Our Place container village on the corner of Willow and Harrington Sts. Photo / George Novak
Today Tauranga City Council is set to decide whether to permanently shut down CBD container village Our Place in a bid to slash spending after a Covid-19 revenue hit.
The council's executive has recommended ditching or reducing funding for 11 services in total, in a bid to trim operating expenses.
It was part of a package of proposed cuts - also covering staffing and capital costs - that would bring the average rates rise down to 4.9 per cent from the previous drafted 7.6 per cent.
Staff also recommended putting parking machines at boat ramps - at a cost of $50,000-$100,000 - in the hope of collecting an extra $100,000 in revenue next year, and $400,000 a year thereafter.
Most services would only be gone temporarily, but staff have proposed permanently defunding Our Place, the tropical display house in Robbins Park, hanging baskets in the city centre and Tauranga's public New Year's Eve celebrations.
Our Place is run by Chris and Rachelle Duffy of Little Big Events. They lease the Willow St site of the demolished council office building for $1 a year.
They pay operating costs - including leasing containers - and collect rent from tenants, mostly hospitality and retail shops.
Since opening in August 2018, Our Place has struggled to become self-sustaining and has received funding top-ups from the council, which frustrated some other CBD businesses who saw the village as competition.
The council has spent $537,000 on the site since the building was demolished in 2017, including preparations for the village. Of that, $120,000 was in grants or operating subsidies for Our Place.
Ten of the 30 containers available for tenants are leased, with 20 vacancies.
Our Place's lease with the council is due to expire on July 9, and a council spokesperson said it had been working with the business and tenants on future options.
But with finances tightened post-pandemic, council staff are now recommending it be closed permanently due to the risk it will need future funding, according to a staff report prepared for the meeting.
A temporary closure was said to be too expensive, mostly due to the roughly $200,000 a year cost to lease the containers from Royal Wolf.
If the village closed, tenants would have to relocate, but other opportunities to use the space could open up.
Chris Duffy told the Bay of Plenty Times he and Rachelle had personally contributed more than $200,000 to the project.
He said whatever the council decided would be the right decision for the project given the current situation.
The Our Place model relied on reaching a particular occupancy rate to be sustainable.
"We acknowledge that the retail environment, in particular, is a challenging space to be in and this component has unfortunately put pressure on the project."
He said they were looking at other "sustainable and responsible" options to continue building Our Place as a "point of connection, with a shared commitment to creating a community ecosystem of people and skills and resources".
Three Our Place tenants told the Bay of Plenty Times they wanted the village to stay, and the CBD would be a much less vibrant place without it.
Glenn Miekle, owner of High Tide bar - an Our Place original tenant - said the decision would come at a "pretty hard time".
If the village closed, he would be out the cost of doing up his container, unless he could move it elsewhere.
It was "fair enough" ratepayers would not want to pay to keep Our Place going, but he believed it could become financially sustainable if it was halved in size.
"It really is a great little community space that does attract people to the CBD."
It provided small premises for emerging businesses to test their idea in the market before potentially moving on to larger spaces in the city.
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He said the perception that tenants were getting council handouts was false.
"We all pay rent every week."
He said his business had done well in Our Place and, in his view, getting rid of the village would make the CBD "even more of a ghost town".
Rawiri McKinney opened his new music promotion business Riff Raff Promotions in the village in February and said he would be disappointed if he had to find somewhere else.
The former music teacher, who works with school bands, believed Our Place had the potential to be an "absolutely amazing" music venue, if it was done up a bit and marketed differently.
"Downtown Tauranga really needs something like that."
Mount Made Ice Cream owner Glenn Stubbs - another original Our Place tenant - said it would be "a bit of a bummer" if it closed.
"It's been pretty good down there for us."
With all the construction in the CBD, he reckoned Our Place would have become "busier and busier".
On New Year's Eve events, staff have recommended cutting $440,000 in funding, leaving only $50,000 for security. That would mean no more public-funded community celebrations and fireworks.
Staff said it was a lot of money to spend on a short period of entertainment.
Council staff estimated defunding the hanging baskets - which come out three times a year in seasonal sets of around 50 - and display house would save $89,000 and $61,000 respectively.
Tauranga South Garden Club president Joan Malcouronne has fought to keep the tropical display house open before and said it was a shame to see it considered for closure again.
"I can understand how the council are looking at ways to claw back from money, but I don't think Tauranga City Council appreciates how it ... can lift people's spirits."
Tauranga had few public gardens, she said, and if the house closed the money should go to another green space rather than disappearing into council coffers.
Former Tauranga councillor Catherine Stewart, who stepped down at the end of the last term, was a big advocate for the baskets and said it was a shame for the council to "pick on" a service with small costs and great benefits.
"It is easy for a city centre to look austere, like a concrete jungle. The baskets are welcoming and make you feel cheerful."
Tauranga mayor Tenby Powell said the council had to balance the need to cut its cloth on behalf of residents without "stripping the city bare of amenities".
"The council is looking at a whole range of options within our revised budget, including the way we operate."
Regarding Our Place, he said although it did add vibrancy, the council also needed to listen to the concerns of Mainstreet retailers. He described the tropical house as a "historical feature" of the city.
He said the council was counting on central government funding to help stimulate the economy, and that money would "walk" if the council could not show it could act as a rational co-investment partner in its own financial decisions.
Brian Berry, chairman of mainstreet organisation Downtown Tauranga, said anything that reduced the "ambience and activity" in the CBD would be "unfortunate".
He said Our Place added vibrancy and helped to channel customers to other CBD businesses, but some Mainstreet members questioned whether the council should be supporting a commercial entity.
"Whilst it has been a success at times, it never reached its full potential."
On the chopping board
Today Tauranga City Council will consider recommendations from staff to reduce or cut operational funding to these services:
Permanent
- Reduce New Year's Eve event funding ($444,000)
- Remove budget for tropical display house in Robbins Park, withdraw service ($61,000)
- Remove budget for hanging baskets in CBD, withdraw service ($89,000)
- Closure of Our Place site
Temporary reductions
- Events framework funding ($200,000)
- Council-organised events ($100,000)
- Historic Village functions and events ($40,000)
- Emergency management community education budget ($25,000)
- Harbour encroachment budget ($50,000)
- Potential budget for energy, carbon and sustainability management and advisory services while fresh approach considered ($100,000)
- Waterline education programme ($45,000).
Source: Tauranga City Council
Proposed plan: financial overview
Highlights from council staff recommendations for a re-drafted Annual Plan 2020-21, which is likely to go out for public consultation.
- Capital budget $225m
- Rates increase 4.9 per cent
- Debt to revenue ratio 239 per cent
- Commercial differential 1:1.2
- Uniform annual general charge 10 per cent.
Source: Tauranga City Council
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