CBD project: Council warned of ‘major risk’

An Invercargill City Councillor has described the investment in the city block as operating on a wing and a prayer and says it could resemble the Don St blowout.

Cr Ian Pottinger believed stages one, two, and three of the project, which the council has committed up to $25m in, had too much retail space.

He was also worried about the $21m gap in funding and what that would mean for ratepayers in the future.

Stuff has been provided a copy of the minutes from the November 20 public-excluded meeting where the city block investment was discussed.

The meeting was called after investor Geoff Thomson pulled out of the project, leaving a $21m gap in the $165m budget for stages one, two and three.

At the meeting Pottinger, Mayor Sir Tim Shadbolt, deputy mayor Toni Biddle, Peter Kett, and Rebecca Amundsen all voted against proceeding with the project as it was.

However, councillors Lindsay Abbott, Allan Arnold, Nobby Clark, Alex Crackett, Graham Lewis, Darren Ludlow, Nigel Skelt, and Lesley Soper voted in favour of the motion to ‘‘work with the remaining equity investors and other potential funders to ensure there is sufficient funding to move the project to its completion’’.

Pottinger pointed to the lessons from the council’s Don St commercial building development which cost ratepayers $4.5m more than expected.

He believed they should continue with the city block demolition, but it was time for a rethink of the design.

‘‘We are on a wing and prayer with this baby,’’ Pottinger said.

‘‘We’ve got to cut our cloth to sort our shortfall of money and suit the budget. I believe it is a major risk.

‘‘You talk about retail and

people say, ‘well, retail is a risk’. Well, we are not meant to be taking risks.’’

Pottinger would like the block to be less focussed on retail, with some of the retail space to instead be used as public spaces.

‘‘I was told retail was needed to pay for the thing. That’s when I thought, ‘hold the bus here, we’ve got to do some thinking’.’’

Cr Abbott acknowledged there was a $20m shortfall in the project, but he voted to continue with the development as it stands because he felt it was the most exciting project he had seen Invercargill undertake.

In the meantime new investors could be sought, and if the council was required to invest more, the public would be consulted first.

The first buildings are expected to start coming down on January 6.

Pottinger said there was still time to look at the build design to ensure it fitted what the ratepayers needed, both financially and in regards to public spaces.

Invercargill Central Ltd is the company behind stages one, two and three.

It has two directors, Scott O’Donnell and Brian Wood. Wood is the Invercargill City Council representative.

O’Donnell could not be reached for comment yesterday, but last month he told Stuff they were in discussions with another potential investor.

Even if another investor was not found O’Donnell said they would continue with the current plans, confirming the development had not been scaled back after Thomson pulled out.

Within the $165m budget there was a fair bit of ‘‘contingency’’, O’Donnell said.

He hoped some cost-savings could be identified as work progressed.

As of last week, retail tenants Farmers and Starbucks had been confirmed.