ICC to make CBD development decision

Monday, 13 May 2019

An artist impression of the HWCP CBD upgrade in Invercargill.

The Invercargill City Council will on Tuesday decide if it should consult with the public on whether to invest $30 million into the $180m CBD redevelopment.

The council has been asked to invest $20 million in the project.

However, if the decision is made at Tuesday's meeting to ask the public its thoughts, the council will consult on a proposal to invest up to $30 million over the next five years.

With a build of such magnitude, the council recognised that things could change, its documents say.

* ICC to consider more funding for CBD redevelopment**

Therefore, it has proposed that a contingency of up to $10 million for risk around the budget and any costs associated with potential integration with the rest of the city.

The city block development is located between Esk and Tay Streets, bordered by Dee Street and Kelvin Street.

'This is an urban regeneration project, it's about increased community wellbeing and growth, rather than financial return,' the already prepared public consultation document says.

'Without council investment, this development is unlikely to proceed as the returns are too low to attract enough private investment.'

Council chief executive Clare Hadley said the council had previously committed to consulting with the community if direct investment in the city block was being considered.

'Councillors will decide on Tuesday whether to adopt the prepared documents for consultation with the community, which in short ask whether council should directly invest in the city block development, Hadley said.

If the council decides to consult, public consultation will begin on May 18.

The consultation document says the council's involvement would be influenced by what the community has to say.

If the council goes ahead with the proposed investment, it would be loan funded, with the cost of borrowing met through rates.

For every $10 million of loan, the council would have to pay approximately $300,000 in servicing costs each year.

The $180 million redevelopment would include retail shops including anchor tenant and small boutique stores, food and beverage precincts, covered laneways that connect the food and retail precincts to offices and a medical centre, outdoor courtyard, multi-level covered carpark providing more than 850 parks and childcare facility.

The development would open in three stages and be complete by December 2022, the consultation document says.

'Community wellbeings' to come from the CBD development would include an increase in Southland's GDP, creation of jobs, a more liveable city and more public places to connect and more diverse offerings.

However, risks of the council investment include cost to ratepayers, significant disruption to the CBD during the build, impact on the remainder of the city's retail area and risk that the council may be required to satisfy any cost overruns or risk an incomplete development, while other council projects would need to be deferred.

The council, through its holding company Holdco, has already invested $5.45 million as a funder and shareholder in HWCP Ltd which is doing the CBD development.

A hearing commissioner's decision on whether to grant the resource consent to demolish the CBD block and build the development has still not been made, but is expected in early June.

It is anticipated there will be a number of potential investors in the development.

The meeting starts at 5pm Tuesday at the council building in Esk St.