  The A&P Association is looking to purchase land surrounding their current location on Flint Road to develop a site committed to agricultural, equine, and motorsport businesses and events.

In 2016 the A&P Association reviewed its facilities, most of which were built in the 1920s and 1930s.  Through this process it became clear that it would be a multi-million dollar project to repair or replace the aged facilities.  As a result, the A&P Association decided to take a strategic approach and engage with their stakeholders to identify areas for improvement, opportunities, and to capture future aspirations.

The opportunity to purchase a surrounding piece of land has come up (shown in blue on the map below).  This is critical for the project to progress.  The A&P Association now needs assistance to purchase the land, and is seeking Council’s support.  There are different ways in which Council could respond to this project, from doing nothing through to purchasing the required land outright and gifting it to the A&P Association.  

The proposed option is for Council to access a loan at a significantly lower interest rate than what the A&P Association could achieve on its own and on-loan this to the A&P Association.  This loan would be serviced by the A&P Association and would not require any cash input from the Stratford District ratepayers. To minimise any financial risk, the loan of up to $7,180,000 would be secured against the land being purchased, and the land currently owned outright by the A&P Association.

AP Association Map

What are the benefits?
The Stratford Park Project aims to create a unique major events venue for local, regional and national events.  It looks to achieve enhanced economic, and community outcomes for not only the agricultural, equine, and motorsport communities, but also for the Stratford District and the Taranaki region.  It is expected that this development would put Stratford “on the map” and would contribute towards Stratford’s social, economic, cultural and environmental wellbeings.  The A&P Association believe up to 200 jobs will be created for the Stratford District. 

What are the risks?
There are risks associated with this project.  The level of risk varies depending on the option.  These are outlined in the options table over the page.

What do you think?
To go ahead, this project needs Council’s support. While the project has the potential to be a game-changer for the district and the wider region, it does come with some risks.  Before making their final decision, Councillors want to hear what the community thinks.

Want to know more?
A community meeting will be held at the War Memorial Centre on Thursday 22 October 2020 at 7.00pm.  The A&P Association will be presenting their vision for this proposal.

What are the options?

  Option  Risk Risk Mitigation Cost and Impact on Ratepayers
 Do nothing.  If no funding is secured, the project would not go ahead resulting in a lost opportunity for the district.  

 $0

There is no financial impact on ratepayers.

 Council supports the A&P Association with applications to philanthropic funders for the project.  If no funding is secured, the project would not go ahead resulting in a lost opportunity for the district.  

 $0

There is no financial impact on ratepayers.

 3   Council becomes a guarantor for a loan sourced directly by the A&P Association.   By sourcing a loan directly, the A&P Association would face a higher interest rate, making the venture less likely to succeed.  

 $0

There is no financial impact on ratepayers.

 
 As guarantor, Council would be liable for the loan if the project was unsuccessful.  This cost could be offset by leasing or selling the land.
4  

 Council borrows up to $7,180,000 and on-lends the funds to the A&P Association.  The loan would be secured against the land being purchased, and the land currently owned outright by the A&P Association.Council borrows up to $7,180,000 and on-lends the funds to the A&P Association.  The loan would be secured against the land being purchased, and the land currently owned outright by the A&P Association.

Council would recover its administration costs through adding a fee of 0.25% to the interest rate.

 
 If the venture is unsuccessful, the risk is that the A&P Association may be unable to meet the interest or loan repayments.  This potential cost could be offset by leasing or selling the land.

 $0

There is no direct financial impact on ratepayers.  While Council would take out the loan, the loan payments would be serviced by the A&P Association.

 
 This may impact Council’s ability to borrow for big projects in the future as it would bring Council close to its current borrowing limit.  Council can increase its current borrowing limit by obtaining an official credit rating. This would cost up to $50,000 per year, and would facilitate further borrowing.
 5  Council buys the land and leases it to the A&P Association.  If the venture is unsuccessful, or the A&P Association no longer wants to lease the land, the risk is that there is a lack of income to meet the loan repayments.  This potential cost could be offset by leasing or selling the land.  $7,180,000$7,180,000There is no direct financial impact on ratepayers.  While Council would purchase the land the loan payments would be offset by the lease.
  This may impact Council’s ability to borrow for big projects in the future as it would bring Council close to its current borrowing limit. Council can increase its current borrowing limit by obtaining an official credit rating. This would cost up to $50,000 per year, and would facilitate further borrowing.

 

Council's Preferred Option

Council's preferred option is Option 4.
This enables the project to go ahead supporting a development that is expected to benefit the whole district, not just the A&P Association.  There are no direct financial impacts on the ratepayer, however funding this project would significantly increase Council’s debt. This could potentially limit Council’s ability to fund big projects in the future unless the debt is repaid or Council obtained an official credit rating at the cost of $50,000 per year, which would facilitate further borrowing. In Option 4, the worst case scenario would be the failure of the project and Council having to lease or sell the land to service or repay the debt.  If this option is selected by Council, then a change to the Treasury Management Policy will be required, naming this specific loan as an exemption from the Community Loans section of the policy.

Have Your Say

Provide feedback on this proposal before 4.30pm on Thursday 5 November 2020 by:

  • Email This email address is being protected from spambots. You need JavaScript enabled to view it. and include “Stratford Park Project” in the subject line.
  • Post to Chief Executive, Stratford District Council, PO Box 320, Stratford or drop off at 61-63 Miranda Street
  • Complete the online feedback form