Invercargill City Council staff quizzed over CBD investment

Monday, 20 May 2019

From left, Invercargill City Council chief executive Clare Hadley, chairman of the meeting Rex Chapman, and council executive officer Andrew Cameron at the public meeting at the Civic Theatre on Monday night.

Invercargill City Council chief executive Clare Hadley says its calculations suggest projects already in the 2018-2028 long-term plan will not make way for the CBD development.

The council held a public meeting on Monday night at the Civic Theatre to kick-off its consultation process.

The council is asking the public if it should commit up to $30 million to the proposed $180m CBD development.

However, earlier Hadley confirmed that the council would pay up to $50m in total if it committed up to $30m in the first instance. The additional $20m of work will be needed if the development goes ahead, regardless of whether the council invests.

Invercargill City Council executive officer Andrew Cameron at the public meeting at the Civic Theatre discussing the proposed CBD investment.

The meeting was chaired by Invercargill lawyer Rex Chapman and over 200 people attended.

**READ MORE:

Invercargill City Council held at public meeting at the Civic Theatre on Monday night, to discuss with rate payers a potential $30 million investment into the CBD development.

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

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

* ICC to make CBD development decision**

Hadley and council executive officer Andrew Cameron provided an overview of the proposal before they took questions from the floor.

Cameron is also the general manager of the 100 per cent council owned company Holdco, which has invested in HWCP through its subsidiary Invercargill City Property Limited.

Hadley was quizzed throughout the meeting as to just what any council CBD investment would mean for other council projects, including the museum development.

Some in attendance were concerned with a statement in the consultation document which says; 'other council projects will be delayed because of the investment'.

Hadley said the statement was included as a potential risk rather than confirmation other projects would have to make way for the CBD investment.

'The answer is that on the modelling we have done - the project of the museum which has been mentioned - the museum could be afforded and the investment in the city block could be afford.

'We believe, and we've shown to the councillors, that we can do the prioritising and still meet our budget bench marks.'

The cost of funding the CBD development, to a ratepayer with a $2000 annual rates bill, has been estimated at an additional $25 per year to fund the CBD project.

Much of the early questioning raised concerns about the proposed council investment, before Invercargill resident Lex Chisholm spoke in favour of the council's involvement.

'At the moment it all seems to be negative talk, I'll throw a spanner in the works and go the other way.

'I am a very proud of Invercargill and a very proud Southlander. It's not brain surgery here guys, have you had a look at the centre of Invercargill, it's not flash is it?

'What is it $24?… come on guys, it's Invercargill let's be proud of the place.'

Community Trust South trustee Michael Wilson spoke from the floor confirming the community funder had been asked to contribute to the project.

Wilson quizzed the council representatives as to if they believed it was a philanthropic investment rather than a commercial investment.

'At least two of the other investors have made it clear that this has a very significant philanthropic investment aspect to it and not a commercial one. I was waiting for this presentation to raise this point, and it hasn't,' Wilson said.

'The question the Community Trust will obviously have to think about, and I also wondered the council's view on this, will we get our money back from out investment?'

Cameron responded by saying 'simplistically, when I talk about [commercial investment] you are talking about the cost of investment, cost of borrowing, and you might say six to eight percent return.

'If you are getting that sort of return above your cost, you might say it is a commercial investment.

'There is no doubt this investment will not be giving that level of return. But by the same token it will not be losing money, we will be covering the cost of investment,' Cameron said.

The public has until June 28 to submit their views on the council's proposal to invest in the project.