CENTRE’S ROCKY ROAD
was gone anyway. It was tilted alarmingly and stood on some of the city’s weakest soils. ‘‘The engineers said it had 35 metres of nothing underneath it. Just mud.’’
So the idea emerged to use the Town Hall’s insurance payout to build a new civic auditorium as the anchor of a performing arts precinct off Cathedral Sq. That could sit on the other side of Colombo St to the convention centre, helping to create foot traffic and maintain life in the area.
Likewise, the scale of the convention centre was going to force the demolition of the Central Library in Gloucester St. But again to ensure the convention centre did not kill that side of town with its looming bulk, it became an answer to shift the library into Cathedral Sq.
The plan was then that the convention centre itself would be developed as an integrated precinct. It would have at least two connected hotels and an ‘‘activated’’ frontage of upmarket shops, bars and restaurants.
The needs of a quadruple-size convention centre were dictating many of the rebuild’s decisions. Everything had to be done to soften the impact of building a ‘‘big barn’’ in the heart of the city.
But then Christchurch City Council turned around and decided the Town Hall was worth saving. The performing arts precinct lost its main tenant.
Developers could also see that shops, restaurants and office blocks were heading elsewhere in the new CBD, while the hoteliers
were not keen on paying extra for the privilege of being part of the convention centre precinct. Commercially, it was not an attractive proposition.
The source says if the lines of communication had been kept open – if Brownlee’s office had been willing to adapt to changing circumstances – the convention centre could have evolved into something more pragmatic.
Instead, the project was allowed to plough on with a cost structure the Treasury and other government departments were always going to challenge.
This led to the years of wrangling over what the Crown was in fact willing to spend and whether a worthwhile convention centre was even do-able in Cathedral Sq for that price.
The first crunch point was the bitterly disputed 2013 cost share agreement where the Government and council divided up financial responsibility for the central city’s rebuild.
The council made it clear it did not support such an ambitiously-sized convention centre. If the Government wanted it, it would have to go it alone.
So an estimate of $284m Crown spending was registered in the agreement with Brownlee signalling the Government might recover its costs eventually through some sort of sale of the precinct to private investors.
But by now a business case had been commissioned from PriceWaterhouseCoopers (PWC). And as now revealed after its release under OIA , it made for dismal reading.
PWC warned the convention centre would likely never show an operating profit in 30 years. Its annual running loss would start at $5m and settle to $1.4m. PWC said building renewals – buying new carpets, doing maintenance overhauls – would cost any owner another $38m over the first two decades. Or an annual $2m.
So even at the then envisaged price tag of about $250 million, it looked a difficult investment to justify. Other business case documents were also loud with warnings.
Commercial real estate agents Colliers said it would be difficult to get shop tenants for a convention centre precinct. Conference goers prefer the authenticity of a town’s ‘‘real stores’’.
Hotel consultant Horwath HTL said it carried out market soundings and found little enthusiasm among hoteliers to get involved in an integrated development. They preferred the control of doing their own standalone projects.
Horwath said there was also the market fear that with so many New Zealand convention centres being built, the country’s meetings industry could end up cannibalising itself.
Nothing would stop Auckland’s SkyCity-owned convention centre going after the same 600 delegate conferences that were supposed to be Christchurch’s bread and butter. And not only was Queenstown getting a rival South Island convention centre, but Wellington City Council had decided to build one too.
The Government looked to be winging it. Its ambitions seemed uphill from the start. And so it proved as soon as the CCDU took the plan to market in 2014, seeking a commercial partner to share the Crown’s financial risks.
Even after extending deadlines, the CCDU embarrassingly ended up with only one serious taker – Australia’s Plenary Group, working with local developers, Philip Carter and Ngai Tahu Property.
As many remarked, the Government had got itself into the problematic position of trying to negotiate a competitive tender when left with just a single builder. Not the way to do business.
The CCDU then also named the French multinational Accor as its preferred centre operator. Insiders say the scope of the project became even more difficult to control as there were three parties wanting to pull it in different directions.
And certainly government documents show the costs suddenly blowing out as Plenary started to report back on what it would actually take to build its desired ‘‘architectural statement’’.
The original 2013 Blueprint scope called for a 2000 seat auditorium that could be split three ways – hosting simultaneous meetings of 1000, 500 and 500 – with the option to expand this to 2500 seats in the future.
Underground parking for 350 cars was another part of the requirement. And the building had to be international-standard in its looks. No compromise.
So duly in mid-2014, Plenary released drawings of a glittery double-donut complex. All sweeping curves and silver chevron panels.
But by early 2015, as detailed costings were being produced, CCDU realised it was now talking of more like a $500m building.
The supporting commercial backing was also evaporating.
Not only had the council saved the Town Hall, undermining the performing arts precinct, but the Crowne Plaza – always the unofficial convention centre hotel in Kilmore St – had announced it was going to shift into the 19-storey Forsyth Barr building.
Standing right across Colombo St, opposite the convention centre’s front door, it was a smart move. But it meant one of the precinct’s potential hotels had just slipped away.
