The $55 million investment into a project that will see more than 1000 new homes built on Māori land and generate about 300 jobs will be a "much-needed shot in the arm" for Rotorua.
And one local MP says the project itself is testament to the "amazing" things that can be achieved when iwi, local council and central government collaborate.
The funding was announced jointly by Finance Minister Grant Robertson and Infrastructure Minister Shane Jones yesterdayas part of a new package of infrastructure investments, with $3 billion from the Covid Response and Recovery Fund being allocated across the country's regions.
The urban development project, a partnership between Rotorua Lakes Council, Ngāti Whakaue and NZTA is the first shovel-ready project in the Bay of Plenty to be granted funding.
It aims to help facilitate the development of Māori land, provide housing and generate short and long-term employment.
The project involves building roading and stormwater infrastructure to enable housing development for up to 1100 sections, as well as state highway upgrades and stormwater works.
The State Highway 30 (Te Ngae Rd) upgrades are to four intersections at Wharenui Rd, Brent Rd, Basley Rd and airport/Eastgate.
Groundworks are already under way. Design work and consenting is expected to begin for the remaining 900 sections of zoned land and contractors will continue on to the next stage of development.
Ngāti Whakaue Tribal Lands general manager Ray Morrison said the announcement to was some much-needed good news for the people of Rotorua and significant for Ngāti
Whakaue because it provided momentum to support the development of tribal land holdings.
"This supports our commitment to do what we can to ease the housing pressures for our whanau and the Rotorua community.
"This marks the beginning of major infrastructure projects that will provide development opportunities on our land alongside a range of housing solutions that will also generate significant short and long-term employment."
Board member Tamarapa Lloyd said the announcement provided much-needed momentum to the incorporation's aspirations to support whanau into homes.
"Rotorua has been hit hard by the Covid-19 pandemic, alongside all across the country, however our local sectors such as forestry and tourism have been especially impacted.
"We appreciate that this as a hand up, not a handout, and are excited by the opportunities to provide employment, housing and business options for Rotorua and our people.
"We have work to do to understand how this aligns to our long term development plans, and who we need to work alongside to ensure our success."
Ngāti Whakaue kaumātua Monty Morrison said he was "absolutely thrilled" with the announcement.
"Ngāti Whakaue has been working for some time to develop this block of land so this funding is a long time coming and it is great timing.
"The need for housing and jobs in Rotorua has always been a problem and the number of unemployed has been climbing since Covid so this funding will create real opportunities and will be a major shot in the arm for the community."
Morrison said he hoped this project would encourage further collaboration between iwi, local councils and the Government.
"It has been a collective effort to get this across the line and to have it now in our reach is terrific."
Rotorua mayor Steve Chadwick said the news was "phenomenal" for the city.
"We've been chipping away at investment into Te Ngae Rd to future-proof this key corridor and help unlock land for development so this is exciting news.
"It's a big boost towards positive outcomes for our district – it will help stimulate the local economy by providing work and jobs, and will enable progress towards much-needed housing, so it strongly supports Rotorua's Build Back Better economic recovery."
Chadwick said the council had lobbied long and hard for investment in the city's key roading corridors to ease congestion and future-proof the local network.
"During the past few years we have secured more than $100m in government investment in Rotorua, including for a variety of key place-shaping projects and roading.
"This ongoing investment shows confidence in our district and highlights the value of not only having a cohesive vision and direction that we have stuck to but also of our concerted efforts to have genuine relationships and partnerships with central government and key stakeholders like iwi.
"These are key to confidence in our district and what we are trying to achieve."
Waiariki MP Tāmati Coffey said the investment would relieve "burdensome traffic congestion, provide better biking and walking options, create 300 jobs and safer roads for our families, while unlocking much-needed housing for our people out east".
"I'm proud this Government is investing in Rotorua by funding the necessary adjustments along Te Ngae Rd and opening up the potential for housing on Rotorua's Eastside.
"I hope Rotorua locals appreciate the importance of the partnership between Te Arawa, the council and Government, to get things moving for Rotorua.
"Together, we are capable of amazing things, and I am committed to this partnership's future."
Under Secretary for Regional Economic Development Fletcher Tabuteau said now more than ever, it was important to invest in the regions.
"I'm proud to be part of a coalition Government that is supporting economic recovery and creating jobs through the Provincial Growth Fund.
"[Yesterday's] $55m for the Bay of Plenty from the $3b infrastructure fund to unlocking urban land development (Wharenui Rd and SH30) (Rotorua Lakes District Council and NZTA) project is a result of hard work and advocacy for Rotorua."
Other Rotorua shovel-ready projects put forward for funding
Rotorua wastewater treatment plant upgrade
Currently part of the council's 2018-2028 Long Term Plan. The application to CIP relates to treatment plant upgrade only, not discharge.
Total estimated cost $60m-$65m. Minimum 50 jobs created over a two-year period.
Comprehensive hangar park and industrial/business park
The hangar park can be used for a variety of aviation purposes as well as light industry type activities, such as storage. Seeking $8.6m (50 per cent of the total cost). Estimated 200-300 jobs.
The industrial/business park will help the airport to leverage value from its unused land and diversify its revenue. Seeking $13.35m (50 per cent of the total cost) to enable currently halted project to continue. Estimated 150-200 jobs.
This project would see Rotoehu communities connected to the new East Rotoiti/Rotoma network. Estimated total cost $10m - currently has no confirmed funding. Estimated 15 jobs per year for about two years.
Rotorua Aquatic Centre
Aquatic Centre improvements were included in the council's 2018-28 Long-term Plan, with $7.5m committed to improve the 50m outdoor pool and for key refurbishments required to support proposed further developments.
Additional funding was to be sought externally for further proposed developments at a total estimated cost of $15.43m. Estimated 80 jobs.
Whakarewarewa forest and trail development
This proposed project would be an extension of the $14.5m Whakarewarewa Forest redevelopments. The proposed project has a total estimated cost of $13.9m and includes construction of commercial buildings at Forest Hub 2 near Tikitapu (Blue Lake).
Estimated 85-100 jobs for a minimum of 12 months with the potential for about 40 or more once occupied.
An extension of the currently proposed $40m lakefront redevelopment.
Extra funding - $17.2m - has been sought for construction of commercial buildings, high-quality jetties and development of Ohinemutu Village. Estimated 28 jobs, with potential for more once completed (estimated at 54 jobs).
A joint submission with Te Puni Kokiri, this project will accelerate the Kaingaroa Village community development plan by providing capital funding to construct and install infrastructure and facilities.
$4.9m was sought for the $14m project. Estimated 100 jobs during construction, 20 ongoing and potential for more for small businesses.