Invercargill CBD development all go, Farmers the anchor tenant

Monday, 26 August 2019

Demolition of the Invercargill CBD block, which will be developed into a multimillion dollar retail, food and entertainment complex, will begin before Christmas, says a relieved but happy Scott O'Donnell, pictured in Esk St.

It's full steam ahead for the Invercargill CBD development, with Farmers confirmed as the anchor tenant and the final funder to be announced on Tuesday.

'We have actually got a project that's at the go point,' said HWCP Management director Scott O'Donnell, the man behind the upgrade.

HWCP director Scott O'Donnell walks through the empty Cambridge Arcade in the Invercargill CBD, part of the four-street block that will be demolished and rebuilt in coming years.

'It's great relief but also joy.'

Community Trust South is expected to announce on Tuesday it will be the final funder for the first three stages of the project, though O'Donnell declined to speak on that issue.

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It had not been easy reaching the point where he could confirm the development, consisting of demolition of an entire CBD block and total redevelopment, would proceed.

'For moments in the last couple of weeks I thought it was probably 50-50 … we had some public funders who had to go through due process and you can never guarantee which way those things will go.'

A lot of work had been done by a lot of people, he said.

'It's a 100 year investment that's going to happen in the next two to three years.'

He noted the excitement teenagers were showing towards the project and believed the CBD development may motivate some to return to Invercargill.

'We have been really good at exporting all our talent and now we have got something that actually brings it home.'

The development's retail, food and entertainment would bring life to the city and he suggested people may spend more money in their province rather than taking it elsewhere.

The Farmers store would take up just under 6000 square metres, just under half of the total retail space which would house about 40 retailers in total, he said.

He hoped to have Farmers open in November 2021.

Farmers was a 'good strong brand' which would bring foot traffic to the CBD and attract other retailers around them, he said.

Starbucks was the only other retailer confirmed and another 25 retailers were being talked to.

Given HWCP didn't get as much of a bank loan as hoped, it had reduced the carparks in the design from 870 to 700, saving about $10m.

The total cost of the project would be about $240m, with the first three stages costing about $160m for retail, food offerings and carpark.

Those first three stages were being funded by the O'Donnell family [up to $25m], Invercargill hotelier Geoff Thomson [up to $25m], the Invercargill City Council [up to $30m], the Government's Provincial Growth Fund [lending $19.5m], bank loan [$50m], and it is understood Community Trust South will make its announcement Tuesday.

The remaining stages of the development would consist of a building for HW Richardson Group, of which O'Donnell is a director [$20m], medical centre [$25m], possibly SIT accommodation [$25m] and possibly civic building [$10m], to be funded separately.

Building consent was still required and O'Donnell expected demolition of the block, bordering, Tay, Dee, Esk and Kelvin streets, to begin before Christmas.

Demolition would take six months minimum, with the company doing the work yet to be announced.

O'Donnell expected the whole project to be finished by the end of 2022, 'but no guarantees'.

He would meet with the Southland building industry on Thursday to get feedback on who had the ability, capacity and desire to be involved in the construction work.

'We want to use locals wherever possible but we can't pay a massive premium for that because there's not enough fat in the fire.'