Up to $50m ratepayer bill if ICC commits to CBD block

Monday, 20 May 2019

Invercargill City Council chief executive Clare Hadley.

Invercargill City Council ratepayers will end up having to pay up to $50m if the council commits to investing up to $30m in the CBD block development.

The council is consulting with the public on whether it should invest up to $30m in the new city block, with a public meeting at the Civic Theatre at 5.30pm on Monday set to outline the proposal.

However, chief executive Clare Hadley has confirmed that the council would pay up to $50m in total if it committed up to $30m in the first instance.

* ICC to ask public if it should spend up to $30m on CBD block development

* CBD developer targets November 2021 for anchor tenant opening**

The public consultation document says the additional $20m of work will be needed if the development goes ahead, regardless of whether the council invests.

Council would be responsible for the works to integrate the development with the surrounding area,' it says.

'This is an additional expense [of $20m] to the proposed $30 million.'

Of that $20m, just over $6m had been included in the council's long-term plan and an additional $14 million would be required.

Hadley said the additional $20m was not to supply services to the city block.

The money would be spent on the 'cityscape', including street furniture and roading, she said.

'It is to ensure that the [new CBD development] is integrated into the rest of the CBD in exactly the same way as we do with other commercial properties right now.'

Of the $30m the council is consulting with the public on, $20m would be guaranteed money for the project and $10m would be set aside for any cost over-runs that may occur and for any design changes the council may request.

The council was trying to be upfront and honest with ratepayers, Hadley said.

'You start with a project, costs change over time, the shape of the project gets a little altered … and we want to consult once and consult very openly about what it is we are talking about.'

Councillors needed to take a 30-50 year view about what was best for the CBD when they made their decision, she said.

'That's why we are asking for that much money.

'We are not asking for a quick fix, we are asking the community how they feel about us investing in a proposal and getting that right for the long term.'

Now was the time for the public to speak up, she said.

She believed it was the most important issue the council would consult with the community on in the next decade.

This was due to the scale of investment and the fact it was a non core council activity, yet critical to the city.

'It affects everybody in different ways and it's only by getting their feedback we will really understand how people see it.'

She predicted a high volume of submissions but said the weight of the argument was what really counted.

Councillors had an obligation to consider the weight of the arguments and the councillors would consider the impact financially and socially to ratepayers, she said.

Hadley said there was a perception in the community that council investment was a done deal, which was incorrect.

'It's an open minded consultation and there has been no deal done.'

The consultation document says the CBD development is unlikely to proceed if the council does not invest, as the returns are too low to attract enough private investment.

Hadley said if the project did not go ahead she believed 'in time' something else would come forward.

The council would still be a shareholder in HWCP, which has applied for resource consent to do the CBD development, and would own a lot of property in the CBD, she said.