Main street meltdown: How Tauranga’s CBD plans to survive - and thrive

A crane operating at the Te Manawataki o Te Papa (civic precinct) construction site in central Tauranga. Photo / Alex Cairns

Once the heart of each town and city, New Zealand’s high streets have had to overcome many challenges over the years, including the advent of big malls, the rise in online shopping and in working from home, cost of living and inflation. Around the country, NZME reporters set out to find what has changed in the country’s main arteries, and how retailers are adapting. Sonya Bateson examines how Tauranga CBD is transforming and why cranes are a good sign.

Tauranga’s city centre is a shell of its former bustling self but leaders say cranes lining the horizon are evidence of confidence in the CBD’s bright future, with $1.5 billion of investment changing the landscape.

In the decade since toxic mould was found in the Willow St civic administration building, which led to its demolition, the downtown area of New Zealand’s fifth-largest city has faced many challenges.

These included the need for many buildings to undergo earthquake-strengthening works; shopping centres popping up in surrounding suburbs and luring retail customers; and disruption from council construction projects such as the Wharf St revamp and the ill-fated Harington St Transport Hub, alongside significant commercial builds.

A significant proportion of Tauranga city centre has been a construction zone for the better part of the decade.

For lease signs in Tauranga CBD in March last year. Photo / Alex Cairns

These issues resulted in shops closing and spaces staying vacant, complaints about the lack of and price of parking, and begging and homelessness became more visually prominent. The CBD gained the reputation of a ghost town as it also struggled with widespread economic and social trends impacting high streets around New Zealand.

In Auckland’s Queen St, the proposal to close flagship department store Smith & Caughey’s is seen as summing up the retail landscape, a Herald report found. Wellington’s David Jones closed on Lambton Quay in 2022 and now Wellingtonians are bracing for a plan to remove private vehicles from the Golden Mile.

Old model gives way to new

In Tauranga, multiple large-scale developments are under way in the city centre or – in the case of the new Farmers building and Elizabeth Towers apartment complex – have recently been completed.

The harbourfront carpark has been ripped out and is being replaced with an expansive greenspace and destination playground, which will eventually link via a freshly landscaped Masonic Park to the planned $306 million new civic precinct Te Manawataki o Te Papa that will include a new civic whare, library, museum and exhibition centre.

Tauranga Mainstreet chairman John Dewes-Hodgson, who owns Tranquillo Beauty Clinic, said the CBD was transforming from the traditional retail-and-offices model into a hub of corporations and the smaller businesses that service the many corporate employees.

Tranquillo Beauty Clinic co-owner John Dewes-Hodgson. Photo / Sandra Conchie

Dewes-Hodgson listed the big employers moving into, expanding or building in the city centre: the city council, Craig’s Investment Partners, Farmers and Elizabeth Towers, the University of Waikato, Holland Beckett and other commercial and residential developments.

“There’s so much new stuff going in and the older sort transitioning out,” Dewes-Hodgson said. “And, in the meantime, the chain stores have all disappeared.”

He said he believed the death of the traditional high street model in Tauranga began when shopping street Devonport Rd was “slaughtered” by legislatively-required earthquake-strengthening works and many businesses relocated or closed.

Those who remained had to adapt to a “different dynamic”. There were still empty shops in the city centre, but street-level offices had replaced some former retail spaces.

An artist's impression of a proposed hotel and conference centre in Tauranga's CBD, as part of the Te Manawataki o Te Papa project.

“The future is going to be corporate, and then there’s going to be service retail. It’s not going to be a chain, it’s going to be specialist shops, something that’s unique and wants to attract the downtown people.

“The workers will need [services] … they’ll want their hair cut, they’ll want their beauty therapy treatments, they’ll want some nice shops to go wandering around and have a look at.”

Dewes-Hodgson said he believed the CBD was on the right track and these adaptations would help it survive.

Counting cranes

International construction, property and management consultancy firm Rider Levett Bucknall releases the RLB Crane Index biannually, tracking fixed crane numbers in cities worldwide, including Tauranga, as a measure of construction activity.

The latest report found at the end of March Tauranga CBD had four fixed cranes, the most since 2020. Company director Chris Haines said this reflected the council’s ambition to “drive development across the city”.

Haines said continued investment across retail, commercial, industrial, hotels and civic development was bucking the trend compared to many other regions across New Zealand.

Tauranga City Council general manager of city development and partnerships Gareth Wallis said there were currently eight cranes in the city centre. He said this was a positive sign of economic growth and a bright future. The council was trying to support businesses through the related disruption with events and parking changes.

Five sites had a fixed crane: the Te Manawataki o Te Papa civic precinct, 2 Devonport Rd, 90 Devonport Rd, Northern Quarter and Panorama Towers; and there were two temporary cranes at the waterfront boardwalk and one at Northern Quarter.

Wallis said the city centre was undergoing a “once-in-a-generation transformation”, with $1.5 billion in private and public investment committed over the next few years.

The civic precinct was projected to contribute $1b in estimated quantified benefits to the city centre GDP over the next 60 years and to triple visitors to the area to 5500 a day by 2035, Wallis said. Current daily foot traffic counts in The Strand and Wharf St area were about 1600.

A view of Te Manawataki o Te Papa under construction from Panorama Towers on Hamilton St in Tauranga. Photo / Alex Cairns

Wallis said high streets worldwide had been hit by macroeconomic factors such as Covid-19, inflation, growing popularity of shopping malls, rising living costs and community safety concerns.

However, the core principles of a traditional high street concept held true: a focal point where people would meet and spend time, generating a “constant buzz of activity”.

Pivoting to find new ways of creating that “central buzz” was key.

“The increased construction is a sign that bringing our city centre back to life is no longer just talk, it’s really happening. Great cities continually change and grow, and there are new and improved places to visit popping up all the time.”

General manager of Northern Quarter developer JWL Investments, Chris Morris, said the high crane numbers were because stakeholders had confidence in the area’s future and businesses were looking to return.

Work is under way on the new Tauranga City Council building on Devonport Rd. Photo / Alex Cairns

“The cranes are the tip of the iceberg, they will trigger developments with less scale including refurbishment of existing properties along Grey St and Devonport Rd.”

Return of retail

Chief executive of economic development agency Priority One, Nigel Tutt, said Tauranga had “momentum”.

“The public can look forward to seeing a dramatically different landscape when these buildings start to complete from next year onwards.

“With more people in the CBD I’m very confident that we’ll see retail return in numbers, complementing the number of great bars and restaurants that we already have.”

Tutt said the Western Bay’s non-residential consent values made up a “staggering” 20% of New Zealand’s total in the March quarter.

Chamber of Commerce chief executive Matt Cowley said city centres were always evolving.

“Ultimately, the goal for Tauranga’s city centre is to become more than a 9-to-5 work destination, which is starting to occur with a number of apartment buildings in the pipeline.

“Ideally, main streets will work with neighbouring shops to provide package offerings and promos to attract the different types of customers from weekdays to weekends.”

Cowley said the silver lining to all the construction-related disruption in the city centre was new businesses could try new things and negotiate flexible lease arrangements with landlords, whereas landlords in shopping centres could largely dictate their terms.

Sonya Bateson is a regional content leader with more than a decade of experience reporting in the Bay of Plenty region.