An upgraded Whanganui velodrome could run up an estimated loss of almost a quarter of a million dollars in its first year.

A review of costs commissioned by the Whanganui District Council has estimated it would cost $285,000 to run the facility with an income of just $46,000 leaving a deficit of $239,000.

That is more the five times what ratepayers fork out for the velodrome each year as it currently operates.

While the numbers assumed no sponsorship or grant money, which would be required to break even, the report said the estimates would "assist decisions around whether to commit ratepayers to financially support any operational shortfalls".

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Whanganui district councillor Philippa Baker-Hogan said the numbers did not look "completely positive" and at Wednesday's property and community services meeting urged Cycling New Zealand (CNZ) to commit to being a tenant to help with costs.

CNZ is deciding whether its Regional Bike Performance Hub and associated staff will be located at Massey University in Palmerston North or Whanganui's proposed revamped velodrome.

The report said it would be six months before Cycling NZ was likely to make this decision. "Therefore we have assumed no tenant income."

Ms Baker-Hogan it was vital CNZ was a tenant and wanted council to push for it.

"It's pretty hard to make a cycling facility work without the national sport body having a tenant here," she said.

"I think it's really important ... for the commitment that it would take, largely of this community and council, that they are a tenant here.

"That kind of position is worth money to this community and would assist with the operating costs."

CNZ chief executive Andrew Matheson has said the organisation is "totally committed to the benefits that roofing the regional velodrome in Whanganui will bring to New Zealand cycling at every level and support the Regional Velodrome Roofing Group unconditionally".

Ms Baker-Hogan said the estimated costs were not a surprise but was a place for council to work from.

"I think this council must lead this and do our very best to get a viable facility, a covered velodrome for the city."

Architect Barry Copeland's impression of how a roof on the velodrome might look. Image/ Copeland Associates
Architect Barry Copeland's impression of how a roof on the velodrome might look. Image/ Copeland Associates

Leigh Grant from the Regional Velodrome Development Trust, which is behind the upgrade, was confident CNZ would be a tenant.

And he believed the estimated losses would come down once the facility became known and pointed to the Cambridge velodrome which operates at a profit.

"Don't forget that's the first year. The first year is always the hardest because you haven't got a profile," Mr Grant said.

He said once up and running the facility would attract enough events to be sustainable.

"We believe that if the place is managed properly ... then I'm sure those figures will come down dramatically."

The upgrade, last estimated to cost $12.5 million, involves roofing the existing velodrome at Cooks Gardens, building a speed skating track and an upgrade of amenities and track infield.

Last year the Government announced $6m towards capital costs and the council has also set aside $1m.

Mr Grant said they were waiting to hear the results of several other funding applications.

Resource consent to build the roof was granted last year.