Hospo has ‘blue flashing lights’, but it’s not all gloom
Businesses just clinging on in the CBD say they can survive if more people are attracted to the city centre. reports.
ANelson City Council summit this week was told extra net migration would be needed in the city to “keep the lights on” amid an ageing population. There were barriers – but also opportunities – for making the city more attractive, the summit heard.
Hospitality just surviving
“The message we had at council was that winter 23 was the toughest ever for our main street businesses, and we lost some,” Nelson Mayor Nick Smith said.
Most hospitality businesses in Nelson were “in survival mode”, with spending still “way off” pre-Covid levels, said Ian Williams, regional Hospitality Association president, and pub and restaurant owner.
“Hospitality costs have gone through the roof, while real spend has reduced ... we’ve got some blue flashing light stuff to deal with.”
Borrowing was expensive making growth hard to achieve, selling a hospitality business was hard, rental rates were variable, and finding staff was a challenge as “visa bureaucracy and the median wage nightmare” continued, with an “unstable” housing market affecting customer availability, he said.
Landlords and investors needed to support businesses, and more events were needed to bring more people into the CBD, while the council could simplify processes for businesses with a business ambassador, Williams said.
Chris Wilkinson from First Retail Group said new solutions may be needed for traditional retail spaces with people spending more in “spas and bars” (hospitality, entertainment and wellness).
Consumers wanted convenience and to know stores would be open, and businesses wanted to be among their competitors as it created a strong draw for customers, making precincts a good idea, he said.
“Better-located and more efficient stores, that creates a challenge for older cities like Nelson. That’s the reason why we’re seeing businesses going to some of these more purposeful sites.”
The city needed to get backpackers back in and develop civic infrastructure, to help boost inner city activity and living.
Hard to realise construction projects
Increasing building costs and compliance, and uncertainty around development plans, were making it increasingly difficult for construction projects to get off the ground, Nelson property developers said.
That was devaluing investments and driving up rents, they said. Indecision over civic infrastructure development in the CBD had put private developers off investing, and securing land for development could be risky.
Managing director of Scott Construction, Justin Candish, said there were “many moving parts” before developers knew if a project was viable.
“By the time you’ve worked through every [council] department to try and understand who might oppose it, or whether it’s an opportunity or not. I’d like to see one point of contact we can go to that will really give us an answer.”
“Middle range” starter homes weren’t really being built in Nelson, with more land needed to help make homes more affordable, he said.
But lots of land was sitting in family trusts or in council ownership, he said.
The council also owned a lot of land and could identify pockets to release or partner with, he said.
Steve Baigent from Tinline property developers said the city needed to become more concentrated to increase foot-traffic in the area
But car parks in the CBD’s retail blocks made the city too spread out, creating long walking distances between shops, and not allowing for “concentrated high value foot traffic laneways’’.
Earthquake issues were a major challenge for the city, he said. “We’re seeing already a number of key tenants leaving their buildings because they don’t comply,’’ he said.
The threat of Richmond
Nelson Mayor Nick Smith worried about the “drift in retail and investment” from Nelson to Tasman district over the past two decades.
While Nelson's population had grown by 30% since 2000, and Tasman’s by 43%, retail spend over that time grew five times more in Tasman – by 71% – compared to Nelson’s 13%, he said.
Fewer people were coming from Tasman into Nelson, with retail spend in Tasman due to exceed Nelson’s by 2030 on the current trajectory, Smith said.
Commercial building investment in Tasman had switched places with Nelson’s (roughly two thirds in Tasman and one third in Nelson) – the exact opposite of the situation every year before 2020, he said.
“The concerning part for me and for Nelson is that we’re not only losing retail spend to Richmond, but we’re also seeing a drift of professional technology and services companies.”
‘‘I do not wish Nelson to become the port for the city of Richmond. I acknowledge Tim [King], would be a great mayor ... but I would make a terrible harbour master.
Property developers said there was more land to build on in Richmond than Nelson.
Richmond also had a mall, with consumers in general finding malls convenient and reliable, retailers said.
Infometrics data showed Tamsan had more regional spending and job growth than Nelson last year. Nelson was second from
bottom of the 16 regions for spending, and bottom for growth, while Tasman was 3rd and tenth respectively.
Climate change dilemma: dowe stay or dowe go?
Alongside earthquake issues, climate change was one of major factors turning private developers off investing in Nelson, they said.
‘‘We haven’t yet understood whether or not we are staying in the city centre and managing our approach to protecting our crucial low-lying areas, such as Wakatū Square, or are we going to gradually manage retreat out of the city,’’ property manager for Wakatū Incorporation, Andrew Clinton said.
Nelson needed to get to grips with that quickly so people could confidently invest into the city centre “without fear that in 50 years’ time their investments are going to become redundant or devalue”, he said.
Managed retreat – one of the topics of the Climate Change Act – was ‘‘unpalatable’’ in Nelson CBD, with too little space to move to, he said.
There were good examples around the world where “storm-water type protection and defences against rising tides” were working well, Clinton said.
Development investments needed to be reviewed, with future land values calcuated depending on which adaptation path was chosen, he said.
“If we look to say ... invest in tidal surge defences over the next 100 years.
“How much for an individual ratepayer ... is that, equivalent to the value of the property.”
It’s not all doom and gloom
“It has never been a better time” to invest in the growth of Nelson, co founder of Nelson tech company Snap IT, Chris Rodley told the summit.
“There’s a bunch of businesses that have come up in Nelson that have been born here, there’s a bunch that are relocating here, and Moananui and these initiatives that have been launched recently are just the most exciting thing that I’ve ever been involved in in the city.”
Moananui, the country’s first blue economy cluster, opened its headquarters in central Nelson six months ago.
Nelson was already home to 400 plus marine-related entities, with New Zealand the fourth largest marine domain in the world having “uparalleled diversity in marine species”, chief executive of the Cawthron Institute, Volker Kuntzsch said.
‘‘If we invested a billion dollars into our oceans ... about three days of government spend ... we will turn New Zealand into a climate positive country in one generation.’’
More “world class scientists” were working at Nelson-based Cawthron Institute, as their peers gravitated there, he said.
Retailers said Nelson City Council was setting a good example to private landlords after striking a deal with Connings Food Market for a store on council-owned Wakatū Square in Nelson CBD.
And with a planned playspace along the Maitai River near the Trafalgar Centre, that would draw in younger families.
Many sectors praised the planned makeover of Bridge St in the city centre, which they said would increase inner city housing.
Smith said other “exciting” council projects in the pipeline included a new bus interchange at Millers Acre, a facility on Church St to store the Nelson provincial Museum’s collection, a community arts hub in the central city, Plan Change 29 that facilitated intensification, and plans for the Nelson Marina, including construction of a marine promenade that was due to start this year, he said.
And there was an opportunity to have “another crack” at development of council owned land along the waterfront, with “council owning for years the Anchor building the old powerhouse building, and three other vacant properties around Haven Rd”.