The future of Tauranga's CBD finally decided, at a budget

Tauranga City Council has backed the option to lease a new civic administration building from a developer rather than own the building outright.

The council today voted 10-1 to "work with the private sector to deliver a new civic administration building for the council to lease".

Chairwoman of the civic heart project steering group Councillor Gail McIntosh said after today's meeting that there was hardly any difference over 10 years between owning and leasing the building.

This was because the council would pay $22.3 million of the capital costs to cover the fit out along with other costs like IT and organisation transition costs like new working designs and relocation costs.

It would leave the council holding leasehold costs of about $2.5 million a year on developer's costs of $34.6 million.

Today's decision was to adopt the leasehold approach as an amendment to the council's current 2015-25 Long Term Plan.

However the council left the door open by "noting" that the actual approach to procure the building may be altered where additional benefits could be achieved by an alternative arrangement.

Cr McIntosh said the leasehold approach left the council with room on its balance sheet for other expenses. "We have got to have the ability to raise capital expenditure when we need it."

She said the council had not proven itself to be a good building owner in the past. The councillor was referring to years of leaking problems with the old civic buildings that reached a crisis point when a staff member fell ill from inhaling toxic mould growing in his office. The council responding by clearing out affected offices and relocating staff to a leased building in Devonport Rd.

Opposing was Councillor Rick Curach who failed to win support to review the costs to redevelop the newer buildings in the civic complex for staff instead of a new administration building.

Councillor John Robson succeeded by a vote of 6-5 to include the council-owned land in Durham St, next to Baycourt, as a possible location for the new building - expanding on the 91 Willow St location.

Councillor Kelvin Clout opposed, saying it was almost prevaricating and leaving it to the new council. However Mayor Stuart Crosby backed Cr Robson, saying the council needed to leave all options open for the land it owned.

Councillor Steve Morris tried and failed to fund the $4.3 million of open space improvements surrounding the new administrative building from the council's unspent $4.8 million budget for street scape improvements. Mr Crosby said it would raise credibility issues with the private sector because the streetscape improvements were to compliment new developments in the city centre.

The council also clawed back the $2.5 million plan to redevelop Masonic Park into a community space through to the waterfront. Instead the next council will be asked to consider a more modest upgrade centred around relocating the existing carparks, toilets and bus shelters out of the park.

Council also agreed to spend $300,000 to develop a detailed business case for a new museum costing $300,000 which would also include the alternative Cliff Rd site. The business case would underpin an investment proposal for the 2018-28 Long Term Plan.

Councillors agreed unanimously to spend $400,000 developing a business case for a "fit-for-purpose, future-proofed" city library. It would also be considered for the 2018-28 plan.

However the proposal to spend $100,000 developing an indicative business case for a multi-purpose performance centre was lost 6-5. The project would instead be considered as part of the 2018-28 plan.

Councillor Matt Cowley criticised the decision, saying it was dumb because it meant the council would be left holding land in the civic block earmarked for the performance centre when they did not even know whether it would be needed.