The Chateau Tongariro has been shuttered and empty for two years, but a potential operator says he's had little help or interest from officials in pursuing a reopening. Photo / Supplied
The Chateau Tongariro has been shuttered and empty for two years, but a potential operator says he's had little help or interest from officials in pursuing a reopening. Photo / Supplied
The historic building is seismically unsound and has been empty and decaying for two years.
Whakapapa Holdings director and co-owner Tom Elworthy said it would require a significant upfront expense of “many millions of dollars”to make the building ready for operation, but that, on the right terms, his company would be willing to make the investment.
However, he said his company had made little headway in pursuing the option with government officials.
“A 30-year lease and a peppercorn rent would be a favourable structure. The value to the Government would be through employment, GST and an amenity that would help protect the economy of the Central Plateau. It would be a sad day for the region if the Chateau doesn’t continue. The Chateau helps Whakapapa [the skifield], and if neither of them continue it would be a real disaster for this part of the country,” Elworthy said.
He described the rundown state of the Chateau and its related buildings in the Whakapapa village as “grim”.
The Chateau is part of Whakapapa village, which serves as a gateway to both the Tongariro National Park and the Whakapapa skifield, which Whakapapa Holdings is in the process of buying.
Whakapapa Holdings was involved in the early stages of an “expression of interest” (EOI) process that the Department of Conservation (DoC) intended to run last year to seek a new operator for the Chateau. However, the effort was abruptly cancelled in September.
”DoC said nobody would be interested, but we were … we have been since the last operator gave up their lease,” Elworthy said.
He said DoC officials have made little response to his company’s interest in the Chateau, and that their interest is widely known in Wellington, including among ministers in the current and previous governments (though he has not met with any).
Minister of Conservation Tama Potaka, along with Finance Minister Nicola Willis, decided to abandon an effort to find a new operator for the empty Chateau Tongariro last year. Photo / Ella Stewart
DoC hired commercial real estate firm CBRE to run the EOI process, but cancelled it because the firm advised that it would cost the Crown “substantial millions” just to get the decaying Chateau ready for the undertaking, according to documents released under the Official Information Act. The aborted effort cost the department $46,400 for CBRE’s draft work.
The documents show the decision to abandon the EOI process was made by Conservation Minister Tama Potaka and Finance Minister Nicola Willis.
Mike Tully, DoC’s deputy director-general organisation support, said the process was “paused” so that options on next steps could be taken to the Cabinet: “We are still waiting on direction from our minister.”
Decommissioning the Chateau to save ongoing maintenance costs – boarding it up, shutting off core building systems and dropping insurance – is one step under consideration.
Whakapapa Holdings Ltd is majority owned by The South Island Office, a private equity firm in which Elworthy is a partner; it is in the process of buying the Whakapapa skifield, which is in receivership, after the insolvency of previous owner Ruapehu Alpine Lifts.
Whakapapa Holdings is buying the skifield with the help of a loan of up to $5 million from the Crown. The purchase is contingent on receiving a licence to operate from DoC, currently under consideration.
The anticipated skifield concession runs for 10 years, and DoC reports state that local iwi also hope to limit any new operating concession for the Chateau to the same timeframe.
In that time, the Crown is expected to negotiate cultural redress with iwi, related to Treaty settlement and the Tongariro National Park.
The fate of the Chateau – a Category 1 historic place listed by Heritage NZ – has been uncertain since February 2023, when Malaysia-based hotelier Kah NZ formally abandoned long-running efforts to agree to terms with DoC to renew its lease of the site.
Since March 2023, the main Chateau and its related buildings, which number several dozen, have been empty and maintained by DoC at a cost of $3m to date, including $268,000 in building condition appraisals, $45,000 for a plan to decommission the buildings, and over $150,000 for a contractor to “project manage” the empty hotel and co-ordinate efforts to consider future options.
The cost of reopening the Chateau
Elworthy said he’s had engineers review the Detailed Seismic Assessment of the Chateau, done by engineering firm WSP in 2022 for the hotel’s previous operators.
”We’ve only had limited access to the actual building … we’ve been able to get inside just once, for an hour, 18 months ago. But from what we can see from the reports, the earthquake strengthening isn’t such a big problem,” he said.
WSP engineers found the Chateau meets just 15% of new building standards (NBS) and they gave it an “E” grade, representing a “very high risk” to occupants in the event of an earthquake.
However, Elworthy emphasised that the rating is derived from the weakest elements of the building: “we don’t think the strengthening work required is that extensive, you can get a huge variance in cost for these things, we’re in Christchurch, we’ve done a few of these projects before”.
More pressing, he said, was the matter of the building’s disrepair. By DoC’s own description, the Chateau is both rundown and leaking.
DoC has not disclosed any estimates for the likely cost of restoring the Chateau, but the Treasury’s view is that it could top $100m.
The department lists “specific fiscal risks” to the Government’s economic forecasts where the expense is $100m or more over the forecast five-year period – the Chateau is listed as a specific fiscal risk.
Lease termination with Chateau’s previous operator unsettled
The department has yet to settle lease termination negotiations with Kah. “DoC is still considering its position regarding end of lease negotiations,” Tully said.
While the Crown owns the land on which the Chateau sits, Kah bought the Chateau itself and many of its ancillary buildings from the government-owned Tourist Hotel Corporation of New Zealand in 1991.
The contract stipulates that any subsequent lessee of the site will owe Kah for the buildings’ value (to be determined by appointed valuers), and, in addition, the buildings must be returned in good repair and condition, otherwise the value owed to Kah should be diminished commensurate with any deficiency.
