The Sarjeant Gallery reopens on November 9. Photo / Mike Tweed
Whanganui District Council has signed off unbudgeted funding of up to $271,336 to bankroll a cafe at the soon-to-reopen Sarjeant Gallery.
The council had previously put the call out for owners wanting to operate a cafe out of the gallery, with one expressing serious interest.
But they withdrew in February. The council will now own the cafe and hire a contractor to run it.
Nine councillors voted in favour of the funding, with four against.
Council chief executive David Langford told the Chronicle the unbudgeted funding was not a lump sum — it would be used to cover the first year of cafe operations.
“We would also add unbudgeted revenue from the proceeds of the cafe into the budget,” he said.
“The net impact should be a reduction in rates because it will create a profit.”
However, any losses would also fall on the council.
A report from project director Gaye Batty said it was common for a facility to manage its own cafe.
The Auckland Art Gallery and Te Papa do, as well as international art galleries such as the Tate Modern in London.
Council property and open space general manager Sarah O’Hagan said potential operators were “whittled down to one preferred candidate”.
“Some that didn’t proceed didn’t really fit the brief — their offering wasn’t something we wanted and [we] didn’t think it would complement the gallery,” she said.
“One of the primary reasons [they pulled out] was at that time, we were looking for the operator to put up the contribution to do the fit-out.
“There was a significant capital cost.”
Council will fit out the space with funding from the $650,000 furniture, fixtures and equipment (FF&E) budget, which is part of capital expenditure for the Sarjeant redevelopment.
Councillor Jenny Duncan said it was extremely difficult in the hospitality sector and not the time to open a new cafe.
“I believe it’s totally un-prudent of us to take the risk of going ahead with this at this time and putting the risk on our ratepayers.”
Councillor Josh Chandulal-Mackay said the council proposal seemed to be a sustainable model and council needed to give the gallery every chance of success.
“That means there needs to be a cafe,” he said.
“I don’t want to see a gaping hole in the bottom left corner of the Sarjeant Gallery when it opens up.”
Batty’s report says projected gallery visitor numbers are 1260 a week in the first year.
According to hospitality industry specialist First Retail Group, 600 customers a week with an average spend of $20 a head would bring a yearly profit of $165,464.
If the average spend per head is $15, profit drops to $56,264 and at $10 a head, there would be a loss of $52,936.
Councillor Charlotte Melser said as a former hospitality owner-operator (The Citadel), she could confidently say the potential profit figures were “absolutely achievable”.
Councillor Rob Vinsen said the reason the council-led model was being discussed was potential operators did not want to take the risk.
“If there is a need for a cafe there, a commercial operator will take it up,” he said.
“If supporters of the gallery want a cafe there, well, let them fund it. Let them put their volunteers in and man this cafe.”
O’Hagan said the identified operator had a “pretty solid” track record.
“On top of the standard performance and quality measures in any contract, we have confidence in the individual.”
Duncan, Vinsen and councillors Michael Law and Philippa Baker-Hogan voted against the plan, with Melser, Chandulal-Mackay, Whanganui District Mayor Andrew Tripe, Deputy Mayor Helen Craig and councillors Glenda Brown, Peter Oskam, Ross Fallen and Kate Joblin in favour.
Mike Tweed is a multimedia journalist at the Whanganui Chronicle. Since starting in March 2020, he has dabbled in everything from sport to music. At present his focus is local government, primarily the Whanganui District Council.