A top Queenstown businessman and former mayor has slammed ‘over-optimistic’ convention centre income projections.
Skifield and property tycoon Sir John Davies criticised consultants’ estimations of the proposed centre’s income in his submission to council.
“I believe the Horwath Report on income is over-optimistic,” Davies says.
“$6 million in the first year is about 115k a week – week in week out for 52 weeks.”
Davies believes the project will be disastrous for ratepayers if it goes ahead at the current level.
The experienced tourism bigwig says existing conference operators such as Millennium/Copthorne Group will continue to pursue conferences of up to 400 people.
“How would your figures look if you earn a max of three of four million per year?
“Horworth estimates income of $40m for the first five years, but what happens if it is $20m?
“If you spend $50m-plus someone will have to write out a cheque every year to subsidise the centre.”
Hotel, tourism and leisure consultants Horwath HTL provided the report for council.
Davies – made a Knight Commander of the New Zealand Order of Merit for his services to business and tourism – is best-known as the major owner of skifield company NZSki.
Other major tourism interests of his family company Trojan Holdings include guided walk concession on the Milford and Routeburn Tracks, a substantial property portfolio and interests in the transport industry where he first got into business.
Davies, 71, was mayor of the former Queenstown Borough Council from 1983-1986 and first mayor of the amalgamated Queenstown Lakes District Council from 1986-1989. Later he was also chairman of the Queenstown Airport Corporation.
Council has received 748 submissions on the proposed $50m convention centre. A public meeting will be held this afternoon, giving residents and businesspeople a chance to air their views.
Davies had proposed a smaller convention centre project on a Man Street car park building site, which was rejected by council.
“I cannot comment on the overall benefit to Queenstown as has been tabled,” Davies continues, “but if you get only half the income at the Centre — the overall benefit will decline by the same amount.
“Council/developers seem to be working on the basis that it will cost $50m-plus and how much income will be needed to service it – that is how developments get into trouble – ‘experts’ who do not invest their own dollars, give you glowing reports on the feasibility of such projects, and then accept no responsibility when the project fails.”
Davies says the land should be valued by two valuers and the convention centre developer should pay for it and council should not directly finance it, or run it.
“For nearly 50 years I have been very positive towards development in the area,” Davies concludes.
“I believe if this project goes ahead on the present level (and the amount of information) it will be disastrous for ratepayers.”