The Hone Tuwhare Trust

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The Hone Tuwhare Trust The Hone Tuwhare Trust Feasibility Study for the Redevelopment of the Hone Tuwhare Crib (Kaka Point) 11 December 2014 Confidential Prepared for: The Hone Tuwhare Trust Prepared by: Heta Hudson, Principal, Business Performance Audit | Tax | Advisory Contents 1 Purpose ........................................................................................................................................................................ 1 1.1 Purpose ........................................................................................................................................................ 1 1.2 Report Use.................................................................................................................................................... 2 1.3 Disclaimer ..................................................................................................................................................... 2 2 Executive Summary ..................................................................................................................................................... 3 2.1 Our Findings ................................................................................................................................................. 3 2.2 Key Areas to Support this Business Case .................................................................................................... 3 3 Approach ...................................................................................................................................................................... 5 3.1 Our Approach ............................................................................................................................................... 5 4 A Writers Perspective – Evidence of Need .................................................................................................................. 6 4.1 Provision of Writing Residencies for New Zealanders .................................................................................. 6 4.2 Summary .................................................................................................................................................... 10 5 Financial Analysis ...................................................................................................................................................... 11 5.1 Overview and Assumptions ........................................................................................................................ 11 5.2 Revenue Model ........................................................................................................................................... 12 5.3 Endowment Fund ........................................................................................................................................ 13 5.4 Project Development .................................................................................................................................. 13 6 Sensitivity Analysis..................................................................................................................................................... 14 6.1 Overview ..................................................................................................................................................... 14 7 Operating Risks and Opportunities ............................................................................................................................ 15 7.1 Operating Risks .......................................................................................................................................... 15 7.1.1 Legal and Regulatory Risk .............................................................................................................. 15 7.1.2 Financial Risk .................................................................................................................................. 15 7.1.3 Managing Construction Project ....................................................................................................... 15 7.1.4 Maintenance Costs .......................................................................................................................... 15 7.2 Trust Operating Opportunities..................................................................................................................... 15 7.2.1 Workshops ...................................................................................................................................... 15 7.2.2 Fundraisers ..................................................................................................................................... 15 8 Governance & Structure of the Trust.......................................................................................................................... 16 8.1 Governance ................................................................................................................................................ 16 9 Conclusion ................................................................................................................................................................. 18 APPENDICES Appendix 1: Profit & Loss Projections and Balance Sheet & Cashflow Statements. 1 Purpose 1.1 Purpose The Hone Tuwhare Charitable Trust (the Trust) was formed in 2010, under the kaupapa of “…inspiring people through the preservation, promotion and celebration of Hone’s legacy’” The Trust’s objectives are stated as follows: ° To purchase and restore Hone Tuwhare’s crib at Kaka Point, South Otago, for use as a writer’s residency — the first to be established in the home of a Maori writer. ° To create a visitors centre that will be open to the public and available for school visits etc. ° To support the development of resources for schools and kura kaupapa Maori, in English and Maori, covering poetry, writing, self-expression and Hone’s life and work. ° To initiate events that celebrate Hone’s contribution to the arts in New Zealand. For example, an out-door concert on Hone’s birthday, performances of his plays, poetry in schools etc. It is important to note, that while the writer’s residency will be located in South Otago, it is the intention of the Trust that the residency will have a nationwide and international focus. The Trustees have resolved that an opportunity exists for the establishment of a writer’s residency at Hone Tuwhare’s crib on Kaka Point, South Otago. The Trust is in the process of planning a redevelopment of the site to: ° Renovate and restore Hone Tuwhare’s crib and grounds situated at Kaka Point; ° Design and build a residency and visitor education centre; and ° Establish a residency programme for writers, film makers, musicians, visual artists and curators amongst others. The purpose of this feasibility study is threefold: 1. To investigate the financial viability of the project based on the proposed designs; 2. Provide the Trustees with an independently-prepared report that identifies any significant risk factors; 3. Provide the Trustees with a financial model that allows for sensitivity analysis and scenario testing. A financial model was developed to determine the cashflow requirements of the Trust and to determine the on-going financial viability of the development. The underlying methodology behind the model was tested for sensitivity to determine the financial risks and how these may impact on the Trust. Based on new facility designs and initial costings prepared by Pearson & Associates Architects Limited (Pearson & Associates) and Stan Scott, Building Consultant, Mitre 10 (New Zealand) Limited, we estimate the project to have a capital cost of approximately $775,000 (including GST). We understand that the capital will be raised from grants, private investors and potential strategic partners. 1 1.2 Report Use The findings from our feasibility study that we conducted on behalf of the Trust, have been reported to you solely for the purposes of establishing the feasibility of the project, and highlighting any potential issues that may be of relevance to you in connection with your decision-making processes. Crowe Horwath (NZ) Limited (“Crowe Horwath”) accept no responsibility for any reliance that may be placed on this report, should it be used by any party or for any purpose that has not been expressly agreed upon in writing by Crowe Horwath. In preparing our report, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information as furnished to us by the Trust and the Project Managers. We have evaluated that information through analysis, enquiry and examination for the purposes of performing our financial analysis. However, we have not verified the accuracy or completeness of any such information nor conducted an appraisal of any assets. We have not carried out any form of due diligence or audit on the accounting or other records of the Trust. We do not warrant that our enquiries will identify or reveal any matter which an audit, due diligence review or extensive examination might disclose. 1.3 Disclaimer Our report has been prepared with care and diligence and the statements and conclusions in our report have been given in good faith and in the belief, on reasonable grounds, that such statements and conclusions are not false or misleading. However, in no way will we guarantee or otherwise warrant that any forecasts of future surpluses, cashflows or financial position of
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