Investor 'sick of hitting brick wall', pulls out of Invercargill CBD development

Thursday, 21 November 2019

An original artist impression of the HWCP Development of the Invercargill CBD inner city block, Tay, Dee, Esk and Kelvin streets. Pictured the Esk Facade.

Geoff Thomson says he pulled the pin on Invercargill's city block development after becoming 'sick of hitting a brick wall' with the city council.

Thomson has resigned as a director of HWCP Management Ltd - the company behind the development - and will not make any further investment in the project.

It means HWCP now has a $21 million shortfall to address, in terms of the overall $160m needed for stage one, two, and three of the city block development.

Thomson has already spent about $4m and has agreed to leave that in the project.

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Invercargill City Council chief executive Clare Hadley.

However, he initially committed to investing up to $25m, which meant there was now a balance of $21m to find.

The Invercargill-based businessman owns the Distinction Hotel chain which operates hotels throughout New Zealand.

Thomson said he joined HWCP as an investor and director because he was passionate about Invercargill and felt the city was in a dire need of a significant CBD upgrade.

On Thursday he told Stuff he had run out of energy trying to work with council chief executive Clare Hadley to get the project started.

He understood there was a process to work through, in terms of consents and management plans, but he felt the council had made it harder than it needed to be.

'We've never had a culture of assistance [at ICC],' Thomson said.

Thomson has worked with other councils throughout the country on big projects and said the Invercargill council had a reputation with developers of being hard to work with.

He said the Dunedin City Council was 'unbelievable' easier to deal with compared to ICC.

Invercargill MP Sarah Dowie doubled-down on Thomson's comments believing Hadley had an 'over officious approach' which was holding Invercargill back.

Dowie met with a group of Invercargill builders and developers recently who she said outlined 'systemic issues' in dealing with the council.

She added the 'lengthy consent process' was having a detrimental effect on meeting housing demand in Southland.

Hadley opted not to respond to Thomson and Dowie's comments.

In an earlier release, Hadley reaffirmed the council's commitment to the city block development, following the withdrawal of Thomson.

The council has itself committed up to $30m towards the project.

'Council's motivation in investing in the block was to help create a vibrant city centre, and focus on community wellbeing. This has not changed,' Hadley said.

'The project remains a key part of an inner-city revitalisation which the community desires and Council is committed to.'

Hadley said at Wednesday's extraordinary meeting a resolution was made that council would work with the remaining investors to ensure there would be sufficient funding to move the project forward.

'Councillors have also acknowledged that we will need to consult with our community should any further investment by council be proposed.'

HWCP director Scott O'Donnell said while the project has experienced a bit of a bump in the road it is still on track to continue.

'Geoff has dedicated a staggering amount of time, effort, energy and care into getting this project as far as it has, and our community should be incredibly grateful to him for that. We respect Geoff's decision unreservedly,' O'Donnell said.

'This is just a hiccup, and that happens all the time in business. Our focus has now turned to Plan B and ensuring this game-changing redevelopment boxes on. The public support for revitalising Invercargill's inner-city is tremendous.'

Funders for stage one, two, and three of the city block development include the O'Donnell family, the Invercargill City Council, the Government's Provincial Growth Fund, Community Trust South, and a bank loan.