Government help: Prime Minister John Key has suggested the Government could pay $10 million towards Queenstown's conference centre
A conference centre will cost much more than first anticipated but have major spinoffs for Queenstown, a report reveals.
Previous estimates ranged from $20 million to $30m but a new feasibility study estimates a 750-delegate centre will cost a whopping $43.7m.
The study draft, leaked to Mountain Scene, was commissioned by a Queenstown council-appointed working party.
It suggests the Government should be hit up for $20m, council for $17.5m and Otago and Southland regional councils for $2.5m with the balance from private and community funding.
Any land cost is not included.
It’s understood Prime Minister John Key has suggested the Government could stump up $10m.
The $43.7m question – who pays?
$20m from Government
$17.5m from Queenstown Lakes District Council
$2.5m from Otago and Southland regional councils
$1.7m private sector funding for fixtures, fittings and equipment
$1m private sector naming rights/sponsorship
$1m community funding
* from consultants Horwath HTL and WT Partnership report
The purpose of the feasibility study – by three consultancies – was to gauge demand for a large stand-alone conference centre.
The consultants conclude a specialist centre will play a major role in filling local hotels in off-peak and shoulder seasons without any need for more accommodation.
“Outside the peak seasons, there is sufficient capacity to absorb the accommodation requirement of at least one 750-delegate conference each night,” the consultants say.
By its third year they expect the centre will host 156 events including 10 conferences of 500 to 800 delegates and 14 with 250 to 500 delegates.
The report is confident it will attract new business to town.
“There is significant evidence to the effect Queenstown misses out on a substantial amount of conference activity simply because of the lack of suitable facilities,” it states.
Millennium Hotel Queenstown, now the resort’s largest facility, can cater for 550, “however there are reasonably significant constraints once a conference goes above 250 delegates”.
The consultants suggest a centre will pull in $26.4m a year in direct visitor spending in its first five years. At least 25 per cent of visitors will be higher-spending overseas delegates.
The consultants are confident Queenstown Airport will handle demand for conference-goers.
However, they say it will help if airlines use consented night flying hours to make it easier for late-afternoon departures from Australia.
Using international guidelines, the report suggests the centre should be a single-level 5335sq m building with a 1500sq m exhibition hall, 750sq m plenary hall or auditorium and 900sq m in breakout rooms.
The total land requirement, including parking and access ways, is about 12,500sq m.
The authors suggest in the first year the centre will pay $200,000 in rates to the Queenstown council, $450,000 in energy and utility costs, $750,000 in salaries and wages and $350,000, excluding staff, in sales and marketing costs.
It’s assumed the venue’s hire charge will be $18,000 plus GST.
By the third year it could break even in terms of cashflow.
The centre’s key strengths, the report says, will be attracting high-yielding visitors who mightn’t otherwise come, that the conference market’s high period of demand corresponds with low and shoulder seasons, and tourist seasonality will be reduced, enabling more Kiwis to get full-time jobs.
The authors break down the $43.7m capital cost into $30.5m for construction, $5.150m for fixtures, fittings and equipment, $4.635m in professional fees, $891,000 for consents, $400,000 for network user charges and $2.124m in project contingency.
The consultants who wrote the report – which cost the Queenstown council $52,000 – are accounting firm WHK, hotel and tourism specialists Horwath HTL and construction-cost consultancy WT Partnership.
It doesn’t recommend a site.
However, the working party has a shortlist of four – the Gardens ice rick, council-owned Gorge Road carpark and Stanley Street land and a privately-owned Man St email@example.com
New Council Building-Why in Central Queenstown?
What about the council moving out to a purpose built building the Frankton Industrial Estate and realising the equity in the current building? They could have a small office in town for walk in enquires. It would be more cost effective and allow plenty of room for staff car parking and most of all it would be cost effective for ratepayers rather than building or leasing in Central Queenstown. They could also add on a satellite library for residents in Frankton ,Lake Hays area. Makes sense, that’s probably why our council will move ahead with it.
21 Jul 2012 03:22PMpcleisure
Pick up the rubbish
Why is our council wasting our money on this sort of pie in the sky stuff,unless of course they plan to tag on an lovely office block for themselves.They can not be trusted.
19 Jul 2012 08:13PMpcleisure
A Shallow Silly Idea
At a time when councils throughout NZ are being told to curb their expenditure the proposal that a community of 17,000 people should take on building and operating a $42 million conference centre is cloud cuckoo-land stuff.
Oh - and we'd have to provide the land on top of that.
If the concept stacks up the Hilton et al will do it themselves. But even Auckland can't afford a convention centre and Sky City won't build one without a sweetened deal.
Please let Queenstown be what it is - an exquisite uncrowded place of alpine beauty. Its already known around the world as one of the places to visit.
15 Jul 2012 08:11PMKen
Yep suggest if hotels and businesses want a big conference centre they should payfor it rather than ratepayers
13 Jul 2012 04:02PMBC
43 million, and land cost is not even included, so this report aint worth didly right not, is it?
Same is true as it was before - why have companies with a vested interest not stumped up the cash already?
13 Jul 2012 01:54AMkernow
''By its third year they expect the centre will host 156 events including 10 conferences of 500 to 800 delegates and 14 with 250 to 500 delegates.''
156, perfectly divisible by three.
Would love to see the thorough workings out of whoever plucked that number out of their buttcrack.
13 Jul 2012 01:51AMkernow
yep if john is offering 10mill
12 Jul 2012 08:30PMkurt
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