Whangārei ratepayers are facing a new 6 per cent rates rise from July next year as the Whangārei District Council moves to put $57 million towards building the controversial $123.2-million town basin Oruku Landing conference and events centre development.
The Whangārei District Council (WDC) Oruku rates proposal comes in addition to the council's already-adopted 4.5 per cent general rates increase for the year, meaning a total 10.5 per cent rates hike from July.
The publicly funded 1000-person conference and events centre is promoted by private developers Northland Development Corporation (NDC) as essential to the success of its $250 million Oruku Landing development – a five-storey, 135-bed hotel, a separate 20-apartment building, shops/bars and other facilities across the equivalent of 1.3 rugby fields of Riverside Drive town basin land. Also proposed is a ferry terminal and link to the city centre via a controversial new $20-million, shared-path footbridge across the Hatea River.
WDC formally decided at an extraordinary council meeting on Thursday to go ahead with the public consultation required to potentially add the Oruku centre spending into the next decade's budget, through an amendment to its 2021-2031 Long-Term Plan.
The effects of the one-off increase next year will go on to create significant extra consequences for ratepayers throughout the remainder of the council's 2021-2031 Long-Term Plan.
The amount of money they will need to pay annually over this time will be amplified in ever-increasing steps by the presence of the Oruku rates hike.
Going ahead with the centre will also commit WDC ratepayers to underwriting project cost overruns for a facility that does not yet have final detailed costings.
Former WDC councillor and Whangārei resident Robin Lieffering has hit out at the potential new council spending.
Lieffering, Whangārei's Positive Ageing Advisory Group chairman, said the extra 6 per cent Oruku rates rise would be particularly hard on beneficiaries, including superannuitants.
However, NDC owner-director Barry Trass said he could understand the rates rise would challenge some in Whangārei.
"But we have got to look past the short-term pain of a rates increase," Trass said.
He said the $250 million Oruku Landing development was an exciting opportunity with great potential to lift Whangārei.
The $123.3 million Whangārei District Council (WDC) conference and events centre will be funded by $60 million from the Government, $6 million from the Northland Regional Council (NRC) – and potentially, $57 million from WDC.
WDC would buy the land for the centre back from the developer for $10 million.
WDC group manager, infrastructure and services Simon Weston, said engineering costing work had indicated some cost components, which were not yet properly understood, could increase by 50 per cent, others by 30 per cent.
The WDC conference centre revisit comes in spite of the council earlier this year walking away from putting aside $23 million towards the centre in its 2021-2031 Long-Term Plan.
"We've been presented by the Government with an opportunity for investment in our community," Sheryl Mai, Whangārei's Mayor, said following Thursday's council meeting.
Mai has previously publicly expressed her reservations about the centre development including the need for the facility, the impact of Covid-19 and its location. But she said as Mayor in a democratic system, she would consider all feedback, even when it differed from her own.
WDC is currently looking at how to reduce costs for the conference centre build, but is only about 60 per cent of the way through this process.
Weston said normal procedure was for the council to be 100 per cent of the way through this "value engineering" process before making final decisions.
But this had not been possible, given the timeframes the council was working under in order to make its decision about the centre in time for the December 1 deadline for getting the Government's $60 million for the project, should the decision be made to proceed.
Trass said resource consenting for the five-storey, 135-bed hotel and 20-apartment development on the site was already being processed through the Government's fast-tracking, where it, rather than the local councils concerned, helmed this process.
He said the resource consents had been with the Ministry of Business Innovation and Employment for several months.
Trass said hotel company Accor was still interested in building the hotel, in spite of Covid-19. There were constant calls coming in from people wanting to host large conferences and events in the facility –even throughout the current Covid-19 lockdowns.
He said the hotel development would not proceed if ratepayers and the council voted against paying towards the conference centre. But that would not stop the developers.
There was potential for major expansion of the existing 20 apartments which could quadruple in number to 80.
WDC ratepayers have already had a 7 per cent WDC rates increase this year.