Some Queenstown business owners are turning against a council-backed convention centre, worried about the long-term costs.
Originally billed by the Queenstown Lakes District Council as a $52.5 million project, in terms of capital costs, fresh figures released last Thursday put the capital cost at $60 million.
The figure lifts to $69.2 million when infrastructure costs, a commercial subdivision at the Lakeview site, overlooking the town, and the first five years of deficits are added.
The extra cost is interest on a 50-year loan, totalling $74 million.
That total of more than $140 million – before any commercial return to the council from its Lakeview subdivision – is making some businesspeople reconsider.
Central Queenstown commercial ratepayers and accommodation businesses are bracing for huge rates hikes in the coming years to pay for the centre and a $22.3 million sewerage system upgrade.
Queenstown Chamber of Commerce chief executive Ann Lockhart said the chamber would formally ask the council in its submission to the latest 10-year-plan to explore other funding mechanisms to minimise the impact on ratepayers.
That could mean a bed tax.
Restaurateur Grant Hattaway – who owns Pier 19, Captains Restaurant and Blue Kanu – said: ”It does make me think again with those figures put on the table, but I am for the convention centre.”
The town struggled to host conferences of 100 people and Queenstown was losing business to other centres, he said.
”We do have to do something.”
Frankton developer Remarkables Park, headed by Alastair Porter and his brothers, plans its own convention centre – at no cost to the ratepayer – which is an attractive option to some.
Language Schools New Zealand owner Guy Hughes said the town should have a convention centre.
But he backed a Frankton centre, because of the debt burden on ratepayers.
”It would be nice if it was in town … I say with all my heart thank you to the Porters for creating a facility for the community.”
He was also uncomfortable about requiring residential ratepayers to chip in for the centre when there were other essential council services, like roads, which needed attention.
The latest figures, released at a closed-door Destination Queenstown meeting on Thursday, were obtained by the Otago Daily Times.
They showed the council is still banking on a $20 million injection from the Government.
Clutha Southland MP Todd Barclay said there had been discussions between the council and the Ministry of Business, Innovation and Employment.
Economic Development Minister Steven Joyce was expected to make a case to Finance Minister Bill English for a government grant, to be included in next month’s Budget.
”In terms of the likelihood of there being anything in the Budget, I’m not sure – you’ll have to ask Bill English. But I’m certainly lobbying quite hard for consideration to be given to their request,” Mr Barclay said.
In 2013, the council asked the Minister of Tourism, Prime Minister John Key, for $20 million of government funding, but last year Mr Key said the Government would consider contributing between $5 million and $10 million, depending on a satisfactory business case.
Mr Joyce’s press secretary, Serene Ambler, said discussions were ongoing with the council.
Queenstown Lakes Mayor Vanessa van Uden did not respond by publication deadline yesterday.
QLDC chief financial officer Stewart Burns said the council figures were conservative and did not include long-term leases or other revenue from the Lakeview development.
”We’re confident with the convention centre up there, there will be development and income to council.”
Once the centre is operating, the council expects annual debt servicing costs to be $2.1 million.
Expected rates collection specifically for the centre is $3 million, with about half paid by central Queenstown commercial ratepayers and accommodation businesses.
As previously reported, ratepayer costs for the convention centre and controversial plans to extend Queenstown’s town centre have topped $1 million.