Ratepayers should not be subsidising efforts to bring an international hotel to Tauranga, say councillors who voted against a council deal with a development company.
Others who voted for the deal say there won't be a subsidy and ratepayers will get their money's worth from the hotel, which Tourism Bay of Plenty says is urgently needed.
Tauranga City Council's vote to partner with development company Willis Bond & Co to build a $62 million pair of civic buildings and an international brand hotel in the CBD scraped through 6-5 behind closed doors last month.
The council refused to publicly release the agreement after Willis Bond & Co objected on commercial sensitivity grounds.
A "summarised" version would be released "in due course" a council spokeswoman said, a course Willis Bond & Co said it supported.
Elected members have told the Bay of Plenty Times the council will make a section of council-owned CBD land available for the hotel.
The site on Durham St opposite Baycourt is currently a car park.
It was purchased more than two decades ago and earmarked for a hotel, but over the years numerous plans have failed to get off the ground.
Under the partnership agreement, Willis Bond & Co's will find a willing hotel developer and negotiate with the council on the terms to use the land.
City Transformation chairman Larry Baldock said there had been discussions about revenue sharing and long-term lease arrangements.
Developers may be more interested if they did not have to buy the land upfront and could spread the investment over time, he said.
Ratepayers would get the value of the land back over time as well as the economic benefit of a hotel, and the land would finally be put to use.
"Ratepayers will not be out of pocket," Baldock said.
The council gave Waikato University land for its campus development; he said, "and I don't think anyone would consider that was not a good deal for the city".
He was confident the partnership with the "credible and experienced" company would work in the city's favour, resulting in a high-quality construction.
Councillor John Robson, however, said the partnership was "commercial nonsense" and he predicted it would result in the council overpaying for the projects.
"By the nature of such an agreement, we lose all commercial tension."
He said putting the hotel in the partnership agreement, in his view, amounted to the council subsidising a commercial development.
"In my view, if the market thought a hotel would work here, the market would have put a hotel here. And if the market won't deliver a hotel... then the only way to deliver it is to subsidise it."
He said it was "bizarre" for the council to also direct developers to a specific piece of land.
The city had bigger issues the council should focus its resources on, he said.
Rick Curach agreed the council was subsidising the hotel while deputy mayor Kelvin Clout said it was not.
Mayor Greg Brownless voted against the partnership, preferring "old fashioned" tendering or design-and-build procurement methods, but said he did not think the partnership would result in ratepayers subsidising the hotel.
Tourism Bay of Plenty chief executive Kirstin Dunne said the council's move was a positive as Tauranga needed more accommodation and many international visitors wanted a familiar brand with a standard worldwide product.
How councillors voted behind closed doors
To approve the partnership agreement:
- Terry Molloy
- Larry Baldock
- Kelvin Clout
- Max Mason
- Leanne Brown
- Bill Grainger
- Greg Brownless
- Steve Morris
- Catherine Stewart
- Rick Curach
- John Robson
Source: Tauranga City Council
Process was not transparent: councillor
A councillor says Tauranga City Council partnership process lacked transparency.
The record of how elected members voted in the June 28 confidential meeting was not made public until weeks later, despite an unusual - and split - vote to release the information.
The voting record was not included in a July 6 press release heralding the "landmark" agreement, which a council spokeswoman said was "an oversight".
She later said the voting record was posted online at councillors' request, but normally would not have been made public until the meeting minutes were confirmed.
Councillor John Robson said the decision was a significant one and the debate and voting process should have been public.
"There was nothing I saw in the contract that justified the silence. The community deserves to know what is being done in their name."
According to the agenda, the discussion was held in confidential to enable the council to discuss the partnership without prejudice or disadvantage.