Hamilton-based Tainui Holdings has been given a second chance to invest in building a new internationally-branded hotel in Tauranga.
The Waikato kiwi's investment arm was part of a consortium selected as the preferred developer for a hotel on council-owned land opposite Baycourt.
Tainui's success was at the expense of the other shortlisted consortium which included Tauranga builder Peter Cooney, who told the Bay of Plenty Times Weekend he was "gobsmacked" by the council's decision.
Mr Cooney developed the $30 million ANZ Building on the corner of Cameron Rd and Elizabeth St and was driving the development of a planned $10 million office building on Willow St.
Tainui has been given three months to carry out due diligence to see if the financials stacked up. If it checked out correctly, a sale and purchase agreement would come back to the council.
Tainui and hotel operator Accor teamed up five years ago to build a hotel on the same Durham St site. Resource consent was granted and plans were drawn up for a four-star Novotel hotel, but it fell over in 2008 when the global credit crunch hit.
The council voted in a public-excluded meeting last week to accept the Tainui consortium as the preferred developer.
Although Mayor Stuart Crosby could not disclose the identity of the successful applicant until it had reported back to its shareholders, Mr Cooney understood that it was Tainui. This was confirmed to the Bay of Plenty Times Weekend by several council sources.
Mr Crosby said the council was faced with two superb proposals and he urged Mr Cooney and Rotorua-based hotel developer Ray Cook to stay positive because if the preferred development did not reach fruition they were the next cab on the rank.
He said the preferred development was slightly larger in terms of rooms and conference facilities, but otherwise they were very similar. The only other difference was that the preferred developer had a more internationally known hotel operator, although Mr Crosby said the difference had not been a stumbling block.
Tainui Group CEO Mike Pohio saidthe iwi was "not in a position to comment on it at the moment".
Mr Cooney said he was disappointed at the council's decision. "Here they go, giving it back to them [Tainui] to have another go."
He said he was very surprised because there was strength in their submission. "We had a hotel chain that was extremely aggressive in progressing new hotels in New Zealand."
And the type of investment agreement they had with the hotel chain meant that the funding would have been easy to arrange: "I am gobsmacked. You would think that when a hotel chain was lined up, the council would have supported a local developer."
Mr Cook was equally disappointed, saying they had a very credible consortium which included the Toga Group as the hotel operator. They were proposing to build a Travelodge-branded hotel.
Ironically his company R&B; Consultants holds the resource consent for the Durham St site, still valid from when he was part of Tainui Holdings' original joint venture proposal five years ago.
Mr Cook said they would not be sitting around for months waiting to see what happened with Tainui's bid. He said Travelodge had done its research and felt Tauranga was a good spot.
Mr Cook has just finished a Quest Hotel development in Rotorua and owned and developed the city's Novotel and Ibis hotels.