Tauranga rates will increase by $65 a year if the council decides to press ahead with plans to build a new civic office building in the downtown.

The rates rise was signalled in documents presented to councillors yesterday during a meeting where the most significant issue was an unsuccessful bid to cut nearly $4.3 million from proposed loan raising of $68.6 million.

The project including landscaping would cost each ratepayer about $23 in 2019-20, rising to $65 in 2020-21.

Mayor Stuart Crosby chaired the meeting and his casting vote was needed to defeat a bid to cut nearly $4.3 million out of the project's capital costs.


Councillor Steve Morris wanted to tap into unspent money tagged for street beautification to help lure commercial investment into the CBD.

When Councillor Bill Grainger abstained from voting on the issue, it opened the way for Mr Crosby to resolve the 5-5 deadlock.

The council has agreed to go out for public consultation on a series of projects with the capacity to create a new civic heart.

With about 400 council staff currently spread around several buildings in the downtown because of dampness and toxic mould problems in most civic buildings, the council wanted to make a new administration building its first priority, along with the creation of open areas from the demolition of the old civic buildings, and to turn Masonic Park into a civic square.

Yesterday's meeting did not commit itself to how the new building would be funded. Options include the council raising the loans and owning the building, or leasing the building.

However, the financial implications set out in public consultation documents were based on the assumption that it would be built and owned by the council.

Barring major public resistance to changing the 2015-25 Long Term Plan, the building would open in 2020. Operating costs would total nearly $7.8 million a year - $5 million more than the operating budget for the current buildings.

Mr Morris argued that the council could use the $4.2 million of unspent money earmarked for streetscape improvements to fund construction of the building's surrounding open spaces.

He said there had been a great deal of enthusiasm among councillors in 2014 to make each dollar travel as far as it could. Mr Crosby said the money was an incentive to support private sector investment in the public realm. The council was thinking about putting some of the money into the tertiary campus project in Durham St.

Private sector investors would feel they had been misled if the transfer took place.

Councillor Kelvin Clout said the CBD extended beyond the civic campus and the council needed to support the private sector in the CBD.

Councillor Leanne Brown said the money had not been committed to anything. Councillor John Robson said it was spending public money on a public area that could be considered as streetscape. There was no evidence of anything that would require that sort of money.

Supporting Cr Morris were Crs Brown, Rick Curach, Robson and Catherine Stewart. Opposing were Mr Crosby and councillors Clout, Matt Cowley, Bev Edlin and Gail McIntosh.

Mr Crosby defended criticism from Cr Morris that the current council was facing the "cold hard reality" of no investment in civic buildings with design flaws.

He said the current council had not experienced the costs of a natural disaster that added costs of $100 million to the balance sheet or problems caused by the global financial crisis.

He said when it was a choice of investment in infrastructure or on a council building, the choice was obvious. The fact the civic building were not healthy was not known until 2014.

What people will be asked to comment on:

• $64.3 million council administration building
• $4.28 million open space plaza surrounding the building.
• $2.5 million to convert Masonic Park into a civic square.
• $100,000 feasibility study for a new museum.
• $200,000 feasibility study into libraries and the future of the City Library.
• $100,000 feasibility study into a 1000-1200 seat performance venue.