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Dunedin City Holdings Ltd (DCHL) called for expressions of interest for an addition to the Forsyth Barr Stadium footprint at the weekend.
The vision included an internationally branded hotel on site to meet DCHL plans to improve the stadium.
The proposed private commercial venture includes a multistorey car park, a sports bar overlooking the grounds, commercial office space, and a revamp of the stadium entrance, as a package.
It would future-proof the stadium, boost employment and solve the long-standing problem of accommodation in the city, DCHL chairman Keith Cooper said.
But rather than calling for interested developers to present their ideas, the Dunedin City Council-owned company should be targeting developers who could make the plan a reality, Tekapo businessman Anthony Tosswill said.
He said he spent $780,000 in his bid to build a hotel opposite the Dunedin Town Hall about 18 months ago. The process was very badly handled, he said.
He was not aware of the DCHL call for expressions of interest but he slated the approach where developers spend time and money creating a proposal "with more than likely no result".
"No-one’s going to run after them saying ‘Pretty please, do you want to put a hotel there? We’ll do it all for you’," Mr Tosswill said.
"That’s where the problem is.
"It’s totally viable, it’s totally possible, it can happen, but not the way that everybody’s doing it.
"It’s got to happen the other way around, where we’re approached."
But Enterprise Dunedin director John Christie said the vision of augmenting the stadium footprint with multiple, complementary offerings had not been presented as an opportunity before.
And the proximity to the University of Otago and Otago Polytechnic added to the opportunity, as did the prospect of visitor numbers returning to the city.
At present, in a post-Covid world, predicting an "at-capacity number" for the city was more difficult, but the vision was long-term and he believed DCHL and its subsidiaries had "obviously identified an opportunity there".
"We don’t want to be in Covid forever, do we?" Mr Christie said.
"So we do need to look at what those future accommodation needs might look like.
"I think the overall package is quite a different proposition for the city.
"And one that will lend itself well to that particular location."
Otago Motel Association president Alex Greenan said the proposal could increase competition for moteliers, but "the profile of Dunedin would be enhanced".
"It’s a bit of a trade-off from a motelier’s perspective, but I suspect in the long term it’s a win because we’ll get more events in the city."
University of Otago acting vice-chancellor Prof Helen Nicholson said she had not been fully briefed on the proposal and would comment after she had time to consider the details.