$100m hotel plan for city

A massive $100 million building is proposed for council-owned land in Tauranga's downtown after plans for an international hotel escalated into a combined hotel and commercial office development.

Mayor Stuart Crosby announced that negotiations between the council and Tainui Holdings, the Waikato iwi's investment arm, had seen a substantial high-end office development added to the original plans for a $40 million hotel.

The council's ambitions for the block of land on Durham St are now only a week away from a firm direction being given on whether the project went ahead.

Tainui Holdings and its hotel operator partner, Accor group, had until July 17 to carry out due diligence and had kept the council abreast of progress.

Mr Crosby said the much larger project had been driven by the opportunity that the income from office leases would cover potential losses from the hotel: "Hotels are notorious for not making profits in their early years."

He also said the council intended to go out to the market on July 30 to seek expressions of interest for the development of its 4400sq m site tucked in behind Devonport Rd and Elizabeth St, behind the Inland Revenue building.

The land, mostly used for a carpark, had attracted renewed interest from two developers and the council wanted to test the market. Mr Crosby said the developers did not include Paul Bowker, whose plans for a landmark 15-storey apartment and office building failed to go unconditional when the recession hit in 2008.

Developers' interest in the city centre had strengthened. "And let's face it, the downtown needs an injection of people."

The other big property deal in the funding melting pot was the plan to develop a university campus in Durham St, on council-owned, off-street carparks opposite the former Bay of Plenty Times building. The newspaper has shifted to premises on the corner of 7th Ave and Cameron Rd.

Tainui Holdings chief executive Mike Pohio was not available for comment yesterday.

A four and a-half star Novotel-branded conference hotel was proposed to be built opposite Baycourt. Novotel hotels typically have 150 to 200 rooms.

Mr Crosby said Tainui Holdings needed to do the due diligence and business case to ensure there was a return on the investment. Agreement might trigger construction of a third downtown carparking building, possibly on the Harington St carpark: "These are some of the dynamics currently being thrown around."

Tainui briefed the council two weeks ago about progress on the project. The council will receive a confidential verbal report from chief executive Garry Poole tomorrow, with a full report on the negotiations' status on July 30. Mr Crosby said Tainui's update traversed a range of issues the council needed to address.

Tauranga downtown's emerging skyline

Recent Additions

$30m ANZ Building on the corner of Cameron Rd & Elizabeth St

$14m Sharpe Tudhope Building on the corner of Devonport Rd & 1st Ave

$21m police station, Monmouth St

Planned Additions

$1m-plus three-story retail and office building on The Strand's Grumpy Mole site

$10m office building on the corner of Willow St & Harington St

$30m TrustPower head office

$67m tertiary and research campus

$100m international hotel and office development

- Bay of Plenty Times

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