An expansion of the role of Rotorua Economic Development has been floated to support the delivery of "transformational place-making projects", including two apartment buildings in the city's CBD.
It follows a Rotorua Lakes Council Strategy, Policy and Finance committee meeting on Thursday morning, which saw the committee make the recommendation to the council, with one abstention.
The move is expected to have "a level of additional funding", according to a report prepared for the meeting, but it remains to be seen exactly how much.
Rotorua Economic Development (RED) is a council-controlled organisation and is also known as Destination Rotorua.
In the report, council district development deputy chief executive Jean-Paul Gaston said the council and RED was working with landowners and developers to influence and support "opportunities for transformational place-making projects" and it had "become obvious the current decision-making structure is not optimal".
"Commercial partners are concerned about confidentiality and decision-making delays if all opportunities must be considered by [the] council.
"New approaches by [the] council must therefore include extending its role to remove barriers and support the private sector to deliver large-scale projects that support inner-city living to positively help transform the CBD."
The change would require an update to RED's statement of intent.
Council officers will produce a report detailing terms of reference prescribing the operational and financial parameters of the extension of RED's powers in the next month.
Two inner-city apartment buildings were among targets from the council's housing plan and the 2012-2031 Long-term Plan.
In the report, Gaston said the delivery of good quality city centre apartments was more complex than conventional housing and likely required the council to "act commercially".
In the meeting, Gaston described the move as a "modest extension" of the purpose of RED.
He said the district required 6000 new homes in the next 10 years and the change would not erode RED's other functions as a regional tourism organisation.
"It is critical we use every part of our organisation to work effectively ... to deliver our housing requirements.
"Unless we bring in more changes … we will not get to the 6000 homes."
The council could have created another council-controlled organisation to do the work but it would cause a delay of 12 to 18 months, he said.
He said delegating the role to a council-controlled organisation meant business could ensure confidentiality, "the ability to make decisions, move with speed and be trusted" and would keep discussions "one step removed" from the council's regulatory functions.
Rotorua Economic Development chairman John McRae said RED would be the "catalyst" to work with the private sector to get private capital into the marketplace and build confidence.
"We're very much against the clock here.
"We don't want to compete with the private sector ... but we certainly want to create confidence.
"When you're an investor the biggest thing that prevents you from making an investment is the feeling of risk.
"That'll actually change the dynamic ... whether someone will make the decision to say, 'yes I'm going to build or no this is too risky'."
Gaston's report concluded that besides Te Arawa, further consultation on the idea was not needed as it arose from direction from the recently-adopted Long-term Plan, which had received wide community consultation,
Councillor Reynold Macpherson said that was "a bit odd" and "potentially undemocratic" and said Te Arawa's entities "could have conflicts of interest".
"It could lead to a perception that non-Te Arawa ratepayers are ... second-class citizens."
That statement was met with a near-collective groan from members around the table.
Mayor Steve Chadwick suggested Macpherson "withdraw and apologise", which Macpherson refused.
Macpherson wanted to ask another question but chairwoman Merepeka Raukawa-Tait did not allow it, prompting Macpherson to attempt to move a motion of no confidence in the chair, which councillor Peter Bentley seconded.
Raukawa-Tait did not accept the motion, saying she did not "tolerate that sort of behaviour".
Macpherson ultimately abstained from the decision to recommend to the council to extend the role of RED.
The committee unanimously recommended to the council to adopt a final Te Oranga Nui - Rāwhiti Mai Eastside Community Wellness Plan, and for council work programmes to align with the plan.
If adopted by the full council, the plan, developed in partnership with the Eastside community and hapū, would report back to the council's Operations and Monitoring Committee annually.
RED's possible extended role
• De-risking inner city development through investment in understanding opportunity and risk.
• Procuring and managing private partners to deliver developments
• Utilising council land to deliver transformative place-making projects
• Administering and utilising the council's underperforming strategic landholdings to ensure they deliver maximum value
Source: Rotorua Lakes Council