Funding from Whangārei ratepayers for an multi million dollar events and conference centre is still a possibility.
Funding from Whangārei ratepayers for an multi million dollar events and conference centre is still a possibility.
A district-wide rates rise is on the cards if the Whangārei District Council decides to fund the proposed $89 million conference centre.
Councillors will discuss two recommendations put forward by WDC staff at an extraordinary meeting this afternoon while the Northland Regional Councillors last week voted for reduced funding, from$14m to $6m.
WDC's Long Term Plan consultation proposed it include $23m towards the Oruku Landing Conference and Events Centre in the 10-year plan, subject to a number of conditions being met, including a commitment of $14m from NRC, and a satisfactory outcome of due diligence investigations.
WDC withdrew funding after NRC approved only $6m and matters arose during the district council's due diligence process that would require further investigation and negotiation.
At their meeting today, one of the recommendations is for WDC to undertake no further action in regards to the project.
If WDC undertakes this option, it may wish to review the option of developing a conference and events centre at Forum North but runs the risk of losing $60m funding the Crown Infrastructure Partners (CIP) has allocated, subject to conditions.
It is understood CIP funding is contingent on construction — defined as being the start of foundation construction as opposed to demolition and site clearance — commencing in September 2022.
The other option is to proceed with the project at pace, commit to funding the next stage up to $1 million for investigation and design work in the knowledge WDC will need to fund up to $57m.
Whangārei District Councillors will discuss which options WDC will take in regards to the events and conference centre funding.
Photo / Michael Cunningham
A district-wide rates increase of 5.5 per cent, based on current project cost estimates and available funding, or an average increase of about 22.3 per cent if sourced solely from commercial ratepayers in central Whangārei, will be required under this option.
The highest increase from a commercial targeted rate would equate to more than $5300 per Separately Used or Inhabited Part of a rating unit (SUIP).
This option will also require WDC to undertake an amendment to its Long Term Plan and to undertake a special consultative process. Timeframes for this are challenging, though.
A draft peer review report of the project's financial viability prepared by Insight Economics strongly recommended WDC not to proceed given its very poor financial viability.
The report said the future value of all revenues is estimated to be between $56m and $72m less than the future value of all capital and operating costs.
WDC is also aware of the potential negative impact on its credit rating from an increased debt of $57m to fund the construction, unless net operating costs assumed to be $4.7m were fully funded.
The council accepts the conference and events centre will not provide a positive direct commercial return, however, it may be a catalyst for economic activity in the form of other developments.
The centre may help support other attractions and provide amenity and recreational value for the district, WDC said.
