Caution over $120m hotel deal
A new $120 million, 10-storey-plus hotel development smack bang in the middle of central Hamilton is a “huge win” that’s likely to attract yet more big projects to the city.
Local business leaders have welcomed a conditional deal between Auckland’s Templeton Group and the city council over the proposed development at 242-254 Victoria St, despite one prominent local developer revealing that his ideas were knocked back.
Besides creating the four-star hotel between Victoria on the River and the regional theatre, the development is to include retail and residential space, boosting what’s on offer in the inner city, and increasing foot traffic.
Additional open space beside Victoria on the River is also planned by the city council with Templeton’s help at 260-266 Victoria St.
Still, it could be up to a year before the hotel deal goes unconditional, and building is due to take a few years after that.
And there’s a warning from a commercial property expert that the city shouldn’t count its proverbial chickens before they’re hatched, given the potential for tougher economic conditions to affect developer financing.
For now, Waikato Chamber of Commerce chief executive Don Good calls the hotel announcement a “huge win” in terms of its potential to boost the likes of construction activity and visitor numbers. It would also create a new hospitality hub and add to ongoing transformation of the central city.
Good said he was confident that Templeton would stand the project up, and felt the company’s status would enhance Hamilton’s image with other companies.
“The Waikato and Hamilton are on the verge of a decade of investment from both people within the Waikato and others coming in with capital from outside.”
The hotel and theatre would help to enhance a modern city image and the feel of the CBD, as well as boosting the hospitality sector to the south of Victoria St, he said.
With a riverside hotel, “you’ve got the opportunity to make something look absolutely outstanding”.
Hamilton Central Business Association general manager Vanessa Williams – who’s been keen to increase CBD foot traffic – is also stoked.
“It will help raise the central city profile visually in that part of town,” she said.
“Templeton has done some fantastic projects, and they will only be going into those projects that it’s worth their time.”
“It really does send out such a positive message on Hamilton’s rise.”
While hotel bed numbers aren’t finalised, Williams said any significant increase would enhance the city’s events capacity.
“The conference market as we know it is huge, and we’ve got ... close to 1.5 million or 2 million people within a drive distance of us.”
Commercial property specialist Mike Neale, managing director of NAI Harcourts, is another singing the praises of the project.
“If it happens, I think it will be absolutely fantastic,” he said. “There is no doubt the CBD needs more quality accommodation for events.”
But he pointed to some developers nationally having to sell properties to reduce debt amid a challenging economic environment.
Templeton founder Nigel Mckenna was this week confident the deal would go unconditional if “semi-normality” prevailed, although he said there was still a lot of planning to do.
However, Neale said: “I would say at the moment, there’s nothing [certain about] ... what normal conditions will look like in 12 months.
“Any development – whether it be a hotel or any new build at the moment – it’s a challenging environment from a banking perspective to get some of these things out of the ground.”
City economic development chairperson Ewan Wilson said this week the council had fallback options in the “unlikely” event of the arrangement with Templeton not panning out.
Matt Stark, director at Stark Property – involved in the nearby Riverbanks development – is another sounding a note of caution about what he understood was a “very conditional” deal.
His firm had been interested in the site, too, but its ideas hadn’t been accepted by the council, he said.
“If Templeton do what it has proposed, it is a fantastic outcome for the city.”
Stark said the deal gave confidence that “people are looking at Hamilton”, and it would be great if the deal signalled that it was a go-to place. But he added: “Sometimes, I know councillors run out the red carpet, but I think we’ve got the capability here to do it locally. That’s an opinion.”
Meanwhile, the operator of the iconic Nivara Lounge entertainment venue is hoping to convince the council and Templeton to let him stay on below ground at 266 Victoria St.
Ivan Muir, currently on a month-tomonth lease, said he thought he had at least 18 months “before they send the diggers in”.
“The project is great for the city ... but it just means some little things might get pushed sideways.
The council has said it and Templeton are working closely with current tenants.