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convention-centre-revised-2

by Lindsay Shelton
When Wellington city councillors vote next Thursday on whether to spend $154m on a convention centre, it’ll be the city’s fourth attempt to green light what is an expensive and controversial project, and the fourth version of the plan.

It was almost six years ago that former mayor Fran Wilde told Newstalk ZB that a convention centre was “necessary” for Wellington. But her concept went nowhere – because it was to be based in a casino, which had been soundly rejected by the city back in 1996.

A convention centre plan next emerged at the end of 2013, when Mayor Celia Wade-Brown’s council included it in a list of ideas being investigated as part of the city’s Economic Development Strategy. (A movie museum was also on the list.)

In May 2014, a specific proposal emerged: the conference centre would be attached to a five-star hotel to be built by developer Mark Dunajtschik. The mayor said:

“This conference centre and hotel will put us ahead of Christchurch and Auckland developments, with no need for a casino. Negotiations and planning is ongoing … the plan is for a purpose-built conference venue with a partnership between the Council, a consortium of local and national interests, and an international hotel chain.”

The council wasn’t going to pay for the building. But we learnt that the city would pay a rent of $2m per year for the convention centre, which would be next to a five-star Hilton Hotel. And when councillors were asked to vote in October, the costs had risen. The DomPost reported that ratepayers could face a bill of $92 million over 20 years for leasing the convention centre.

Nevertheless, a majority of councillors voted to support the plan. But it didn’t last long. In December, it collapsed – because the developer had been unable to buy the land.

During the debates of 2014, the then mayor said the city had investigated building its own convention centre but the cost had put them off:

… >$50m (borrowing and construction risk) with … ongoing ownership costs of >$5m per annum. Plus we would need to operate the centre and take on the operating risk.

Such concerns had been forgotten – or maybe they were just being overlooked – when the next version of a convention centre emerged at the end of 2015. The council announced a plan for a convention centre and movie museum (but no hotel) at a cost of $134m. The cost of this three-storey building was to be paid in full by the council, which continued to support the plan when the cost went up to $150m and more.

But after almost three years of negotiating, this plan – also – collapsed, when Peter Jackson’s group became doubtful about the financial viability of the movie museum.

Mayor Lester was unwilling to give up. On the same day that the convention centre/movie museum proposal fell over, he insisted the council would move ahead with the convention centre. “We are gearing up for a sod-turning in 2019.” Which raised the issue: what would happen to the empty movie museum space?

And now, on Thursday, there’s a report and a business plan asking councillors to approve spending $154m to build a different version of the three storey structure. The interior of the building has been changed – but the group in charge has stayed the same as the movie museum version, with Willis Bond as development manager, Studio Pacific as architect, and L T McGuinness as the main contractor – the same group, chosen by the council with no tender process. The absence of tendering was challenged in 2016 by the Mt Victoria Residents Association which was also critical that

the ratepayers must bear all the construction, ownership and operating risks. It is not core business for local government to be in the business of building and owning convention centres or commercial buildings (except for social housing).

The revamped convention centre – with the council bearing all construction, ownership and operating risks – will now occupy the two top floors instead of only one – and will be able to handle conferences with 1500 people on two floors, or two concurrent conferences each with 800 people, banquets with up to 1180 people, or 1930 people in a theatre style arrangement. (The Michael Fowler Centre can seat 1800 people, so the council seems to be weirdly aiming to go into competition with its best existing venue, which it describes as a prestigious environment for showcasing major conferences.)

The business plan promises that the new convention centre will bring 111 new events to Wellington every year, bringing “149,000 additional delegate days.” The enthusiastic writers of the plan have upped what they are promising – their business plan for the previous convention centre promised only 67 new events per year. The basis for such rosy forecasts is not specified.

The exhibition centre – only one floor, instead of two that were planned for the Movie Museum – will no longer house the unique offering that was promised by Peter Jackson’s collections. Instead, it will hope to attract touring overseas exhibitions that will already have been seen in other centres round the world. (The council mentions Star Wars and Harry Potter as justification for how it will use the space.) What was touted as a unique attraction for international tourists, will now appeal solely to domestic visitors. Cue another revision of visitor expectations and income.

And as for income: the movie museum was to pay an annual lease of $3m. Such revenue can no longer be factored into the budget. Instead, the city will be facing considerable extra costs each time it brings a touring show from offshore and sets it up for a temporary period. Across the road, Te Papa seems to have been challenged by such costs. Its temporary exhibition space hasn’t been used for any exhibitions since the Lego exhibition last summer. Before Thursday’s vote, the council should be talking to Te Papa about the reality of the costs involved with temporary exhibitions.

Gordon Campbell in 2015: Convention centres are “high stakes gambles”

16 comments:

  1. Citizen Joe, 10. December 2018, 10:10

    All the forecasts are pie in the sky. And any slivers of the ‘conference pie’ will be stolen from Auckland and Christchurch. So there will be no net national economic multiplier effect except for in-efficient additional connecting air flights.

    Ratepayers should not stump a cent for this pandering to Corporates and GHG flatulence. Councillors must vote NO.

     
  2. Traveller, 10. December 2018, 10:49

    The city council shouldn’t be spending any money to build a space for occasional exhibitions such as Star Wars and Harry Potter which will already have been seen all over the world – they have no value or relevance for Wellington.

     
  3. Tuna can, 10. December 2018, 13:00

    111 new events to Wellington every year???

    That’s more than two new events a week! Are they saying the conference center will be fully or over booked all year? That’s simply delusional. Even 67 events per year is pie in the sky. If this was the case I can see it would simply suck all other events from the likes of the stadium and Michael Fowler Center etc. turning them into white elephants.

