CBD hotel plans axed

Plans for a new hotel and conference centre for central Tauranga have been dashed.

In early 2013 Tainui Group Holdings Ltd (TGH) was selected by Tauranga City Council as the preferred tenderer for the development of a hotel and conference centre at Durham Street, in the Tauranga CBD.

However, the potential construction of the site is not going to happen.

An independent economic impact assessment, commissioned by Tourism Bay of Plenty and Priority One in December 2012, showed that a $26 million international standard hotel would provide strong economic benefits to the city and sub-region.

The report also highlighted that every dollar of hotel revenue would generate $1.26 of flow-on revenue in the Western Bay of Plenty.

TGH completed their due diligence on the development late last year and have since advised Tauranga City Council that they are unable to proceed with the development at this time.

TGH chief executive Mike Pohio said the decision was financially driven with capital costs well in excess of the $26 million allowed for in the independent economic impact assessment.

"We have an excellent working relationship with Tauranga City Council and they have assisted us every step of the way. This is a business decision which is the result of a need to meet financial criteria for TGH," Mr Pohio said.

Tauranga City Council Mayor Stuart Crosby said Council had started to work with another potential investor on the future development of the site.

"We are confident that a new hotel development in the city centre would provide real and lasting benefits to Tauranga. The hotel development is one of several key infrastructure projects that are being pursued by Council due to their potential to be a springboard for significant investment in Tauranga," he said.