Business Hawke's Bay is winding up, saying it has been unable to secure sustainable funding amid a review of its future by Hawke's Bay councils.
Last month all five councils in the region began reviewing future economic development models, following a report which recommended the development of a new regional economic development agency in partnership with Māori.
Chairman Stu McLauchlan said today the decision to close BHB's doors was a tough one.
The organisation would work with the region's councils to try to get as many of its programmes and assets - such as Business Hubs - transitioned into a new regional economic development organisation when established, he said.
"We are disappointed that we won't be playing a part in the future economic development of our region."
McLauchlan said the date of the wind up would be negotiated with the councils, and discussions with them would commence shortly.
"We are grateful for the opportunity to work with councils and explore redeployment opportunities to ensure that BHB's good work survives into the future and can be of value to the business community by transitioning to a new fully funded regional economic development agency," he said.
"That's our focus. We are looking forward to the establishment of a new regional economic development agency with sufficient money, mana and mandate to serve the businesses of Hawke's Bay, and the wider community."
Napier MP and Economic and Regional Development Minister Stuart Nash said he always thought Business Hawke's Bay was underfunded despite the admirable job they did under trying circumstances.
"I think there was perhaps a little bit of confusion [on BHB's part] around the level of accountability and responsibility, and transparency that is required at a governance level when councils put ratepayers money into any sort of venture," he said.
"I think what will come out of this is an economic development agency that is stronger, has greater support from key stakeholders, is well funded, and will that drives the sort of growth that we need for the Bay."
Nash said while it is important that a new agency still has operational autonomy from the councils, they must also have governance oversight of some level.
"What I would envisage is that any new structure set up that is funded through ratepayers' money, that representatives from the councils do sit on the board," he said, adding that representation from the private sector, iwi and local stakeholders are also crucial.
"Have it well funded, have it supported by everyone, and if we do that, we'll start seeing the sort of results that a region like the Bay deserves."
Nash said he thinks Hawke's Bay's economy needs to become more diverse, even though it has held up well through Covid uncertainty.
"We are really dependent on a number of variables that are outside of our control like the weather, exchange rates, commodity prices, and so far we've been lucky.'
A joint press release from leaders of the five Hawke's Bay councils on Thursday said they were heartened to hear BHB was committed to working constructively with them over the transition period, and thanked the organisation for the work it has done over the years.
Matariki, which is the Hawke's Bay regional development strategy and partnership across central and local government, iwi and hapū and the private sector also acknowledged the work of the agency.
"BHB has been one of our important partners in the inception, development and success of our Matariki economic strategy.
"But now it's time for the next step in the evolution of our highly collaborative approach to economic development," Matariki Governance Group co-chair, Central Hawke's Bay Mayor Alex Walker, said.
"Matariki has successfully built partnerships and collaboration in Hawke's Bay and now is the time to advance this into a co-designed agency, to drive socially inclusive economic success for all," said co-chair Leon Symes.
BHB currently employs a team of six, three involved in management and activation of the Hawke's Bay Business Hubs, two managing projects and sector programmes, and its chief executive Carolyn Neville.