An updated artist's impression of Tauranga's future civic whare, exhibition centre and museum.jpg Civic whare, exhibition centre and museum.
An updated artist's impression of Tauranga's future civic whare, exhibition centre and museum.jpg Civic whare, exhibition centre and museum.
Tauranga’s controversial civic precinct project could cost ratepayers $26m a year in running costs once completed.
But a former city councillor believed that if “the right people” were elected to local government next year, a lot of the key decisions to progress the now $306.3m project could be reversed.
John Robson spoke in the public forum of a Tauranga City Council meeting about the future civic precinct Te Manawataki o Te Papa yesterday , criticising the project’s financial analysis.
The future civic precinct -Te Manawataki o Te Papa - will include a library and community hub, civic whare (public meeting house), museum and exhibition gallery.
In December, the commission approved moving to the detailed design and costing phase with the provision that the ratepayers’ contribution doesn’t exceed $151.5m.
Among key updates approved yesterday was a reconfirmation that ratepayers could be expected to pay up to $151.5m towards the project - more than double the $70m originally approved in May 2022. A 1.15 per cent increase in overall design costs and an increase to the overall budget from $303.4m that was originally consulted on and approved to $306.3m were also approved.
The commission also signed off on a report stating that once the project was completed it was expected to cost $26m annually to operate. The Long-term Plan 2024-34 was expected to include updated and more details about ongoing operating costs but the existing proposal was for the council to fund this from general rates or potentially through a targeted rate across the city.
Project funding was highlighted as a risk. It was expected most money would be sought externally through the Government and community grants plus the Three Waters reform, and development contributions. Other avenues were an Asset Realisation Reserve and airport surplus funds.
At the start of the meeting, Robson said he believed the decisions due to be made in the meeting had “already happened” and were a “foregone conclusion” with little debate or discussion.
“That being said, for the record, as a councillor I objected to this process and much of it right from the beginning,” he said.
Robson questioned the costs of different parts of the project, referencing the “$26m a year plus”.
“The numbers are frightening and an enormous burden on our ratepayers,” he said.
Robson also spoke of potential ratepayers’ contributions which increased from $70m to a $151.5m maximum. He believed it was “significantly more than that” and “the media coverage has been appalling” in reporting so.
“If the right people, in my view, are elected in next year’s election a lot of this will be reversed. It doesn’t stand. Make no mistake.”
John Robson spoke in the public forum of a Tauranga City Council meeting about the civic precinct project. Photo / Alex Cairns
Robson also questioned the value of investment in Māori cultural expression which he likened to a “taniwha” [monster] that would bite.
In response, commissioner Stephen Selwood said he did not support what he believed was Robson’s “very negative approach”.
“When we came here in 2021, we saw the legacy of that indecision, the legacy of not being prepared [to invest in the CBD], to always look at the costs and not to consider the wider benefits.”
Selwood said there were business cases that looked at social and environmental benefits and “costs have been quantified”.
“You can dismiss the cultural benefits John, but actually the city has a significant and important role in the history of New Zealand and how we came together as two cultures. To have a museum will help to educate our young... it’s fundamental to the development of this city.
In Selwood’s view: “Whilst it’s easy to be negative and cynical, what we are actually striving for here as a vibrant centre for the future of the city and all of that data and details actually supports that.
“For me, that’s where the direction lies.”
Edward Guy, managing director of Rationale, an independent advisory company that helps government and business leaders with investment decisions, told the meeting the project could result in two million visitors by 2035.
“This is a massive increase from where we are today,” Guy said.
Guy told commissioners the investments came down to public benefit.
Commissioner Stephen Selwood at a Tauranga City Council meeting today where he disagreed with John Robson's "negative" view. Photo / Alex Cairns
“It’s not all about economics.”
In the Te Manawataki o Te Papa Business Case, which was among several reports presented, council general manager of strategy, growth and governance Christine Jones said the benefits were widespread.
“Te Manawataki o Te Papa will significantly contribute to city centre GDP and deliver wider economic benefits, generating an additional $788.4m to $1,370.5m in estimated quantified benefits in net present terms over the next 60 years (assuming a 4 per cent discount rate).”
The objectives for investing in the project included increasing the existing local and regional economic output by $500m and wider economic benefits by $500m over the life of the buildings, Jones said.
It was also estimated there would be more than 300,000 annual museum visits and more than 800,000 annual community hub visits.
Jones said the council conservatively expected to receive $14m from the Government in funding.
At the meeting, the creation of an Asset Realisation Reserve was also approved - essentially creating a fund to help manage council properties and assets.
Assets being considered for potential sale to help fund the civic precinct project include Smiths Farm, Parau “Pōteriwhi” Farms, CBD car parking facilities and other council properties or facilities deemed to be worth $146.3 gross.
Willis Bond managing director Wayne Silver told commissioners the overall design costs had increased by 1.15 per cent. Despite this, he said he was “extremely confident” of keeping the project within the approved budget and the increase was minimal.
Silver also detailed what he considered risks to be wary of, such as funding.
Commissioner Bill Wasley asked Silver what he considered to be the top three critical risks.
Silver said the primary risk concern was sub-contractors.
The construction site of the Civic Precinct in Tauranga. Photo / Alex Cairns
“We are about to embrace the largest building programme in Tauranga’s history at a time when the business industry is stretched, so I would put that first.”
Silver also said “scope creep” was something that could be “catastrophic” if not kept on top of.
However, “we raise red flags like there are risks but at the end of the day, that is for council to manage ...”
“Obviously, the election coming up has the potential to cause some confusion if it’s not managed according.”
Commission chairwoman Anne Tolley said the update from Silver was “excellent”.
“There’s a degree of cynicism that it is going to cost more and more and more but that is not a huge increase, 1.15 per cent, from a preliminary design to a detailed design. It’s a pretty darn good result and shows everyone that heads are in the right place and we can keep faith with ratepayers.”
Te Manawataki o Te Papa Board chairwoman Kim Wallace said it agreed with Silver that the 1.15 per cent increase in costs was “minimal”.
“However, we are very cognisant that council publically consulted on a project costing $303.4m.
"Site A" of the civic precinct is the land between Wharf St, Willow St, Harington St and Durham St.
She said the board believed “very strongly” that every effort be made to reduce reliance on ratepayer funds, and this extended to airport surplus funds and Asset Realisation Reserve which she recommended to only be used after all other external funding sources, such as grants, were exhausted.
“If a decision was made to reverse that [single stage] approach, I think that would need to be undertaken with a high degree of cognisance about the high degree of incurring costs that are likely to be increased,” she said.
Commissioner Shad Rolleston said it had been “a significant day” for the council and the city.
The meeting ended with all public matters approved before moving into a closed session.
Kiri Gillespie is an assistant news director and a senior journalist for the Bay of Plenty Times and Rotorua Daily Post, specialising in local politics and city issues. She was a finalist for the Voyager Media Awards Regional Journalist of the Year in 2021.
