New Zealand and Australian gaming operator SkyCity has announced that the High Court of New Zealand has ruled in favor of the company over a dispute related to the concession of its SkyCity Auckland car park.
The long-term concession was granted to MPF Parking NZ (MPF) by SkyCity under a 2019 agreement, with MPR issuing a termination notice in October of 2022.
Under the concession agreement, SkyCity ‘was required to take back the operation of the car park following the termination, with the consideration payable to MPF by SkyCity being determined by a market price methodology’.
MPF later filed a dispute over the interpretation of how the compensation sum would be calculated, with reciprocated legal action from SkyCity.
According to a Thursday filing by SkyCity, the high court ‘ruled in favor of SkyCity’s interpretation and has rejected MPF’s alternative interpretation’, meaning the compensation amount will be calculated ‘in accordance with the methodology applied by SkyCity’s valuer’.
The group notes that it ‘has financing arranged for the payment of the compensation sum’ but that ‘there remains uncertainty regarding the timing for the reacquisition of the Auckland car park assets’ and potential affects on its fiscal 2024 earnings.
Dispute results from 2019 fire and missed deadlines
The dispute comes about after a 2019 fire damaged the car park. SkyCity engaged Deloitte – which evaluated the carpark concession at NZ$187.9 million ($116 million).
The firm behind MPF, Macquarie, hired KPMG to do its own evaluation, which placed the burned carpark value at NZ$240 million ($148.13 million).
SkyCity had initially agreed on a long-term concession over the carparks with Macquarie for NZ$220 million ($135.8 million) in 2019 (with the deal to run until 2048), with SkyCity to hand over the 3,100-park space by October of 2022.
The fire at the New Zealand International Convention Center, part of SkyCity’s Auckland casino complex two months after the deal was signed caused SkyCity to miss the October deadline, allowing Macquerie the right to reverse its option to buy the car parks.
