Tauranga's struggling downtown shopping centre is to get a major boost with the construction of a new 42-apartment hotel and retail development.
The Quest boutique apartment hotel will occupy the first and second floors of a new building at 71 Devonport Rd while two shops will occupy the ground floor.
Tauranga Mainstreet chairman Glenn Tuck said it was fantastic news. "Anything that brings in new business and revitalises the city centre is a big positive.''
Mr Tuck said the new building would have a flow-on effect for the rest of the downtown.
An Auckland development consortium is buying the 835sq m site from downtown property investor Rob Ofsoski, with two retailers already lined up to occupy the ground floor including the existing tenant Home Etc.
The other business dislocated by the looming demolition of the 60-year-old building was Italian restaurant Bella Mia which has occupied a corner of the site for nearly 30 years. The frontage had been pulled off the restaurant in order to get the ovens out and across the road to a new premises.
Quest apartments chief executive Steve Mansfield said they would be leasing the two upper floors. Resource consent and demolition consent had been granted by the council and all they were waiting for now was building consent. Construction was due to start in November and be completed by October next year.
He said it was a great location and would allow Quest to provide a good option for guests. Quest already operated 25 apartments in the downtown's Kingsview Towers in Durham St.
Mr Mansfield said it would be four-star accommodation and would join Quest's 34 other apartment hotels in New Zealand. He described it as a boutique operation, without a bar and restaurant.
Quest could arrange for guests to eat at local restaurants, with the bill charged back to their room. Alternatively, there was a pantry service in which meals could be brought to rooms, along with breakfast packs.
''We are not competing with the local environment.''
He said Quest tended not to accommodate group travel, with the boutique operation in Devonport Rd expected to appeal to corporate and government clients.
Mayor Stuart Crosby said it sounded like a good mix of retail and apartments and he hoped it would trigger a number of other redevelopments.
''Devonport Rd is a lovely road and very attractive. Some of the buildings are past their use-by date and this type of development is just what we are looking for.''
It will join the redevelopment of Farmer's department store in 2017 and the three-storey $10 million office complex under way on the corner of Willow St and Harington St.
Construction was also due to start next year on the tertiary campus in Durham St, in time to take its first students in 2019. ''There are no more obstacles.''
Mr Crosby did not believe the Quest apartments would put back the prospect of attracting a major internationally-branded hotel on council-owned land opposite Baycourt. He said this hotel would be aimed at a different market, with its distinguishing feature being conference facilities.
The sale was handled by Rob Pinny of Ray White Commercial who said anything new in the downtown had to be a boost.
He said Home Etc would shift back into the new building and they had found a tenant for the other shop. The ground floor would also hold Quest's reception area
Home Etc owner Kelly Mitchinson said that in the meantime they were moving a few doors up the road to the former ASB building at 75 Devonport Rd. ''It will be quite good for us, we will have a pop-up store for a while.''
Quest has advertised on Trade Me for a franchisee to buy the Tauranga Central serviced apartment business for $575,000. The anticipated start date was October 1, with annual rental of $579,000 plus GST.
Quest Serviced Apartments had more than 150 hotel apartments in New Zealand, Fiji and Australia.
Alan Jones of the development consortium was not available for comment. 71 Devonport Rd had a rateable value of nearly $2 million.
Configuration of Quest hotel apartments:
- 32 studio apartments
- 6 executive studios
- 4 one-bedroom apartments
- 11 carparks
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