Noises about the need for an international-brand hotel in the Tauranga CBD have been sounded for years. Proponents talk of the conference hosting opportunities and how much activity the new opportunities a hotel could bring to the CBD. But the market hasn't been ready, or confident of a making a
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Nine-storey international hotel proposed for Durham St may be 'blocked' by Tauranga City Council staff investigation
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A nine-story international hotel is proposed for 21 Durham St. Graphic / Supplied
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In a meeting on Friday, the council will consider starting a 13-week feasibility study into putting its civic administration building across both sites - potentially with a major bus facility on the ground floor.
The building was depicted as five- to six-storeys with basement parking in a preliminary study by council development partner Willis, Bond and Co.
The study - which also included other options for the land, some with a hotel - was presented to the council behind closed doors in June. It was made public in a workshop last week with cost information redacted.
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Bayleys agent Jim McKinlay represents the group behind the Durham St hotel venture.
The group made a market value offer to buy 21 Durham St in June.
The planned four-star hotel would have 180 rooms, a conference centre, restaurants and bars.
The building would be Kiwi-owned and the business operated by an international hotel brand. He would not name other partners in the venture.
He said it was the only available, suitable CBD land for the development - though anything was possible with enough money.
After years of talk about the need for an international hotel, the market was finally ready, McKinlay said.
Low-interest rates and investment yield expectations alongside high occupancy rates, room rates and tourist spending made the timing right, even with high construction costs.
"Why would the vision of a major CBD hotel be abandoned now that it is finally feasible?"
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The council should put its office building on 41 Durham St and sell 21 Durham St for the hotel, he said.
Brian Berry, chairman of Downtown Tauranga, said he thought the old administration building site on Willow St was the primary option for the new one, and was surprised the council was looking up the hill.
He said a low-rise development could be "a waste" of Durham St, a prime CBD site that could go higher and get almost 360-degree waterfront views.
Tauranga "desperately" needed a quality international hotel and conference centre to attract people to the city and help revitalise the CBD.
Christine Jones, the council's general manager of strategy and growth, said the council was not ruling out any options or committing itself to any construction yet.
It did, however, need to gather information to inform the next council's administration building decision, and the feasibility study would help.
The study would also look at financing, funding and ownership options - and potentially building more space than the council needed so the rest could be rented out.
The council was also investigating ways to consolidate its three staff sites in the short-term but could not, for example, take more leased space in Cameron Rd.
The decision to look at Durham St came from informal elected member discussions last year.
Benefits included space to have all staff working in one place, not having to spend millions on maintenance to keep 91 Willow St "limping along" for another few years and freeing up the Willow St block - the civic campus - for different kinds of public amenities.
A performing arts centre, library, conference centre, open space and museum have all been considered in the past, but none have funding in the next few years.
"It's about looking at the whole civic campus and what to do with it all," Jones said.
Durham St was also one of two top options for a downtown bus interchange and was backed by the Bay of Plenty Regional Council. The other option was privately-owned.
Jones knew of three or four hotel groups looking at the CBD, which indicated multiple location options were available.
Other major new commercial developments were also on the cards. The council was doing due diligence on all approaches and interest in public land.
Developer Peter Cooney of Classic Group was helping one hotel group.
The margin for success to build a new hotel in Tauranga was better than ever before but still extremely tight, given the size of investment needed.
He believed a more central location, closer to the waterfront, would be better than Durham St.
He saw Durham St with a high-end mixed-use commercial development, in which the council could lease space. A bus terminal would not fit that vision.
He said the council could have made a plan for all its civic buildings on the civic campus block this triennium but lacked both "the balls" and the funding.
Mayor Greg Brownless said there had been greater funding priorities this triennium - and arguably still were - but eventually, someone would have to make a decision.
Durham St sites
21 Durham St
- 1554sq m
- rateable value $3.15m
41 Durham St
- 1936sq m site
- rateable value $4.8m
Source: Oneroof
Split council sites burning calories - and cash
Tauranga City Council staff spend 22,000 paid hours a year commuting - mostly walking - between three buildings at a salary cost of $1.01m.
The council's 660 full-time equivalent staff have been split up since the old administration building was evacuated in 2014 after toxic black mould was found.
They work between council-owned 91 Willow St and leased spaces at 306 Cameron Rd and 46 Spring St.
A report, to be presented at a council meeting on Fridayfound the arrangement was lowering productivity, encouraging a "siloed" culture and causing confusion for visitors.
Annual cost of three sites
- Leases $2.01m
- Willow St maintenance $125,000 (average over past four years)
- $2m in Willow St renewals (air conditioning, floors, lifts) planned over next two years
Source: Tauranga City Council