Waikato Times: New Waikato Regional Theatre facing financial ‘challenges’

Originally published in the Waikato Times, Thursday 1 September 2023.

By Stephen Ward

A recent aerial shot of the regional theatre development on Victoria St in the CBD - construction’s still on track for opening next year but the project acknowledges ongoing financial challenges. Photo: CHRISTEL YARDLEY / WAIKATO TIMES.

The under construction $80 million Waikato Regional Theatre remains on track to open by “the end of next year” but regional councillors have heard it’s facing a range of financial and other challenges requiring tight management.

Theatre officials told Thursday’s council meeting the challenges include finishing the building on a fixed price contract without compromising build standards in a tough inflationary environment.

Also, $2 million in build costs has still to be found to take funds raised to the $80 million target.

Having the funds needed to hit the ground running when the theatre gets going is another and an unspecified amount of post-opening operational funding is also being sought.

The council itself is committing $5 million to construction. Ross Hargood, the chairperson of the Waikato Regional Property Trust which is building the theatre, told councillors another council contribution to maintenance costs may be sought “so we don’t end up with another Founders”.

Previously, the city council has said it will contribute $1.1 million annually for maintenance but the project is also keen to see the regional council chip in, as was earlier suggested.

Finding the required dollars - Ross Hargood, chairperson of the Waikato Regional Property Trust (left) and the theatre site with (from left) Tompkins Wake law firm partner Scott Ratuki, Momentum Waikato chief executive Kelvyn Eglinton and Tompkins Wake chief executive Jon Calder. The law firm is one of the contributors to the project. Photo: MARK TAYLOR / WAIKATO TIMES.

Hargood also noted there was a fixed price contract for the theatre with Foster Group unless changes were made to specifications and he said “we are contemplating a couple” without specifying what they were.

Asked about the potential affect on costs of current inflation, Hargood said they were working closely with Foster and sub-contractors to ensure good pricing was maintained while ensuring suitable materials were used.

“We will only move on a cost-saving activity as long as [we’re advised by professionals] that it won’t affect the quality of all those things in the building. If it does, we don’t accept the variation.”

Building without compromise - managing costs in a tough inflationary environment is a big focus for the theatre project. Photo: KELLY HODEL / WAIKATO TIMES.

Waikato Regional Theatre general manager Gus Sharp, a former Wellington city venues boss who shifted to Waikato in February, said of the challenges: “They’re all financial, shockingly.”

For example, he noted how the new venue wanted to provide for community use.

The scale of that would depend to a degree on how much operational funding could be raised or generated - if this was not enough the venue may have to take a more “aggressive stance” towards earning revenue rather than facilitating community use.

“But at the moment everything’s going to plan so we should be able to keep it nice and affordable.”

Construction was “by and large on track” with structural steel erected and basement concrete poured.

Waikato Regional Theatre general manager Gus Sharp

The project was now looking to firm up operations such as ticketing, technical services and a hospitality partner.

On securing sufficient operational funding, Sharp said “we’re working with a number of partners to put together a runway for the first three years that’ll allow us to launch strong”.

“What we know from opening previous venues - and I opened the St James in Wellington - is that starting strong just gives you a big push,” he said.

“It’s about getting momentum right out of the starting blocks.” The first six months was particularly important.

To help with that, the team would start approaching the touring show industry to publicise what Hamilton would have to offer and the cost of venue use.

Architecture firm Jasmax has created this view of what the new Waikato Regional Theatre will look like once it is completed and opened to the public next year. Image: JASMAX.

Branding was another key matter. “Waikato Regional Theatre is a great name but it doesn’t roll off the tongue. So what are we actually going to call ourselves, how are we going to be perceived by the community, all that sort of stuff. And that’s a big piece of work.”

No naming rights sponsor had yet been found despite significant effort and hitting up some big firms. “There’s just not much interest in the current environment”, Sharp said, although they were “chasing down every lead”.

“One of the things that we are seeing at the moment is that companies are tightening their belts ... what that has meant for us is that some of our donations have been stretched over a longer period which has an impact on our cashflow.”

Another concept drawing of the new venue from architecture firm Jasmax. Image: JASMAX.

Sharp indicated the council would be approached about handing over the last of its donation instalment earlier to help earn money from investing it. Other donors were also being talked to about this.

Getting funding for what he described as “cultural integration” of the building such as art works and Māori pou was another issue.