Warning wait may spook investors

Architecture Van Brandenburg’s proposal for development of the Steamer Basin area. PHOTO:...
Architecture Van Brandenburg’s proposal for development of the Steamer Basin area. PHOTO: ANIMATION RESEARCH
Outgoing Dunedin Mayor Dave Cull says potential investors in the city's waterfront development plan risk being spooked by the long wait for a decision on a Provincial Growth Fund bid.

The city has been waiting for more than a year since the Dunedin City Council submitted a bid to the Ministry of Business, Innovation and Employment - for a sum believed to be $100 million - on behalf of the project's partners.

Dave Cull
Dave Cull
Since then, talks with MBIE and PGF officials have continued behind the scenes but the expected announcement date - originally hoped to be March this year - has slipped repeatedly.

Yesterday, Mr Cull confirmed he had written to the Government to voice his displeasure and ask "what's going on" as the delay continued.

The city had been encouraged to act quickly to get its bid in, by MBIE officials and Regional Economic Development Minister Shane Jones, and had "pulled out all the stops" to do so last year, he said.

Since then, it had "languished" with MBIE officials, although the size of the sum being sought meant it would be "ultimately a Cabinet decision".

"I am frustrated at the length of time it's taken," Mr Cull said.

Repeated attempts by the ODT to seek a meaningful update from MBIE officials had also been unsuccessful over the last year, as its staff preferred to remain tight-lipped about any progress.

Mr Cull said the delays left him worried about the impact on potential investors, from the University of Otago to private parties interested in building a hotel or apartments in the area.

"Well it can't help. We know we've got the university interested, but clearly there's a risk that if there's nothing else going to be there in the foreseeable future, the university ... they don't want to be there on their own.

"We need to have some surety that the project can actually get off the ground.

"Right from the beginning we've had interest from investors in both the hotel and the apartments and in the other buildings. Some of those investors are local and some are international. Clearly the delay would not be giving any of them any confidence."

Funding from the PGF would, if approved, pay for groundworks, building platforms and sea wall upgrades needed to prepare the site for development.

The costs of doing so had always been seen as a major impediment to development of the waterfront, meaning the PGF bid was crucial to the wider project.

A university spokeswoman declined to comment yesterday, as did MBIE staff.

A spokeswoman for Regional Economic Development Minister Shane Jones would only say ministers hoped to be in Dunedin "in the coming weeks to make some positive PGF announcements".

She would not elaborate when asked, saying Mr Jones was overseas, but Dunedin is seeking a range of PGF contributions for projects, including the planned Centre of Digital Excellence (CODE).

In July 2018, $820,000 from the PGF was granted to pay for a feasibility study and business case for the waterfront project.

At the time, Mr Jones praised the project as "iconic and transformational" for the city and unparalleled in scale in New Zealand, but also urged the parties involved to get on with it.

Comments

The Waterfront plan is delusional. This would be another burden around ratepayers necks, only 3-5x worse than the $300m white elephant. Adios Cull, you have increased our debt & rates enough your legacy will be a positive as your predecessor's.

As someone that has just CANCELLED a BUILDING project in the city, it's got nothing to do with more government money being pumped into the city and everything to do with DCC FOCUS, the ability to get things done, the 'PROTECTION racket' called a building industry, ARROGANCE of central GOVERNMENT and the HYSTERIA being generated by the MEDIA.
It does NOT matter how LOW INTEREST are. If the RISKS are too HIGH, only the most resourced, the most removed from the consequences of sticking your head through that FINANCIAL NOOSE, will spend resources contemplating the idea of INVESTMENT.
Expect INCREASING RENTS, GREATER WEALTH DIVIDE and increasing GOVERNMENT OWNERSHIP of OUR CITY.

Prices are going to go down despite a lot of people stating this recession will be different due to demand. There can be all the demand in the world but if there are no dollars to back that up, it's worthless.
There is no way I would look at a building project at present, when I'll buy for 30% below the current value in a couple of years.

That thing looks so tacky.

It's impressive, up there with the Sydney Opera house.
At present there is what making a massive visual statement on the harbour???

 

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