Oruku Landing Conference and Multi-Events Centre consultation

To meet the requirements of the Government’s $60m offer, Council needs to accept or decline the government funding by 30 November 2021.

To meet this deadline, we are seeking public feedback on the project using the information we have right now. Following consultation, Council will review and deliberate on community submissions on 26 November 2021 to decide whether or not to continue with the project.

Council will continue to look at other funding or cost recovery options for the project, as well as ways to reduce the cost of the project.

Council will also consider whether removal of individual components could bring the cost down but will need central government agreement to proceed with this.

Initially the entire build was to have cost Whangārei up to $57m (on top of the $60m from government and $6m from Northland Regional Council) which would have been funded by debt.

Once the multi-events centre was built, there would also be annual operating expenses of $5m.

Update as of 8 November 2021

On 4 November 2021, we received a further report from the consultants developing the design of the Oruku Landing Conference and Multi-Events Centre.

This report has implications for the cost of the project - a further $13.15m which would result in a further 1% rates increase if the project proceeds at the current scope.

The report is part of the work that was commissioned in association with the Government to further refine the costs of the project. To ensure transparency and assist the consultation process we have released the report to the public.

The Beca Oruku Landing CEC Preliminary Design Report indicates that the costs for the project could be up to $13.15m higher than the estimate of up to $123m that Council knew of at the time consultation began (18 October 2021).

If we were to proceed with the project with the extra $13.15m of costs the effect would be an additional general rates increase of 1% on top of the 6% in the consultation document, totalling a 7% increase.

We are continuing with the consultation we began on 18 October 2021, updating our website, informing submitters of this new information and we have included it in this week’s public presentations (8, 9, and 11 November).

We have also generated a page outlining the developments and their impacts for distribution at Consultation Document pick-up points, including our service centres at Rust Avenue, Whangārei; Takutai Place Ruakākā and Council libraries.

Consultation update - 8 November(PDF, 165KB)

Once we have received all submissions it will have numerous options to consider. These include, but are not limited to:

• proceeding with the project and fund the extra $13.15m through debt, with a higher rates increase (7%).
• seeking funding for the extra $13.15m from Crown Infrastructure Partners (CIP).
• Consider a reduction of scope for the bridge and ferry terminal to be dropped from the project - Oruku ferry terminal cost $2.6m - Oruku to Town Basin Hātea Bridge (shared path) cost of approximately $18.5-$20m
• deciding not to proceed with the project once all of the submissions are received.

Once all of the submissions are received, we will consider all options.

If you have already made a submission and would like to change it in any way after considering this information please make a new submission and state in it that it is your second submission.

We will ensure that only your final submission is considered.

Beca Reports(PDF, 10MB)

Covering the cost of the debt (interest costs), the ongoing expenses of the building (things like depreciation, insurance and external maintenance) and debt repayment could result in a further district-wide general rates rise of up to 7% in 2022-23 if the project proceeds to the full extent of its scope, including the extra $13.15 identified in the Beca report.

This would be in addition to the 4.5% increase we have already committed to in our 2021-31 Long Term Plan.

This could mean a total proposed rates increase in 2022-23 of up to 11.5% should the project go ahead if the project proceeds to the full extent of its scope, including the extra $13.15 identified in the Beca report.

There are opportunities and risks for this project. Here’s an overview of some things to think about when considering whether you’d like to see it go ahead.

Opportunities

Please note the figures below were quoted prior to the most recent Beca reports (received on 4 November 2021).

• destination facility with high quality public spaces on the northern side of the Hātea Loop to link with ongoing investment at Pohe Island and the Town Basin
• large modern facility to host a wide range of conferences and events for residents and visitors, which may bring significant social, cultural and economic benefits
• could support Whangārei and Northland’s business sectors, as events can create midweek demand and help with seasonality issues
• could attract a 4-star hotel to bring economic benefits and support more and bigger events
• investment of $33.2m in infrastructure – including intersection works, stormwater and wastewater, boardwalk and bridge
• opening bridge between the Town Basin and Oruku Landing will improve connections to the central city area and give more options to Hātea Loop users
• one-off $60m funding offer from Government - without this, the project could not proceed
• $6m from Northland Regional Council (funded through their rates)
• potential cost reductions from detailed design changes
• projected employment of 175 full-time and 78 part-time equivalent jobs during the build and 58 full-time equivalent jobs when complete.

Risks

• some distance from central CBD (Central Business District)
• depends on Council securing the land
• could compete with, as well as complement, other facilities including the Hihiaua Cultural Centre, Northland Events Centre, and in future, a redeveloped Forum North theatre
• limited on-site carparking would require shuttle services or people to walk from existing car parks for conferences and events
• another bridge across the Hātea River will impact larger vessels, may impact marina operations and may cause loss of some moorings
• a 4-star hotel accommodation is planned next door but its construction is not guaranteed
• at this stage Government only allows for two options for Council to consider: accept the $60m and invest up to $57m of Council money; or decline the funding and revise the scope of the project, which would require reaching a new agreement with Government and potentially another public consultation once revised costs are known. Due to the Government's funding agreement deadline of 30 November 2021, we are not in a position to revise the costs or scope of the project now
• up to $57m contribution from ratepayers through debt to be paid for through rates rise plus ongoing operational costs
• Council required to underwrite the Council Controlled Organisation running the centre for any losses
• additional debt could reduce Council's credit rating, resulting in increased finance costs.