High cost QLDC office building to be rented back from Ngāi Tahu

Crux has learned more about 'Project Manawa' over the past two days as hundreds of residents vote in our survey that now shows 93 percent of respondents are opposed to the current plans.

We are still waiting for answers to questions Crux has put to the Queenstown Lakes District Council on the project, but here’s a summary of our latest findings:

• The plan to form a council joint venture with Ngāi Tahu Property (NTP) involves the sale of the Stanley Street land to NTP for a relatively modest $20 million but then the council will have to pay rent to NTP to rent its own offices back from the joint venture.
• The QLDC’s estimate of a close to $100 million build cost for its new offices, an “interim library” and a performing arts centre seems out of date and lacking in hard evidence.
• Crux understands the performing arts centre may be axed (or has already been axed) to save money, but the office/library element alone could spiral to $100 million or more, plus the QLDC will have to meet 100 percent of the cost of fitting out the new office building.
• If the combined office build and fit out is significantly more than $100 million then the economics of the entire project start to look highly suspect, especially as we don’t yet know how much rent the council will have to pay NTP.
• There could be other joint venture commitments that we don’t yet know about (similar to the land preparation costs with Lakeview that were supposed to be $19 million and are now close to $100 million). These hidden commitments could expose the ratepayers to unlimited extra risk with no hope of a future return as the council will be a tenant in its own building.
• The QLDC has not yet explained to Crux how the $20 million sale of land to NTP has been calculated and valued.

QLDC deputy mayor Quentin Smith today told Crux that he is “yet to be convinced” of the economic benefits of the Manawa project, saying he is not surprised at the very high levels of community opposition to the project.

As at 5.30pm (Tuesday, November 21) there have been 408 responses to a Crux survey to gauge community sentiment on any QLDC HQ project for the CBD.

The results show 93.3 percent of respondents oppose Project Manawa going ahead in its current form.

Some 45.8 percent say the council should simply stay in their current offices and not move due to high levels of debt, while 42.3 percent say they would support a more modest council office project as long as it was not built in the expensive and congested CBD location.

A little more than nine percent said they could support the current plan (this differs from the outcome of the initial yes/no question – see data), while 4.7 percent said they would support new offices in the CBD at a lower cost/scope. Close to two percent said they would support the same cost but only if the offices were outside the CBD.

The QLDC did issue a statement to Crux late yesterday (November 20) that we have published below. The council missed today’s deadline (November 21) to answer follow up questions that centres on the cost of construction and the proposed land deal with NTP.

“The estimated cost of the civic administration building is $51 million. This building will house Whakatipu-based council staff and an interim library. 

“Under the proposed Joint Venture model, Ngāi Tahu Property would contribute approximately $20 million towards the construction of the building.

“These figures are estimates as at June 2023. They are also subject to formal consultation on the 2024-2034 Long Term Plan, detailed design of the building, finalisation of a development agreement and final approvals by the full Council.

“QLDC has completed extensive community engagement and consultation on the proposed future use of the Stanley Street site.

“The site was identified as a preferred location for a community heart in the 2017 Queenstown Town Centre Masterplan. This process included two stages of community feedback in March 2017 (early insights) and July 2017 (Masterplan options). The office was specifically highlighted in the consultation document in the second stage of engagement.

“The next consultation was a formal special consultative procedure on the 2018-28 Ten Year Plan. Through this process, the delivery of the Queenstown Town Centre Masterplan projects and specifically funding for the Council office was highlighted as a ‘big issue’ for community consideration.

“Project Manawa was also highlighted in the 2021-2031 Ten Year Plan consultation document. Through this process, funding for a Performing Arts Centre ($51.2m) was also approved as a separate project to the Council office.

“The consultation underway is focused on the proposed foundational steps to enable the best use of the Stanley Street land to ensure the best future outcome for the community. This consultation is not seeking any feedback on the proposed council office building or cultural facilities themselves. The cultural facilities will be subject to further consultation at a later date following the outcome of this current process.”

Source QLDC: November 20