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One project starts, the other languishes

movie-museum-another-angle

by Lindsay Shelton
Confusing messages about two of the Wellington City Council’s biggest projects. Construction of its long-delayed Movie Museum with a Convention Centre on top has not yet started, though the project has a contractor. Down the road at the Town Hall, long-delayed work has begun at last, though no contractor has been chosen.

The Movie Museum project was first approved by the council in 2015 (at a cost of $134m), and then again in 2016 (at a cost of $150m). Mayor Lester told the DomPost that the deal with the council’s chosen tenant Sir Peter Jackson would be finalised by November of that year. It didn’t happen. Then-councillor Jo Coughlan said construction could start in January last year. It didn’t happen.

Four months ago we discovered there was a standoff between the council and Sir Peter Jackson. He said there were 55 matters that had not been agreed with the council. Since then, not a word from either side. Till last week, when Justin Lester gave a progress report which told us nothing:

we are … working hard in the background to make sure the Movie Museum and Convention Centre comes to fruition.

and also

working closely with Sir Peter Jackson and Sir Richard Taylor.

Have some of the 55 issues been resolved? Is Sir Peter still confident about the financial viability of a Movie Museum with a $35 ticket? Has the council been able to get agreement on a 21-year lease? Is the council’s enthusiasm undiminished?

The mayor’s brief mentions of the Movie Museum were included in a press release where he proclaimed:

“I’m proud that the Council has made significant progress on the majority of what we have set out to achieve.”

But later, a qualification:

“Obviously there are some things we are in more control of delivering than others, but on our partnership projects we are steadfastly committed to working well with stakeholders to get things done.”

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The Town Hall was not a partnership project when the council closed the building five years ago and announced that it had to be strengthened. Partnership status emerged in a deal with the NZSO and Victoria University’s School of Music, who agreed that the Town Hall is to be the centre of a Music Hub.

Two years after the Town Hall was closed, Mayor Wade-Brown said it was a “certainty” that the building would be reopened in 2019. No such certainty. The job will now be costing $85m, and the building will reopen in 2021 – after being closed for eight years.

For this to happen, a contractor has to be chosen. Last October, the council advised prospective contractors that the project would be a three-year job, starting next August. It said a request for tenders for the upgrade and strengthening would be made in the second quarter of 2018, and the main contractor would be appointed “in the second half of 2018.” In February, the council asked contractors to “register their interest in tendering.” Closing date was March 16. The next step in the drawn-out process:

In the second step, only those shortlisted Respondents may be invited to submit a detailed proposal in response to a Request for Tender (RFT) for the main contractor for certain development work.

But the council seems to be getting ahead of itself. At the end of last month, it announced:

Wellingtonians will notice the start of work on the Town Hall refurbishment soon, when earthquake strengthening gets under way …

Without a major contractor? It seems the work that’s now starting does not qualify as “main construction work.” Which needs a call for tenders and then the selection of a “main contractor.”

A complex process which was not applied for the Movie Museum and Convention Centre.

As the Mt Victoria Residents Association pointed out to the council in a submission in May 2016:

“The proposal has been stitched up in haste and in secret with no presentation of viable options, which is contrary to democratic processes of good local government. There is no evidence of any attempt to find private developers for what are essentially private operations; WCC simply states its preference to develop it itself… There has been no tender process for the development and construction aspects of the project – Willis Bond and Studio Pacific have been handed the project and presumably are able to charge what they wish.

The lack of tendering was also criticised by Mike Cole of the Property Council:

“Other contractors may do the project with small margins, just to have this trophy project on their books.” As an architect and developer, he would have liked to have seen the project put out to tender. He had spoken to other developers who were also keen to make offers, and they would have been competitive. “The way the process has been run seems odd…..”

The council’s Derek Fry confirmed that dissatisfied developers had voiced concerns. The deal was then tersely explained by Justin Lester. He said that Willis Bond had purchase agreements on the land chosen for the Movie Museum. “It was partnership or nothing,” Lester said. “There were no other options.”

10 comments:

  1. Lindsay, 3. April 2018, 10:17

    In the light of the Movie Museum mysteries, it’s interesting to remember that in 2012 the city council’s Ian Pike told the DomPost that property development was a risky business for a local authority. (He was responding to critics of another Willis Bond project.)

     
  2. TrevorH, 4. April 2018, 6:30

    May the Movie Museum and Convention Centre languish forever. This Council is planning to double ratepayers’ debt to well over a billion dollars in pursuit of these grotesque vanity projects which will be a drain on the public purse in perpetuity.

     
  3. luke, 4. April 2018, 7:55

    what has been the economic cost of having prime real estate sit empty for 8 years I wonder.

     
  4. Barbara Smyth, 4. April 2018, 10:24

    I don’t mind having a movie museum but please don’t let that ugly building go up. Hasn’t anyone got a bit more taste.

     
  5. CC, 4. April 2018, 13:17

    luke – you may recall that Mark Dunajtschik attempted to purchase the site for a hotel building that would have included a conference centre for the city. When that fell through, the city council’s City Shaper (now Build Wellington) had no difficulty in getting it – no doubt at a premium price. What has happened over that deal, and subsequently, has been great fodder for Council-watching cynics. What will the Council, which opposes land banking, do with the site now? Probably another $1 per year lease deal is in the offing.

     
  6. George, 4. April 2018, 17:25

    The council has no concerns about risking ratepayers’ money even though rates are an important component of affordable housing. With a trail of ‘projects’ that have or will cost ratepayers dearly – the Movie museum and Conference Centre will require a Casino to have any hope of financial viability.
    We have property developers converting inner city offices into apartments which will be leased to the WCC for up to 20 years. (The proposal is not for social housing and rents will be unaffordable for many).
    Risks to ratepayers are huge.

     
  7. Seamonkey Madness, 6. April 2018, 9:36

    George – don’t forget Zealandia, whilst perhaps not in the same realm as “property”, is a poorly-managed (from a financial perspective) asset. The Trust that runs it is (in)effectively a Council entity as the Trustees are appointed by the WCC.

     
  8. greenwelly, 6. April 2018, 10:10

    @Seamonkey, Zealandia is a actual council controlled organisation
    https://wellington.govt.nz/your-council/council-controlled-organisations/list

    It’s on the same footing as the Zoo.

     
  9. Pam, 6. April 2018, 21:19

    Zealandia has cost and is costing ratepayers millions. The idea of a sanctuary was superb, it didn’t need an ill considered attempt at Disneyland to go with it. Rates are escalating, and likely with next re-valuation of property value (RV) will skyrocket further.
    Huge ratepayer costs are associated with the Shelley Bay development Home owners struggle to pay the mortgage let alone escalating rates.The movie museum and conference centre should be left to private developers; if the proposed developments are commercially viable there will be no shortage of private developers willing to undertake the risk.

     
  10. TrevorH, 8. April 2018, 8:17

    @ Pam. Excellent points.

     

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