Wednesday 1 August 2012

More thoughts on the Christchurch plan

Eric has covered this off well, but here are a few additional thoughts:

1. There is a multiple equilibrium story under which it makes sense to spend money on civic projects that would otherwise not pass a cost-benefit test. The idea here is that there are two potential futures for Christchurch, one in which there is confidence in its future as a strong vibrant city, and the other in which it is much reduced in size and importance. Moving to the second equilibrium rather than the first would potentially imply as large a reduction in the value of the Christchurch's fixed capital as has already occurred from the earthquake, and so there might be some value in putting in a large injection of public capital as a way of signalling the liklihood of the better equilibrium. That story works for a national injection of public funds. I'm not sure it works as a policy if associated with the new bright shining white elephants is a legacy of high rates to pay for them.

2. The stadium: The economics of this are not quite as bad as a comparison with Dunedin would suggest. First, if it is accepted that there will be a stadium, the decision on whether to put on a roof has to compare the cost of the roof versus the additional ticket revenue that a roof would bring. A roof probably fails that test, and as Sam Richardson points out, you have to also look at the spillover cost on the competing CBS arena, but the economics are not as bad as comparing the full cost of a roofed stadium to none at all. In Dunedin, the full cost was marginal. In Christchurch, we are starting from a point of Lancaster Park having been replaced by insurance money. Again, this is predicated on the idea that there will be a stadium of some sort. My problem with the stadium idea is more with their choosing to start afresh rather than look to extend the current temporary facility which is still close to the city centre in a way that preserves, but doesn't commit to, the option of a roof.

3. The convention centre: Eric has written on this, but I can't resist adding my voice. This is why the stadium doesn't upset me so much. The stupidity pales into insignificance compared to the silliness of building a purpose built facility from scracth that is able to host up to three conferences simultaneously. (Aside: from my limited experience with organising conferences, if you have choice over location and date, you choose somewhere where you will be the only conference operating at the time.) The conference centre should be small close to hotels and the performing arts centre so that larger affairs could spill out to those areas.

4. The choice of sites: Great cities evolve as a series of second-best decisions on where to locate things based on where suitable sites are available. There is a limited role for governemnt intervention through eminent domain, but mostly cities evolve through private investment, with investors required to take into account the existing value on the sites they develop via the price required to purchase those sites. The impression one gets from reading the city plan is that locations have been chosen as if were were starting from a blank slate, rather than asking how best to use the existing value.

5. The library: Why change the site from the current location, which was close to the centre anyway. And shouldn't we be waiting a few years before investing in a library to see how the move to electronic delivery of reading material affects the nature of a public library?

6. Future planning: No-one is going to agree on every aspect of any plan, and the main thing is to get some certainty around the environment and allow investment to proceed. So this statement from the plan (as reported on Stuff) particularly frightened me:
To ensure the city has high aesthetic appeal, a new design panel made up of representatives from the Christchurch City Council, the Canterbury Earthquake Recovery Authority and Ngai Tahu will consider every building consent application.
Yes, there needs to be a consent process, but it should be based on as objective as possible interpretation of well-defined requirements specified in advance, not an open-ended subjective judgement. This is not the way to encourage investors to sink costs into designs.

7. Asset Sales: What is it about asset sales that brings out nonsense from all parties? As Eric has repeatedly pointed out, it makes sense to constantly ask whether assets would be better held privately or publicly, and a time of massive change suggests that the optimal mix might change. It is silly for the city council to take an emotional view of its holdings of the Lyttleton Port Company or the Christchurch Airport, but it is even sillier of Gerry Brownlie to suggest that asset sales will enable the financing of the planned white elephants.


  1. 1. Agree
    2. Council was looking to put way more money into a new stadium than would come from insurance on Lancaster Park. Proposals for really big really expensive ones force the comparison between Addington and big expensive thing; consistent with my Hari Seldon story in the prior post.
    3. Definitely agree.
    4. They're playing SimCity. When you bulldoze peoples' dreams in SimCity to put up your stadium, nobody much objects.
    5. Had missed that they've moved the library; have no clue the state of the current facility.
    6. Wow did I miss that one. What a truly horrible idea.'
    7. Sillier? Or Hari Seldon?

  2. The more I read and think about the "plan" the more it looks like a sketch. Too many things don't make good sense and will probably change subject to political pressure, legal action or public protest. Does anyone else think that it'd have been better for the CCDU/CERA/CCC to sell it as a concept rather than a blueprint?

  3. Are there any other economically viable options for a warm stadium? What about massive heaters at the top and bottom of stands? Heated seats? Have these ever been considered/trialled anywhere?