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Queenstown Lakes Mayor Jim Boult said the massive spend meant a rates increase for the district was ''inevitable'', but the challenge was applying increases fairly.
''The Queenstown Town Centre Masterplan project is an example of where we can target some of the cost of this significant investment to those who benefit most from the work,'' he said.
''We've worked damn hard to make sure we do not overly burden our ratepayers but we also know our ratepayers expect the traffic to get better, water to keep flowing out of taps and community facilities to stay open.
''The reality is that with exponential growth, the delivering of these basic expectations comes with a cost.''
The draft plan proposes an average rates rise of 6.95% for 2018-19 and an average rates increase of 3.5% over the 10-year life of the plan.
The individual rates for each property type would differ.
A new targeted rate was proposed for the Wakatipu ward to help fund the $327.7 million town centre masterplan, to be done in stages between 2019 and 2027.
The rates increase per year would be between 1.4% and 30.3%, the main impact to be felt by properties within the ''wider Queenstown CBD'' where the cost would be between $146 and $777 a year.
Outside the wider CBD, the cost was proposed to be between $34 and $179 per annum.
Another $124.6 million was proposed to be spent on the district's water. This would affect all ratepayers in serviced urban areas, resulting in a proposed rates increase of between 2.1% and 19%.
Those within the Queenstown scheme would be looking at an annual cost of between $123 and $265, while in Wanaka it would be between $430 to $729.
''Every which way you look at this, we have had to play catch-up and we now have to make sure that the level of capital investment gets us back ahead of the game,'' Mr Boult said.
''We have put up an affordable plan, but we are saying clearly and loudly to central Government that our residents cannot continue to sustain the cost of visitor growth.''
The peak day population in 2028 was forecast to be almost 150,000 - that exceeds the present population of Dunedin by more than 20,000.
At present, the ratio of residents to international visitors in the Queenstown Lakes is one to 34. In Auckland the ratio is one to one.
The council will vote, at its meeting in Queenstown on Friday, to put the draft plan out for consultation.
''We have put up a bold plan because we have reached the position that we have no choice but to invest heavily in this district, but our community has a choice and we have clearly outlined the options for each key issue,'' Mr Boult said.
''Our firm hope is that the community will engage on this draft plan and give us informed feedback.''
Subject to approval, public consultation will begin on Monday and close on Friday, April 13.