Marlborough's mayor has asked the Marlborough Research Centre if it still needs ratepayer funding — saying figures suggest it could be “stand-alone”.
The centre received an annual grant from the Marlborough District Council of $286,020 in the last financial year.
That grant was said to be one of its main sources of income, according to its trust’s annual report, along with rent from its two campuses and the sale of grapes from a vineyard it owned on Rowley Cres.
Marlborough Research Centre associate John Patterson and trust chairperson Bernie Rowe presented the annual report to the council’s economic, finance and community committee in November.
The trust encompasses the likes of the New Zealand Wine Centre, the Grovetown Campus and the Rowley vineyard. Some tenants included Plant and Food Research, NMIT Te Pūkenga, Wine Marlborough and Bragato Research Institute.
In the presentation, Patterson described the economic benefits of the research centre — first established on Grove Rd in 1984, and expanded to a second campus on Budge St in 2004.
Since then, local government had provided about $8m in funding. The government and industry had provided $12m. Research and innovation grants totalled $21m.
The value of the research, according to a report prepared for the centre, was about $76m, Patterson said.
The report further calculated the direct and indirect economic benefit from the research centre’s expenditure — such as salaries and operations — to be $159m.
The number of full-time employees who were contracted for the likes of research work had grown from seven in 1984 to close to 100.
Patterson said this had a “significant economic benefit”.
“That doesn't calculate the present value of the economic impact of the actual research itself.
“So, if you undertake research which improves the growth, or the yields of grapes, or the value of the grapes, or reduced production cost, those impacts are quite significant.”
Marlborough mayor Nadine Taylor said the centre was a “success story” but said as councillors they needed to turn their minds to its funding arrangement.
It comes after the council earlier this year told the trust the funding it got from the council needed to be better aligned with research activities.
“Marlborough Research Centre is a charitable trust, you've got fixed assets of $9.1m, and equity of $8.8m, you've done really well,” Taylor said.
“We're seeing the future investment going into accommodation, [an] experimental future vineyard, industry research, and we've heard that the wine industry is investing $2.5m.
She further pointed to the $2.4b wine industry, largely based in Marlborough, which had already contributed to its own research, “as they should be”.
“We're funding Marlborough Research Centre to $286,000, and you have an operating surplus of $375,000.
“Do you still need ratepayers to support the Marlborough Research Centre ... or are you at the point now where you can stand alone?
“Because the figures would suggest that you are stand-alone.”
Patterson said any funding received from the council was used in striving to convert into “leverage funding”.
For every dollar received from the council in the last financial year, the centre was able to get close to $4 in funding from other avenues. But the first dollar of funding was generally the hardest to get, Patterson said.
“If there was any cut ... that would directly impact on the extent of research that is undertaken and the leverage of $4 to $1 would go down exponentially.
“You would be cutting money that's going to the regional economy.”
He pointed out the centre was in debt for the first time. That loan, for the New Zealand Wine Centre, was guaranteed by the council. The loan was up to $2.8m, with $1.4m withdrawn at the end of the financial year.
Paying back the loan was forecast to take 10 years, but any change to funding could change that, he said.
Taylor said it was a good explanation.
“We've heard that the money that has gone into research has multiplied, but we've also heard that the money is needed to give stability,” she said.
By Maia Hart, Local Democracy Reporter
LDR is local body journalism co-funded by RNZ and NZ On Air.
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