Cold feet stall Harbour Central Marine Precinct

Local officials are re-assessing the Tauranga Harbour Central Marine Precinct development after a group of investors have indicated they can't make it work financially under the current economic and leasing conditions.
Four interested parties made inquiries about the $80 million Sulphur Point marine precinct project, managed by economic development agency Priority One.
But the investors/developers backed off when they struggled to balance the figures for the "glossy master plan" in the difficult economic climate. One hurdle was operating on leasehold land and paying a commercial rent.
The intention was always to develop the precinct off Mirrielees Rd in stages but the timing is now likely to be pushed out - and stage one, which could get under way by the middle of next year, will be smaller.
Tauranga Mayor Stuart Crosby indicated the council might consider selling some of the land to give investors more confidence and security.
"It's my personal view that we don't have to own the whole site. But we would seek to retain the waterfront frontage to give the public as much access as possible. There are covenants on the title and the land won't be turned into apartments," he said.
A feasibility study, commissioned by Priority One, recommended a travel lift, an all-weather refit shed and 6000sq m of marine shops, cafe/restaurant and offices for the first stage on the waterfront underneath the harbour bridge.
Later development would include further refit and maintenance facilities, a 600-tonne syncrolift (taking vessels up to 55m in length out of the water), an environmental paint hall, engineering and other workshops, more office/retail buildings and expanded boat-building activities across the road.
The Moana Pacific Fisheries processing plant would be part of the precinct. The total site of 4.9ha, including 1.4ha on the other side of Mirrielees Rd, is owned by Tauranga City Council after purchase from Port of Tauranga.
Some of the interested investors said they would still like to be involved with the project - under different and more favourable conditions.
The council is currently talking with an existing tenant, Hutcheson Boat Builders 1993, about a longer tenure. Its owner, Don Mattson, is keen to expand his operation, which includes repairs and maintenance.
He and other tenants on the site have been operating on a month-to-month basis since the old 600-tonne slipway was removed to make way for the second harbour bridge.
Anthony Averill, the council's property manager, said Priority One put forward a good concept but right now "we haven't got an investor prepared to take on the whole development.
"We have a party who is going to get on with stage one, which has private-sector investment. He is keen to see the marine industry take off here," Mr Averill said.
Mr Mattson told Bay of Plenty Times Business that he had been wanting to do something on his site for a number of years.
"We are having talks to make something work. The ground has shifted a bit and the grand scheme won't happen immediately.
"There's the cost of the development and some dredging to do ... and the downturn in the economy changed the dynamics," said Mr Mattson.
"Still, the market needed to be tested and the project will be done in a slower and different format."
Mr Mattson is looking at introducing a 200-tonne travel lift, costing about $5 million, to bring boats ashore from the Edwards slipway for refits and maintenance.
The lift, which handles fishing, ferry and recreational boats/yachts, picks them up in a sling and moves them around the site.
Mr Averill said council would consider upgrading existing buildings, replacing and strengthening some of the seawall and sealing some of the Hutcheson site with asphalt to create a hardstand.
He said Hutcheson would continue to lease a similar amount of land - up to 20 per cent of the whole precinct site.
An application for a plan change - re-zoning the site to marine-related activities - will be heard by an independent commissioner in February and work off Mirrielees Rd could begin after July.
That application was being funded by Priority One, which has spent $250,000 of members' contributions during the past four years preparing the marine precinct concept plan.
Mr Crosby said that in today's climate it was going to be hard to get the project over the line.
"We have to be flexible and creative, and offer a package that will work - including a commercially appropriate security of tenure so an investor can proceed with stage one, and more business will build from there," he said.
"I'm confident that by July next year there will be a lot more certainty about the development."
Mr Crosby said a lease agreement beyond 30 to 35 years was required to make the project work.
Andrew Coker, Priority One chief executive, confirmed that one of the challenges was the leasehold land.
"We have learned in economic development that if you don't own the land, then things take time," he said.
"I wish it could go faster, but you can't force developers/investors and you just have to go with the flow.
"At the end of the day, we will still have an $80 million development that will have world-class refit and new build facilities close to a deepwater harbour."
The ultimate development would pump an additional $100 million a year into the local economy and create long-term employment for nearly 300 skilled workers earning an average gross salary of $53,000, according to an economic impact report prepared by the University of Waikato.