The completion date of a $12 million CBD streetscape project has been pushed out by more than a year - stinging ratepayers and prompting a call for pressure to be applied to get the job done.
The council-led streetscaping project on Elizabeth St was supposed to be completed in December last year but Covid delays have pushed out the completion date, forcing the council to dip into a contingency fund.
The streetscape project is happening alongside the $200m redevelopment of the former Farmers building - now named Thirty Eight Elizabeth - on the corner of Elizabeth St and Devonport Rd that began in 2018.
The project is among 20 key developments included in the Tauranga CBD Blueprint released last week, highlighting $1.5 billion worth of investment from the private sector into the city by 2030.
At the council's Strategy, Finance and Risk Committee meeting this week Tauranga City Commission chairwoman Anne Tolley asked when the council was "going to put the pressure on" to finish the streetscape work.
"Our ratepayers are paying for it, and our businesses are suffering.
"This is going to be a big issue for us, with the amount of construction that's been planned over the next eight or nine years.
"We need to be aware that there are huge costs to our businesses that are trying to operate, and have been pretty loyal to the city centre of Tauranga."
Tolley said there might need to be some sort of "bond" given to developers so that when there were delays, "ratepayers aren't picking up the tab for it because I don't think it's fair".
"They shouldn't have to pay for other people's delays."
Smiths Sports Shoes owner Bruce Trebilco has been doing business on the corner of Elizabeth St and Grey St for more than 20 years.
"We're over it," he said.
"The sooner we get this area cleaned up the better."
Trebilco said foot traffic had declined since the earthquake-strengthening works started in the area a few years ago.
"We have dropped probably 20 per cent from our peak turnover four years ago."
Trebilco said while Covid-19 had also contributed to the drop, the streetscaping project did not help.
The council's general manager of central city development, Gareth Wallis, said its streetscape project was always timed to be finished in line with the Thirty Eight Elizabeth development.
Wallis said the two projects had the same construction partner so they could be closely co-ordinated but overlapping site boundaries meant delays in one project would inevitably affect the other.
The streetscape work was supposed to be finished by December but Covid-19 impacts had pushed the completion date to 2023, he said.
"When the budget was set for this project in May 2020 we were not expecting the Covid-19 pandemic to have the impact that it has had."
National and global lockdowns, border closures and public health measures heavily impacted the available workforce and supply of materials, he said.
"Project delays have flow-on budget implications."
The $12,130,561 for the streetscape project was made up of four budgets: wastewater renewals, water renewals, stormwater quality improvements and streetscape upgrade.
"As of the end of March 2022, we are tracking to stay within the total budget."
But Wallis said a contingency budget set in May 2020 did not account sufficiently for the combined and sustained impacts of Covid-19.
Earlier this year, the Elizabeth St upgrade project team requested an additional $575,000 in contingency funding to ensure the project could be delivered as planned.
Of that, $111,000 has been allocated but should be offset by an anticipated underspend in the wastewater and water budgets, Wallis said.
"Our priority has been, and continues to be, ensuring ratepayers do not bear the burden of any additional costs as a result of project delays that have been outside of our and the developer's control."
Wallis said given the amount of planned development, Tolley asked staff to consider ways the council could work with developers on realistic construction timeframes to reduce impacts on businesses and ratepayers.
"In the short- to medium-term, it is likely that construction timeframes will continue to be significantly impacted by shortages and delays associated with the supply of materials."
Wallis said Thirty Eight Elizabeth was a game-changer for the city centre and helped lead its revitalisation.
Thirty Eight Elizabeth developers and their contractor are working as hard as possible to finish the project, he said.
About 7000sq m of retail space at Thirty Eight Elizabeth - including Farmers, Whitcoulls and Pascoes retail stores - officially opened in early February.
The townhouses and apartments would be available to buy in the first quarter of this year.
Thirty Eight Elizabeth project manager Brett Nicholls said the development was its highest priority.
"We remain steadfast in our commitment to bring it to fruition as soon as possible. We are all aware of the effects of Covid on supply chains and labour and this project hasn't been immune."
Within the next few weeks, the food and beverage terrace would be opening with a deli, bar and restaurant Picnicka.
"Thirty Eight Elizabeth is our massive show of faith in Tauranga CBD - a $200m-plus investment that is a game-changer and we are excited about the transformational effect it will have."
Tauranga Business Chamber spokeswoman Anne Pankhurst said the city has been disadvantaged for quite some time, by either demolition or construction.
"While Covid has had an impact, we have all looked forward to the Farmers building being completed and beginning what some would say is the vanguard of the CBD redevelopment."
The development was critical in the long-term revival of the CBD, she said.
"It sends a message that the CBD is at the top of the hierarchy and the place to be if you are in retail or commercial activity."
Pankhurst said a "bond" for developers was an interesting concept and one that felt like it had arisen out of frustration.
"Developers are facing a number of challenges, including supply chain and workforce issues, and adding another hurdle such as the bond (which is presumed to sit with council) would or could scare them off.
"We need investment into the city centre right now, which means developers need support, not added costs."
Additional reporting - Talia Parker
Elizabeth St streetscape project timeline
Stage 1: Works on First Ave, Devonport Rd and around the Grey St roundabout.
Expected completion date: June.
Stage 2: The "linear park" on Elizabeth St outside the main entrance to Farmers.
Expected completion date: The first half to be completed in June.
Construction of the remainder of the linear park will start once the semi-permanent crane on Elizabeth St and scaffolding have been removed, and the site is made available for the streetscape works to continue in 2023.
The remaining streetscape works were projected to take another four months to complete.