A Cabinet meeting in March 2015 was told the original cost share estimate of $284m had soared to $451m.
The building itself had inflated from $167m to $277m. The land was costing $77m, with the chance it could reach $88m. Then came all the extras like $21m for a car park, $20m for IT and audiovisual equipment, $11m for furniture and fittings.
Another $69m was needed to pay Plenary to manage and maintain the centre for 10 years. Accor was also asking for a $27m subsidy to cover its start-up marketing costs and early year operating losses.
Cabinet tried to draw a line in the sand. Plenary was asked to revise the fancy architecture and work within an ‘‘affordability threshold’’.
Plenary came back with three options, none of them deemed acceptable. Either they were still too expensive, or they compromised the design too much.
The convention centre was in real trouble. The idea of doing something so large in the city’s best location meant it had to be made to look so good that it couldn’t really be afforded.
But the Government had vowed the convention centre was essential to restoring business confidence in Christchurch. Politically, it had backed itself into a corner.
Matters dragged on into 2016. In April, spelling an end to any commercial joint ventures, Ngai Tahu pulled out of the Plenary consortium.
In June, Brownlee announced the Crown would now go it alone. It would seek a contractor on a fixed-price deal and do a pareddown design.
Otakaro, which had taken over from CCDU, released the new architectural renderings. The 2000-seat centre with the ability to run three conferences simultaneously had shrunk back to a 1400 seater that could support two.
The expensively curved exterior – or ‘‘silver cowpat’’, as some labelled it – had become a more functional box with a draped decorative facade.
The Colombo St frontage was bland office block glass. The footprint had contracted. No underground car park was mentioned. The connected hotels and other commercial development meant to flesh out the precinct were left blank spaces.
Former mayor Garry Moore – a constant critic of the Government’s failure to consult on the project – describes the procurement process as ‘‘an explosion in a porridge factory’’.
Moore says the proposed convention centre should be stopped even at this late stage.
Again it is the opportunity cost arguments. What is the point of having ended up back with a smaller, functional, standalone pavilion that could have been stuck down some city back street? Cathedral Sq deserves better, Moore says.
‘‘[It’s] an example of state funds being used to construct a building which will be too large for Christchurch and which will be an albatross around the financial necks of our children and grandchildren,’’ he concludes.
Not many would agree with Moore’s call to ditch the centre. The Government is hardly going to hand over the money saved for something else. So best to accept the result on offer.
But how far off the original promise will it be?
Otakaro’s Brantley insists Christchurch will be impressed by the eventual outcome. He says even with the simplified exterior the convention centre is up for an international award – shortlisted at this November’s World Architecture Festival in Berlin.
‘‘It still has plenary auditorium seating for 1400, an exhibition hall capable of holding around 200 exhibits, significant meeting rooms and break-out rooms, facilities for formal banquets.’’
Brantley won’t talk budgets, so it remains to be seen if the trimmed down specification is in fact going to save the Government much on its earlier envelope price of around $450m.
On the subject of the surrounding empty land, Brantley says Otakaro is still busy trying to get it developed.
Pointing to the convention centre’s current design, he says a corner section – the wedge of land actually looking out onto Cathedral Sq – has been reserved for a high quality 200 to 250 bed hotel.
It would be easy to knock through the walls to give the convention centre at least one integrated hotel tower.
The other left-over land is likewise on the market. Brantley agrees Otakaro has less control over its development. But it could be used for another hotel or even luxury apartments.
So rather than leading the central city’s revival – the convention centre was meant to be open this year – it is trailing it.
However Brantley disputes the idea that it will be a money loser. Even in its current incarnation, it should break even, he says. Then there will be the much greater spin-off value it has for Christchurch’s economy in the business tourists it will attract.
Convention organisers are also optimistic. ChristchurchNZ convention bureau manager Caroline Blanchfield says it will surprise people how fast it takes off.
‘‘2020’s looking absolutely powerful for the convention centre as a year one opening.’’ There are enough pencilled-in bookings to fill it already, she says.
Jan Tonkin, managing director of Auckland’s The Conference Company and also current president of the International Association of Professional Congress Organisers, says she believes Christchurch has got it right.
Kilmore St was too cramped and remote a site, says Tonkin. There was no point Christchurch doing anything other than aim to compete at the top-end of the small conference market.
And the current design still has the outdoor flow to the Avon River and Victoria Sq. It has the big windows that let in the natural light and give views across Cathedral Sq and the city.
The interior has wide corridors and foyers with plenty of the ‘‘nooks and crannies’’ that encourage delegates to stop and chat.
Tonkin says conference organisers realise this is where often the real business of meetings gets done and will pay for that quality in a venue. ‘‘They know when you’ve got that daylight, that connection to the city you’re in, it’s a huge plus.’’
Yet still, critics will continue to question the wisdom of making a convention centre the priority around which so much else in the central city has had to revolve.
Yes, it will probably be good. And at least the spending sits safely on the Government’s balance sheet. But what other decision might have been so much smarter for a recovering Christchurch?