Council fees too big a hurdle, as Cromwell backpackers closes

The owner of the Cromwell Backpackers is closing the accommodation's doors next week, and plans to develop a new low-cost place for workers to stay in town have stalled due to what he claims are exorbitant council fees.

Darren Fox says the landlord of the backpackers' building, located on the edge of the mall in the centre of town, has bumped up rent by close to 20 percent.

Mr Fox has made the call to close his business, which he has had for seven years.

Some 20 occupants, many of them seasonal workers on local orchards and vineyards, will need to find alternative accommodation in what is already a stretched market.

Manu Viz, of Argentina, has been staying at the backpackers since December and working at a local cherry orchard over that time.

He is hoping he can nab a cabin at the orchard, where he has secured ongoing work despite the picking season rounding up, otherwise he will be camping onsite.

He says it is "very important" there are cheaper accommodation options available in Cromwell for workers that come and go throughout the year.

Sina Reitmayr, of Austria, who has also called the backpackers home since December, says she may have stuck around in Cromwell and continued to work, but the closure means it is back to life on the road for her.

She describes her hostel mates as "family".

Mr Fox does not want to leave the accommodation game - he says he spent five years living and working at the backpackers himself and sees a "severe need" for places like it in the town, especially with the closure in recent years of the Top 10 Holiday Park.

He says he has had cafe and even council workers new to town and unable to find a room stay at the hostel, as well as seasonal workers.

"It wouldn't be as bad if I could go straight into a new place, but this fee is stopping me."

Steep fees to start up

Mr Fox has spoken with staff at the Central Otago District Council after he was presented with an opportunity to lease another property off McNulty Road, in Cromwell's industrial area.

He has an idea to place small cabins on the site to resurrect his backpackers, but he has encountered an early stumbling block.

Staff at the council have indicated he could be hit with developer contributions of between $70,000 and $80,000.

"I was shocked to see the figures."

He says it is frustrating the start-up costs are prohibitive to providing low-cost accommodation.

"I'm just standing back now and going 'oh my god, I don't know if I can afford to do this'...It's really just put a sour taste in my mouth.

"I'm trying to help the community...Why make it hard for people to start? I'm not trying to sell blocks of land and make millions of dollars, I'm just trying to make a living."

Mr Fox says he has spoken to the mayor as well as "a lot of people from the council".

"They just all say, 'well, this is our policy'."

Yesterday Crux approached the council for clarification of the sorts of development contributions a project like Mr Fox's could incur, and whether such contributions were the same regardless of the type of business or development involved.

A spokesperson has indicated responses could take up to three working days.