Invercargill CBD development gets $19.5m funding boost

Sunday, 25 August 2019

Regional economic development minister Shane Jones has announced a $19.5m funding boost for the Invercargill CBD development, with the money coming in the form of a loan from the Government's provincial growth fund.

The multi-million-dollar Invercargill CBD redevelopment is closer to reality after another major funder stepped forward on Sunday.

Regional economic development Minister Shane Jones has announced the project will receive $19.5m from the Government's provincial growth fund.

Artist's impression of what the Invercargill CBD development will look like in the city block bordering Tay, Dee, Esk and Kelvin streets. Pictured is the Esk St facade.

The investment, in the form of a loan, would go towards the $160 million project in which a city block will be demolished and rebuilt to include retail, hospitality, office space, entertainment and carpark.

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Invercargill Mayor Sir Tim Shadbolt says the $19.5m provincial growth fund investment in the city's CBD development is a vote of confidence in the region.

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The provincial growth fund also committed $995,000 towards a business case, feasibility study and concept designs for the CBD development in December.

Jones said the business case for the development showed it could boost Southland's real GDP by around $48 million a year, create more than 500 jobs during the construction phase and a further 300 retail and hospitality jobs once complete.

'These results would be an absolute game-changer for Invercargill and the wider region.

'The redevelopment is an opportunity to attract businesses and shoppers back to the central city and put vacant or abandoned buildings back into use.'

HWCP Management Ltd director Scott O'Donnell, who is fronting the project, has previously said an end of August deadline has been set to confirm all funders.

The Richardson Group and Invercargill-based hotelier Geoff Thomson have already confirmed they would invest in the development and the Invercargill City Council has agreed to invest up to $30 million.

Community Trust South is expected to announce its decision on funding in coming days.

A bank has capped its lending at $50m for the project.

O'Donnell said the $19.5m provincial growth fund support was a good thing for provincial New Zealand.

The major challenge of the project was that the cost to build it was the same whether it be in invercargill or Auckland, but the rentals from it would be much less in Invercargill.

'To get an asset of good quality we need the support they are giving us.'

All the pieces of the jigsaw would come together for the CBD project early next week, he said.

'A new CBD will come out of the ground in 2021-22.'

Jones said the Invercargill CBD upgrade was a prime example of a project that was driven and powered by a region and its people.

'It may be a small city at the bottom of the South Island but it's one with a big vision.

'It's a project with widespread support from the local community and one that the Government is proud to support.'

Invercargill Mayor Sir Tim Shadbolt said the provincial growth fund contribution was absolutely fantastic and an expression of confidence in the province.

He believed the CBD development would give the city not just an economic boost but a national boost.

It 'couldn't come at a better time' for Invercargill, with a Kmart store soon to open, flights connecting Invercargill to Auckland starting and a new hotel being built by the Invercargill Licensing Trust.

'It seems to be really building momentum for not just survival, but growth.'

Southland Chamber of Commerce chief executive Sheree Carey said the chamber was thrilled the Government had the foresight and confidence to invest in the CBD project.

The redevelopment would have a massive economic impact on the city and region which was the purpose of the provincial growth fund, she said.

'This money along, with the ICC funding and the individual investors ensures the project is another step closer to breaking ground.'

Officials at the provincial development unit said the the provincial growth fund would provide the $19.5m as a subordinated loan.

Financial forecasts indicated that on completion of the CBD development and tenanting, the funding recipient would be able to meet repayments on both the bank loan and subordinated loan and bring significant public benefits to Southland, officials said.