Crown goes it alone on Christchurch Convention Centre after breakdown

Wednesday, 29 June 2016

Christchurch will get a scaled-back taxpayer-funded convention centre complex after the breakdown of a two-year public-private partnership.

The Government announced it has parted ways with its private development partners on the project, Plenary Conventions New Zealand – a private consortium partner made up of Australian-based firm Plenary Group, Christchurch's Carter Group and Ngai Tahu Property.

The Crown has taken a preliminary design from the process and will deliver the development alone.

Greater Christchurch Regeneration Minister Gerry Brownlee said site preparation would start immediately and groundworks would begin in October. The facility will be finished by late 2019, from an original 2017 completion date.

The news follows years of plans, delays, public uncertainty and behind-doors talks since the anchor project was announced in mid-2012, and the private consortium brought on board in 2014.

The new plan scraps the original half-billion-dollar idea of a major precinct with hotels, office buildings, apartments and shops. Gone also is the public-private funding deal, which would have seen the private sector top up a $284-million taxpayer spend.

It is understood the Government was struggling to keep control of costs within the private-public partnership format.

As part of the deal, all designs and other intellectual property will be transferred to the Crown.

Labour's Canterbury spokeswoman Megan Woods said the Government had failed to do a commercial deal and taxpayers were now 'stuck writing a blank cheque'. She called for answers before more public money was spent.

Private developers welcomed the news as a game-changer.

'The area around the Square won't be a wasteland for another five years. Now with some certainty, it will give us a whole lot more momentum,' said Square landowner and developer Miles Yeoman.

'Let the free market get on and build the hotels. It is hard to get hotels to work, and [the Government] have learned that.'

Ivan Presquito, whose company has planned two Cathedral Square apartment towers, said the progress would have 'a very positive impact on our development and bring life to the Square'.

Brownlee said the split with Plenary Conventions New Zealand was mutual. 

He declined to reveal the expected cost of the new plan, citing commercial constraints until construction contracts were signed.

'We've spent a long time negotiating. There were challenges around a public-private partnership. We got to a point where we have to go ahead,' Brownlee said.

'The design is significantly advanced. It should be pretty much straightforward from here.'

Plenary, Ngai Tahu and Carter Group did not return return calls for comment.

They would soon select construction contractors, Brownlee said.

'We will negotiate if someone wants to put a hotel or two, or apartments, on there,' he said.

Albert Brantley, chief executive of Crown company Otakaro formed to deliver the anchor projects, said there was now 'a clear goal in sight' to complete planning work already done. Work will start in July rerouting underground services and closing Gloucester St between Colombo St and Oxford Tce.

Canterbury Employers' Chamber of Commerce general manager Leann Watson was 'relieved' progress was finally being made.

She described the convention centre as a 'vital piece of infrastructure that will make an important statement', instil confidence, and underpin visitor growth.

Woods criticised the plan's lack of extra facilities, such as shops, hotels, apartments and offices.

'Instead, we are left with a 'build it and they will come approach' where taxpayers will foot the whole bill for the convention centre, with no certainty that private investment will follow.'

She asked how much of the $20m already spent would be used on the new project, what its costs and benefits were, and why the commercial partners were gone.

'What plans will be put in place to ensure the remainder of the site will be developed, and not simply land banked and left idle for years to come?'

Christchurch and Canterbury Tourism chief executive, Vic Allen said the new facility would make large international conferences possible again for the city.

'Already we have significant interest in larger conferences wanting to come back to Christchurch.'

Before the earthquakes Christchurch had 24 per cent of New Zealand's multi-day convention market, worth $100m a year, and this was now nine per cent, Allen said.

What's happened so far?

July 2012 - The central city recovery blueprint identifies the convention centre as a major rebuild project to catalyse hotel investment.

June 2013 - Christchurch City Council and Government sign a cost share deal setting the Crown contribution at $284 million.

August 2014 - The Plenary consortium is announced as the Crown's preferred developer with Accor as preferred operator.

July 2015 - Prime Minister Key says the convention centre could be downsized and the project needs commercial rigour.

April 2016 - The Press reports Ngai Tahu is pulling out of the consortium. Key says an announcement on the project is weeks away.

June 2016 - Gerry Brownlee announces the Crown will go it alone, building a pared-down project.

What's next?

July 2016 - Site preparation begins. Appointment process for siteworks contractor starts.

August 2016 to late 2017 - Design review process and development.

October 2016 - Start of appointment process for main contractor.

July 2017 - Foundation excavations start.

October 2017 to late 2019 - Main construction period.

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