New Cromwell hall facing $1.7m annual operating bill

Cromwell's new hall is estimated to cost approximately $1.7 million a year to run, with annual revenue generated from it unlikely to reach more than half a million dollars in the first five years.

The figures were delivered by Central Otago District Council staffer David Scoones to members of the Cromwell Community Board at a workshop this week.

Mr Scoones is looking around the country to see how other local authorities are running facilities of a similar size.

An image of the new hall as viewed from Lake Dunstan (Image: CODC).

During the workshop he said the $1.7 million figure reflects operating costs like staffing and electricity bills for a 3,000 square metre building, but does not include insurance, depreciation and debt servicing.

He picks the new hall will generate approximately $100,000 in its first year of operation, from a mix of community and commercial use, with revenue increasing to $550,000 by year six.

Exactly how the hall will be run, and by whom, is still to be decided, and Mr Scoones is floating three options to the board.

The first, a council-run facility, in the same vein as the Cromwell pool complex; the second, creating a council controlled organisation to run it; and the third, leasing the whole thing to an external operator.

His quick take: options one and two are the most likely scenarios, as any lease arrangement with an external operator would ideally need to cover much of the $1.7 million of running costs.

As he puts it, an external operator would need "people like Taylor Swift coming" to make such an investment work.

Mr Scoones was seeking to gauge if there was any "allergic reaction" from members of the board to the idea of setting up a council controlled organisation, of which none exist in the district, to run the hall.

As the board members displayed a willingness to progress the idea, Mr Scoones will now research the option further and provide an update at a board workshop scheduled for early November.

Board members were also asked by council staff to consider whether the new hall will be "a commercial facility or a community facility".

Renting out some of the meeting or exhibition spaces on a longer, fixed-term basis, at least to begin with, is one option to offset costs, they were told.

The idea of creating a "hot desk" set up was pitched during the workshop.

Board member Wally Sanford imagined out loud conference goers in "business suits with lanyards" using the facility, while having members of a community group "traipsing through" to get to their regular rented space.

Councillor and community board member Cheryl Laws emphasised a need to strike a balance between commercial and community use of the facility.

Community board chair Anna Harrison gave the board's backing for Mr Scoones to continue down the track he was heading with his research, saying there his presentation had been a lot to take in. 

The hall is being built on Melmore Terrace at the site of the now demolished Cromwell Memorial Hall.

The $45.8 million building will include a 400-seat auditorium, a 40-seat cinema, a museum, a cafe, and flexible meeting and entertaining spaces.

According to Mr Scoones, the Cromwell pool also costs close to $1.7 million a year to run.

Main image (CODC): An design image of the new $45.8 million hall under construction on Cromwell's Melmore Terrace.