Rates relief could be investigated to encourage investment in commercial buildings and accommodation in the inner city.

This morning the council's Strategy, Policy, and Finance Committee recommended the Council support the development of options for a rates remission policy and that those options be brought back to elected members later this year or early next year for a decision.

The process would include engagement and consultation with stakeholders including developers, property owners and the Rotorua Chamber of Commerce. The wider public would also be consulted.

Henry Weston, the council's group manager of operations, said there were high vacancy levels in the central city in 2013 before the council's "revitalisation work" started.

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This focused on the environment, the gardens, the roads and footpaths, activations and more recently, security and safety.

"I think we have seen quite a change in the city in that time but we are not there yet," he said.

Weston told the committee "the days of huge retail footprints in the inner city, they're gone really", and that this was the same across New Zealand.

He said there was an opportunity to change some commercial sites to become residential apartments and accommodation.

Weston said the rates remission option arose after discussions with developers and the Rotorua Chamber of Commerce, but it would also be subject to public consultation.

Mayor Steve Chadwick asked if the council knew how many of the central city's buildings had landlords from out of town.

"Because that's the criticism we get, some of them look shabby... but we don't own them."

Rotorua mayor Steve Chadwick. Photo / File
Rotorua mayor Steve Chadwick. Photo / File

Weston did not have that information.

Councillor Rob Kent asked if the council had evidence the remission would work.

Weston said similar policies had worked used elsewhere and the council would study them closely in the next six months.

Councillor Rob Kent. Photo / File
Councillor Rob Kent. Photo / File

"A pilot approach may well be the answer anyway... That will be a decision for the new council."

Chamber of Commerce president John McRae told the committee, "Investment is made on a risk and return basis, so if you have got any changes in the cash flows, it all helps".

He said Rotorua still had assets that needed 25 years of investment and replenishment, but places such as Eat Streat had given Rotorua a sense of pride and business confidence.

McRae felt that projects such as the Lakefront development would continue to do this.

Councillor Karen Hunt said the Night Market and Farmers Market were also innovative examples that brought people to the central city and they didn't cost the council a lot financially.

Karen Hunt outside Te Aka Mauri. Photo / File
Karen Hunt outside Te Aka Mauri. Photo / File

She said the council needed to be bold.

"There have been many projects... that have had their wings clipped and have been less than they could have been because of penny-pinching and small-mindedness."

Councillors Rob Kent and Raj Kumar voted against the recommendation, and councillors Tania Tapsell and Charles Sturt were absent from the meeting.