The fact that the city is willing to shell out so much money for other park activities, yet are hesitant to even grant MTBers permission to take care of themselves in the park is very frustrating, yet typical.
The Shed Bike Club is a great way to go about it though, as council certainly takes a club much more seriously than a group of enthusiasts, even if it's only a group of enthusiasts with a name.
Provided that it doesn't interfere or limit the other park user's areas, is properly signed "Experts Only", and is built safely.. I can't see them not allowing all the wonderful building everyone wants. Downside is, us bikers want the trails hidden and low key, as so they don't get destroyed by those 'recreational' riders… the park certainly doesn't like that. They want to know exactly what's going on at all times, and they want the park users to as well.
They also don't want excessive danger, as they have to cover their asses. Which is why the more extreme stuff is so tough to get permission to build. I personally don't know how to go about making it ok, but if ski resorts can have board parks and cities can have skateparks, it's certainly very doable.