    This was a marginal proposal with the movie museum; without that income stream it’s economically reckless to proceed with this.

     
  4. Andrew, 10. December 2018, 15:58

    So now the exhibition space has a similar model to the runway extension; build it and hope they will come?

    Would potential movie exhibitors question why PJ pulled out of the project? What kind of conditions would the WCC impose on exhibitors? So many questions.

    The Mayor states ‘I’m putting the full weight of my support behind this project.’ What does that mean exactly? Secret handshakes and winks? Remember, the Mayor only has one vote at the table.

     
  5. Trevor H, 10. December 2018, 20:33

    Lester and Lavery must go. This awful, useless project will be a drain on generations yet to come. Research has shown the only benefit of convention centres, so 1970s as a concept, is to raise property values for nearby businesses.

     
  6. Blimey, 11. December 2018, 7:48

    Why is it taking so long to strengthen the town hall and so quick to build this “convention” centre…and without any consultation with us residents…
    Quite a lot not right here???

     
  7. David Mackenzie, 11. December 2018, 7:50

    The concept of a convention centre is ridiculous. The Council should be looking carefully at its finances. For example they owe me $500 per annum rates reduction for the loss of amenity over the reduced bus service, and loss of parking at my address. I am sure there are others. I realise that the city council are only indirectly involved in the mess. But my comfort is reduced as a result. Let’s get together and sue!

     
  8. Sekhmet Bast Ra, 11. December 2018, 13:30

    Do agree with you TrevorH, I for one will be well pleased when the current mayor, CEO and certain amongst the councillors move on to their next assignments. A recent report covering the formation of Wellington First by former councillor Bryan Weyburne and Digby Paape suggests dissatisfaction is growing amongst citizens. While Wellington First are concentrating on the cycleways issue, if they can expand their vision to engage every other citizen who is feeling oppressed by globalist socialist command and control via greenification tactics, then regime change could well be on the cards following the next local body election.

     
  9. aom, 11. December 2018, 20:18

    Sekhmet – if Weyburne and Paape would rather see the demise of DOC workers than the imports that kill native flora and fauna, they will last about as long as a weasel on Mt. Victoria.

     
  10. Blimey, 11. December 2018, 21:12

    Has anyone looked at the council report for Thursday’s meeting?
    There’s something fishy (is that why it is called Te Ika?) about the finances…$179.5m total cost, of which only about $45m (“before internal allocations.”…what are they??) is purported to be a cost to the ratepayer, and $25m might or might not come from the Government.
    All other explanation is in a 129 (or so) page “business case” which might or might not explain where the missing dollars are to be found. Anyway the “business case” seems just to be a long long press statement full of more spin than fact. No councillor should approve based on such shoddy advice.

     
  11. aom, 11. December 2018, 23:05

    Well spotted Blimey. Pity most of the Councillors will short-circuit the reading process, so will not see that this is another Willis Bond/LT McGuinness benefit built on deals behind closed doors with Build Wellington. Why is it that history repeats so often with the Council that has let successive Mayors and the administration run amok on vanity projects?

     
  12. Michael Gibson, 12. December 2018, 6:56

    Thank you, Blimey – I have just forwarded your comments to my three Ward Councillors so that they can find out the answers.

     
  13. Farmer Bill, 12. December 2018, 8:52

    Justin Lester has not been talking to Carterton mayor John Booth. The Carterton Event Centre is open for business and what Carterton lacks apparently is ‘accommodation’. Therefore this week’s proposal is to sell, at $1, a piece of Council land nearby to build a 100 bed hotel so delegates don’t need to stay at the Masterton Copthorne Hotel. They could of course stay in Wellington and use GWRC’s heavily subsidised rail service.

    Clearly, everybody in the region wants conferences! Just how big is the future pie going to be? Are we all (mainly Councillors, CEOs and planers no doubt) going to be going to conferences on this and that in everybody else’s town/city “to boost the local Gross Domestic Product” by a BCR of 5:1.

    I think CEOs and bureaucrats must think we are all stupid to buy into this rubbish. Me, I’ll stick to farming and just pay my ever increasing rates bill.

     
  14. Sekhmet Bast Ra, 12. December 2018, 14:00

    In response to aom: Nice piece of dirty politics associating us with the idea of “the demise of DOC workers”. While we do seek the consignment of ‘predator free’ collective psychosis to the looney bin where it belongs, dealing by whatever means with individual DOC staff would in our view be counterproductive. Our position on illegal acts of protest may be read on the front page of our website where we have stated: “Take notice Feline Rights will share intelligence on any illegal protest activities we hear about from both the pro-Cat lobby and the environmentalist faction with the New Zealand Police at first instance”.

     
  15. Benny, 12. December 2018, 14:14

    Conferences, at a time when more and more people engage in video-conferencing and mobile working, seem quite outdated. Even more so when fighting climate change should take precedence on anything we do (we’ve got 10 years to change our way of life dramatically): such a conference centre would mean people needed to travel to Wellington, thus increasing emissions. Once again, the environment has become a secondary consideration in the face of economic growth. Additionally, this would create more pressure on the housing market, which doesn’t need this right now.

    I’m not against a convention centre, but it seems to me there are way more urgent things to do before that, rather than building something that could aggravate the issues we are facing.

     
  16. Bernard C, 12. December 2018, 15:15

    Climate change has always been a constant throughout history . So let’s not worry about the climate change and just see the building of another unneeded convention centre as showcasing the ongoing mega stupidity of the council.