It would cost Rotorua Lakes Council at least $1.4 million to pull out of the Lakefront development, on top of significant reputational damage.

That's what the Operations and Monitoring Committee was told at this week's meeting.

Group strategy manager Jean-Paul Gaston was asked about the costs of backing out on the project after Rotorua District Residents and Ratepayers council candidates vowed to reconsider the investment if voted in after this year's election.

The project includes removal of the Soundshell, enhanced landscaping, an interactive sculptural park, lake edge improvements including a boulevard-style pathway, roading changes, and upgraded public toilets.


It also includes a building site or sites where investors could establish restaurants, cafes, kiosks and ticketing offices.

Conceptual impression of the Rotorua Lakefront development. Image / Supplied
Conceptual impression of the Rotorua Lakefront development. Image / Supplied

The council has allocated $20m to the revamp and has received matching funds from central Government's Provincial Growth Fund to enable the project to be completed over the next three years.

At Thursday's meeting, Rotorua mayor Steve Chadwick said: "The vow to review the Lakefront is an absolute red rag to a bull.

"How on earth could we undo something that ... we all agreed on after going out for consultation?"

She said it was "pure madness" to "look a gift horse of $20m plus the costs of a business case, in the mouth".

Gaston said if the council was to withdraw from its Lakefront contracts, it would have to initially return $400,000, and "then for the subsequent phases easily over $1m".

"The actual reputational damage would be significant and we do have a number of other funding applications with Government pending ... This would be a significant deviation within our financial strategy."

Councillor Rob Kent was the only councillor who voted against the Long-term Plan and the Lakefront development within it.


"Now I'm totally in favour of the Lakefront development ... Those councillors who are publicly stating they are against the development ... why didn't they say so at the time?"

Councillor Raj Kumar said councillors were "getting anti about something that's out of our control".

"At the moment nobody is pulling out of the deal ... we don't even know who's going to come in after the election."

However, councillor Karen Hunt said the ratepayers' association was "trying to sow seeds of discontent".

"I hope our community is smart enough to see it for what it is ... We are going to build this project. I assure the community of that."

Councillor Trevor Maxwell then said making the most of the Provincial Growth Fund money was a "no-brainer".

The committee passed a motion that the council was "100 per cent behind the project" to give reassurance and confidence to the business and contracting communities.

Ratepayers' association candidates Peter Bentley, Peter Jones, Conan O'Brien and Reynold Macpherson all said they stood by their calls for the Lakefront development to be reconsidered, despite the costs involved in pulling out.