City council proposes extra funding and a loan for CBD precinct project

An artist’s impression of Invercargill’s proposed new CBD precinct. Because of the economic...
An artist’s impression of Invercargill’s proposed new CBD precinct. Because of the economic impact of Covid-19, the cost for the project has increased from $165million to $180million. IMAGE: SUPPLIED
A request for more money to complete Invercargill’s multimillion-dollar city centre development has not come as a surprise to the city’s ratepayers’ association.

Last week, the council released a consultation document outlining a proposal to invest a further $7.5million in the development and provide a $22.5million short-term loan for the project in light of a shortage of funding.

In 2020, the council agreed to invest up to $46million to support the first three stages of the project. The entire project was budgeted to cost $165million, but the cost has now increased to $180million.

Council chief executive Clare Hadley said while the project had been on time and budget, the economic impacts of Covid-19, construction and supply chain uncertainty, increased costs and limitations in bank funding for the development stage meant further investment and loan funding was required.

‘‘Everyone is eager to see this development come to fruition.

‘‘While there are always challenges in big important projects like this, we are confident of a positive outcome.’’

Developer Scott O’Donnell would match the investment if the money was approved, the consultation document stated.

The investment in the city block would increase council debt by $30million, but would not have any effect on rates.

Invercargill Ratepayers Association spokeswoman Kathy Morrison said she was not surprised by the proposal.

‘‘We knew this would happen ... Since the beginning, the whole thing — it was going to blow up, you just knew it was.’’

Many ratepayers were excited by the ‘‘huge monstrosity’’, and since the city had committed to it, there was not much else that could be done, she said.

‘‘I don’t see any options — once you embark on that, you need to keep going through it.’’

Consultation on the proposal closes on February 11 and hearings are planned the next week.

The council has also proposed investing an extra $13.3million in its upgrades aiming to create more vibrancy and connection between Don, Kelvin and Esk Sts.

The boost for that project, which was initially allocated about $20million, would mean a 1.3% rates increase.

-- luisa.girao@odt.co.nz

 

Add a Comment

 

Advertisement

Our journalists are your neighbours

We are the South's eyes and ears in crucial council meetings, at court hearings, on the sidelines of sporting events and on the frontline of breaking news.

As our region faces uncharted waters in the wake of a global pandemic, Otago Daily Times continues to bring you local stories that matter.

We employ local journalists and photographers to tell your stories, as other outlets cut local coverage in favour of stories told out of Auckland, Wellington and Christchurch.

You can help us continue to bring you local news you can trust by becoming a supporter.

Become a Supporter