Council considers pulling funding from Heart of the City amid mass board walkout

Funding could be stripped from beleaguered business association Heart of the City, Auckland Council’s boss has confirmed.

Chief executive Phil Wilson presented to councillors at its monthly governance meeting this morning.

The majority of the board resigned last week, calling on Auckland Council to suspend funding to HOTC and consider an audit.

The council has some oversight of the business organisation under the Auckland Council Business Improvement District (BID) policy.

HOTC receives slightly more than $5 million in funding through a targeted rate under the policy.

Wilson told councillors that following the mass resignation, council staff were in ongoing discussions with HOTC.

“They obviously require refreshed governance to be put in place, and we need to and are doing the appropriate investigations.

“We need to ensure ourselves as guardians of the ratings mechanism that everything is being managed appropriately, prudently and the right governance is in place.

“We will report in due course what the outcome of that is,” Wilson told councillors.

Auckland Council CEO Phil Wilson. Photo / Herald/Cameron Pitney.

North Shore Ward councillor Richard Hills said the situation was “pretty concerning”.

“When you have the CCO [chief commercial officer] of SkyCity, the Park Hyatt, big companies, essentially saying we should hold money and audit ... it’s concerning.”

He told Wilson a lot of people had contacted him worried about the ongoing tensions at HOTC and asking what action the council was taking.

“Obviously you can’t talk about it all openly, but what are we investigating?” Hills asked.

Wilson replied the council had various options, including canning the targeted rate, but that was not a recommended path.

“We do have the ability to withhold monies if we have legitimate concerns.

“I can assure you the staff are looking at this at the moment. It is appropriate we are assuring ourselves that we are not putting money into anything that is sub-optimal in terms of governance, etc. We are making the appropriate investigations.”

The resignation of board members comes after HOTC chief executive Viv Beck was suspended from her role in March.

HOTC then engaged lawyers, beefed up its “financial oversight” and agreed to launch a governance review. An employment investigation was also launched by HOTC relating to Beck.

Beck was later reinstated following an Employment Relations Authority finding.

In a lengthy statement from the board members when they announced their resignation, they outlined several concerns about the organisation and record-keeping.

Cutting funding is not unprecedented.

In 2024, the Ōtara-Papatoetoe Local Board decided to cut all funding for the Hunters Corner Business Improvement District (BID) in the following year.

The decision was made because of concerns with Hunters Corner Town Centre Society about non-compliance with the council policy, as well as several accountability and governance issues.

Manukau Ward councillor Lotu Fuli asked if enough was being done to support the 50 organisations across Auckland that received BID funding.

In response, Wilson said: “With nearly 50 BIDs around the region ... I don’t know whether I should expect frequent problems. But certainly it’s in the nature when you have 50 organisations, you’re going to have speed bumps and tensions between employees and boards.

“I think we can do more. But I have to say the BID policy is pretty robust in terms of providing the right foundations for these. We can probably do a bit more in terms of proactively monitoring the BIDs and early identification of issues.

“We’ve got one and a half staff in the BID team, so it’s fairly stretched.

“But if people are aware of any specific issues with BIDs, please bring them forward and I’ll get staff to look at them.”

Mayor Wayne Brown said HOTC was the organisation that received the most money.

“We do need to get to the bottom of this.”

Beck has not made herself available for interviews since the board walkout, but in a statement said the organisation was: “Working through next steps constructively with Auckland Council while our team continues to work hard on behalf of city centre businesses.

“It has been a difficult period for our team, who have worked with professionalism and integrity throughout. We remain focused on delivering for businesses and supporting a vibrant urban environment for all.”

Katie Bradford is a Senior Correspondent at the Herald. She has been a broadcast journalist for over 20 years and was based in the press gallery for 10 years. She specialises in politics, business and Auckland issues.