Tauranga's huge growth in suburban shopping centres has left the downtown with an emerging new future as a commercial rather than retail hub.

A report commissioned by the city council has put into figures what most people already knew - that city centre retailers were being hit hard by competition, to the extent that they now accounted for only 13 per cent of the city's total retail spend.

Consultant Martin Jenkins said retail turnover in the city centre had dropped by 16 per cent since 2006 to reach $35.9 million in 2013. This contrasted with sales across the rest of the city growing by 23 per cent to reach $234.2m.

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His report was considered at a recent council meeting that agreed to go out for public consultation on a new $25m carpark building in Harington St and to spend $12m revamping the waterfront and other downtown public areas.

Mayor Stuart Crosby told the Bay of Plenty Times that retailing in the city centre would always be important. "But we need to put retail in the context of what the CBD is about today and will be in the future."

Key things highlighted in the Jenkins report was that the CBD was doing OK compared to the rest of New Zealand and that commerce and education were the dominant future, he said.

Mr Crosby said the other element was that the CBD would continue to be the cultural heart of Tauranga - a role taken by CBDs throughout the world.

He said the planned tertiary campus would be a significant game changer for the CBD, attracting other business to support it.

Mr Crosby's personal view was that it was the council's job to create the operating environment to attract growth and particularly commerce into the CBD, with accommodation on the fringes.

The real truth is the CBD has lost three times as many people than it is going to gain from these entities because of poor planning by the council.

The Jenkins report said developers were exploring potential demand for student accommodation, with more opportunities to increase residential living.

Trends in building consents and interviews with property developers and investors all suggested a number of larger firms would likely locate in to the downtown, it said.


Despite the shrinking retail spend in the CBD, the report said high value commercial and professional services had grown, with more jobs in the public, education and training sectors.

Tauranga Mainstreet chairman Glenn Tuck said the development of Trustpower's new head office in Durham St meant the CBD was turning a corner. Trustpower's 450 staff would be a "huge plus".

"We are at the crossroads, we are starting to mature as a CBD."

Fancy That gift and souvenir shop retailer Bill Campbell said the need for a new parking building had not been created by a growth in retailing but the removal of valuable parking by the council.

The change in parking rules for developers meant the council now had to supply enough parks to meet the needs of Trustpower and the university.

"The real truth is the CBD has lost three times as many people than it is going to gain from these entities because of poor planning by the council," he said.