Majority of Heart of the City’s board resigns as they call for Auckland Council to pull funding
The Auckland city centre business association, Heart of the City, has had a mass exodus of its board tonight after months of turmoil in which its chief executive was temporarily stood down and subject to an employment investigation.
Six voting members of HOTC’s executive committee, including chairman Malcolm McCracken, have resigned. They have also called for Auckland Council to suspend funding to HOTC and consider an audit.
It’s understood there were only seven members on the HOTC board left before tonight.
The resignation of the 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.
On May 20, Beck succeeded in an Employment Relations Authority (ERA) legal challenge against the HOTC board after it found Beck had an “arguable case” she was “unjustifiably suspended”. Beck then returned to her role as chief executive.
In a statement released tonight, the HOTC board recommended that the council exercise its right to audit HOTC 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.
The HOTC board has also recommended the council withhold funding “until it is certain that the organisation is delivering value for money” for the businesses and entities HOTC is responsible for as part of its BID policy.
“The executive committee considers that, despite its best endeavours, the society cannot meet its legal, constitutional, contractual obligations without being compelled to invest an extraordinary portion of the public funding and resources intended for activities that contribute to the economic prosperity of the 15,500 businesses and 159,000 workers that make up Auckland’s central city,” the resigning executive committee members said in today’s statement.
The HOTC board members who have resigned are McCracken, secretary Chand Sahrawat, Richard Hansen, Callum Mallett, Chamanthie Sinhalage-Fonseka and Brett Sweetman.
The HOTC board said the resignations were the most responsible action given the use of public funding needed “to resolve the society’s governance challenges”.
“One of the most significant issues identified is the society’s non-compliant register of members, which renders the society incapable of knowing how many members it has.
“In relation to this, we have taken advice from HOTC’s lawyers, and based on the initial review of the information provided by HOTC staff, we have reluctantly concluded that, among other concerns, the membership register is not compliant with the Incorporated Societies Act 2024 and the Heart of the City Constitution, and the barriers faced internally mean we cannot see a pathway by which to get the organisation to a state of compliance.
“We have been advised that this is not only an issue with legal compliance but also breaches the BID contract with Auckland Council.”
The HOTC board has also recommended that the council appoint a council officer as a non-voting member of the HOTC executive committee.
Beck told the Herald news of the mass resignation came as a surprise.
“This has been a difficult period for our team, who have continued to work hard on behalf of city centre businesses with professionalism and integrity. At all times, staff have acted openly and in good faith, engaging constructively with the Executive Committee.
“We remain focused on delivering for businesses. 2026 is an important year, with exciting developments and opportunities that will bring a new dimension to the city centre.”
Mayor Wayne Brown said there “seems to be a systemic issue” with HOTC.
“In March, I raised concerns with the board over the performance of the organisation and its compliance with the council’s BID policy,” he told the Herald.
“As a result of the mass resignation of committee members, I am seeking urgent advice from staff in response to this dysfunction. I want to be very clear that our CBD and its businesses deserve better.”
Steve Bielby, a HOTC member and owner of St James Theatre, has been representing a group of CBD landlords who had been mobilising for months to call for a special general meeting (SGM) to challenge the board.
He submitted a member’s notice of motion to the SGM calling for all board positions to be vacated and be up for nomination and re-election.
“I just think it would clear up all the issues. I think [board members] need to reseek a mandate, and I just think it’s the right thing to do given these questions. Let’s have a nice, clean start,” Bielby told the Herald in May.
“I think, at the moment, there could be the accusation levelled that you have potentially defective members on the committee voting.”
In its statement tonight, the HOTC board said it unanimously voted on May 20 to hold a SGM to cover off matters raised by members.
“At the same board meeting, the board also unanimously voted to bring its membership register into compliance, so that a legitimate SGM can be held.
“This was based on the society’s lawyers’ assessment, after an initial review, that HOTC’s membership register appeared to be in breach of the Incorporated Societies Act and the HOTC constitution, and it appeared to have been the case for a number of years.”
The HOTC board alleges the existing database did not present an accurate reflection of who is a member of the organisation.
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