Development West Coast doubles business loans

By Greymouth Star

The increase in loan applications drove up consultant costs from $43,000 to $126,000. Photo / Getty Images
The increase in loan applications drove up consultant costs from $43,000 to $126,000. Photo / Getty Images

Development West Coast doubled its business loans in the past year to $14.4 million.

It also reported a year-end loss of $345,000, disclosed at the annual meeting in Hokitika last night.

The group was set up 15 years ago, when native logging ended.

Loans were made to 20 businesses totalling $14.4m. Last year business loans totalled under $7m, and before that had dropped to just $35,000 for the year.

"People are starting to look at ways to get things going," chief financial officer Mark Dawson said today.

Operating expenses were up $300,000 to $2.3m, but he said that reflected the demolition of its buildings on Richmond Quay, where the value was written off.

The increase in loan applications from 56 inquiries in turn drove up consultant costs from $43,000 to $126,000, and legal costs from $76,000 to $127,000 as it called in experts to help assess applications, including with Cranley Farms and EPIC Westport, an IT hub.

Money was loaned to EPIC Westport, S'All Good Juice Bar in Hokitika, and Inchbonnie Hydro, which has been generating electricity since January.

DWC hailed Sounds Air, which replaced Air NZ flying out of Westport, as a "significant success story" but did not disclose the financial commitment.

Last year the trust said it had loaned Sounds Air money for one of the two new planes to service Westport. The Pilatus PC12 nine-seaters each cost about
$3 million.

Hokitika Automotive benefited from its regional business partner programme.

DWC's total fund now sits at $127m and in its 15-year history it has made 125 commercial distributions or loans with a combined value of $75.5m.

Chief executive Chris Mackenzie said the 2015-16 year saw DWC generate revenue of $9.2m and invest $5.8m into community projects, well up on $1.6m last year.

He said it had invested more in Cranley Farms to give confidence to the region that it would protect its investments and existing jobs.

It was also putting in place an exit strategy, "for when the time was appropriate".

People are starting to look at ways to get things going.

The new investment in Cranley was for business and economic reasons, "not just helping people because we feel sorry for them," McKenzie said.

During the past year the trust also had a district economic stimulus fund and a digital enablement fund. McKenzie said progress was slow with the digital fund, whereby councils applied to the Government.

He said the year-end loss of $345,000 was "not ideal" but also not unexpected given the outlay with the new funding schemes.

Chairman John Sturgeon said the trust had been supportive of the tourism sector, and that was set to pay dividends with an increase in domestic tourists.

Sturgeon said the continued challenges for the dairy sector were difficult and had affected many related sectors over the past year, however he hoped the tide was turning on commodity prices which would translate into a better upcoming financial year.

He said DWC's role was to provide leadership in challenging times.

The trust had run numerous successful workshops and events which in total drew over 380 participants.

It is also about to launch a West Coast roadshow to help groups understand where funding could come from, locally and nationally, he said.

DWC employs 12 full-time staff and one part-timer.

Trustees shared a combined $176,000 in fees, and the chief executive was paid $290,000, which was $40,000 more than the previous year.

- the Greymouth Star

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