has taken three years, 10 reports and more than $500,000, but
on Thursday the Queenstown Lakes District Council will be
asked to approve a recommendation it forge ahead with its
proposed convention centre on the Lakeview site.
This is despite a private developer being expected to lodge
consent today for a conference centre at Frankton.
The report on the council's proposed convention centre,
prepared by transition manager Paul Speedy, was released
publicly last night.
In it, Mr Speedy said that the proposal for Remarkables Park
developer Alastair Por-ter's convention centre at Frankton -
for which consent is expected to be lodged today - was
''difficult to assess''.
Remarkables Park Ltd had declined or been unable to provide
cost estimates or funding sources in any detail.
It had said it intended to build a centre regardless of the
Queenstown Convention Centre proposal ''but to date there
appears to be little tangible progress''.
Consultants Horwath HTL had said two centres could help
create critical mass for a convention centre market because
of the lack of capacity with current venues.
Mr Speedy said there would be competition in the medium-sized
market but not for international conference activity, largely
because the budget of about $30 million was insufficient to
''meet specifications for international conventions''.
The distance from Queenstown's CBD would also be a drawback
for international conference organisers.
The report's recommendation was for the council to resolve to
approve its convention centre subject to several conditions,
including securing capital funding required in addition to
$32.5 million proposed council contribution.
The report said the Government was ''unlikely'' to agree to
the $20 million contribution proposed in the QLDC funding
strategy. However, the Government might consider ''a visitor
Any shortfall could be met by finding alternative sources of
capital, a visitor levy, establishing the [centre] in stages,
and/or reducing construction costs.
Mr Speedy said there had been ''significant public
consultation'' along with ''extensive wider public debate
through the media'', all of which had demonstrated
However, there was more support than opposition, except over
''A predominance of residents prefer targeted business rates,
while there appears to be a broad level of acceptance of
higher rates by Queenstown businesses.''
There was likely to be ''strong national and international
demand'' for a convention centre in Queenstown; Lakeview was
the ''preferred option''; and financial forecasts indicated
even with ''domestic competition'' the council's centre could
produce ''modest operating surpluses''.
While a business case based on return on equity was ''at best
marginal'', one based on wider economic development was
''It is difficult to think of a single alternative project or
development in the district which could produce the same
level of visitor, GDP or population growth.''
An economic impact analysis noted a convention centre would
add 466 full-time equivalent jobs; result in $9.8 million
being spent annually within the district; add $30.9 million
to the GDP and attract about 29,000 visitors annually,
excluding partners and family of conference delegates.
While risks were significant - particularly if no casino was
included - effective marketing and a ''well-qualified
operator'' would reduce the most obvious financial risks, Mr
A Horwath HTL report considered the council's convention
centre would be ''likely'' to break even by year three and
make a surplus of about $420,000 by year five.
However, these figures ''made no provision for depreciation;
major capital replacement; debt repayment or interest
payments on debt; or a ground rent''.
Mr Speedy said Horwath HTL factored in various matters
including the number and size of conferences and competition
from Remarkables Park.
''The possible scenarios produced year one results ranging
from +$623,000 to -$1.73 million and year five results
ranging from +$2.6 million to -$845,000.''
Other recommendations the councillors would be asked to
consider on Thursday were to amend the long-term plan to
incorporate proposed costs associated with the development;
consider alternative ratings models which include options for
an expanded central business zone and reduced residential
contributions and approve a final ratings funding model; and
approve a preferred operating model.
Council officers would be directed to report back to the
council by July 30 with a draft plan change for the
establishment of a Lakeview sub-zone; a proposed master plan
for the site; and alternative design options for staged or
reduced construction costs.
Officers would be directed to report to the council by
September 30 with alternative ratings options.