Foodeast project victim of costs
Food industry innovation hub scaled back
Amajor project worth about $20 million on the outskirts of Hastings has fallen victim to rising building costs. Construction of the Foodeast development on Elwood Rd, near Showgrounds Hawke’s Bay, was set to begin last September but has been pushed back by more than a year.
It has now been revealed that rising building costs stalled the project last year and forced its design team to go back to the drawing board and downscale the project to fit within budget.
When it is eventually built, Foodeast will be an innovation hub for the Hawke’s Bay food industry where businesses can come together, network and work on new products.
The project was awarded $12 million in Government funding in 2019 and it has been hotly anticipated since.
Unfortunately, rapidly rising building costs have led to the original design being scratched.
The design team is currently working on a new, scaled-back version of the project which includes reducing the main building from two storeys to one.
Foodeast chairman Craig Foss said artist impressions of the new design could be released in the coming weeks.
Construction is estimated to begin on the new design in late 2022, and will take roughly one year to build.
“The ambition of the project hasn’t changed. We remain absolutely committed to that,” Foss said.
However, he said, due to rising costs the price to build the initial design “far exceeded the money we had available”.
“At the end of the day this is taxpayer and ratepayer funds, and we have to be very careful and diligent about how we manage [the project],” Foss said. “We are redesigning Building A in particular because that was a very expensive build.
“We are cutting our cloth to suit our cheque book to make sure we are true to what we are committed to achieving, but obviously within budget.” The project will still feature two buildings including a main one with leased spaces and plenty of shared space and desks for networking and collaboration, as well as a cafe.
The second building will largely be used for testing and trialling new products.
The majority of the funding ($12 million) is coming from the Ministry of Business and Innovation and the rest of the funds is coming from the Hastings District Council, Hawke’s Bay Regional Investment Company (owned by the Hawke’s Bay Regional Council), and Progressive Meats.
Foss said the total cost of the project would be nearly $20 million to build and get Foodeast up and running.
It is hoped the project will add millions of dollars to the region’s GDP and help create hundreds of jobs in the future.