ICC to decide whether to spend millions on CBD development

Sunday, 11 August 2019

Artist's impression of a part of HWCP Management Limited's CBD redevelopment. Pictured is the Esk St facade.

Invercargill city councillors will this week decide whether to spend millions of dollars of ratepayer money on the CBD redevelopment.

In what will be one of the council's biggest decisions, elected members are set to vote on whether to invest up to $30 million in the CBD project during a full council meeting, which starts on Monday and could be spread across three days.

HWCP Management director Scott O'Donnell speaking at the resource consent hearing for its planned Invercargill CBD development [file photo].

They will be asked to determine if community wellbeing outcomes outweigh any risk of investing.

The council has been consulting with the public on if it should invest in HWCP Management Ltd's plan to demolish an almost entire inner city block and redevelop it.

The block would include retail and food and beverage precinct.

* Proposed Invercargill City Council CBD block investment draws differing views

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

* CBD developer targets November 2021 for anchor tenant opening**

Council has been asked to invest $20m as part of the $180m needed for stage 1, 2, and 3 of the development.

Based on a $20m investment the annual servicing costs of the loan would be approximately $600,000 each year for the loan period, and up to $900,000 each year based on $30m.

A report prepared by ICC's strategy and policy manager Melissa Brook recommends the council invest $25m, subject to satisfaction of the design and conditions.

The report says before councillors make a decision they need to determine what the social wellbeing benefits are to the community, and whether the proposal in its current form delivers the desired benefits.

The recommendation includes that a further $5m be allocated to the chief executive Clare Hadley, and the chairperson of Invercargill City Holdings Ltd, to potentially invest in helping implement possible design changes to enhance community wellbeing outcomes.

The report also says the council needs to weigh the risk of not being involved in the investment, and what impact that is likely to have on the social and economic wellbeing of the community.

The report lists the advantages of investing, which includes providing a level of confidence to other investors in the project and to investors in the city.

Another advantage is that the council will have a voice on the entity tasked with undertaking the development.

Included in the meeting agenda are other reports relating to the CBD including a due diligence and report outlining what the council has discovered from engaging with other councils.

It includes councillors visiting Lower Hutt, Porirua, and Palmerston North.

A report prepared by councillors Alex Crackett and Lesley Soper says; 'We gained the definite impression that any proposal we support must not be an autonomous mall entity that contributes little to the physical, social and commercial fabric of the centre city.

'What we observed is that the traditional box-malls we saw were all inward-focussed; to some extent sucked the life out of their surroundings; and created vacuums for hospitality and retail.'

'Council is well poised to take advantage of the subsequent learnings, strategies and planning to mitigate the 'vacuum' effects of a mall that these three cities have taken over a decade or so to realise.'

'Council is in a fortunate position where it can influence what are considered the negative effects of malls.'

The council would not have this opportunity before it had it not been for the drive and commitment of HWCP directors Scott O'Donnell and Geoff Thomson, the report says.