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Majority of councillors vote to support Convention Centre; ‘huge win’ says mayor

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The Wellington City Council voted 13/2 last night to approve a deal to support a new purpose-built Convention Centre which it will lease from developer Mark Dunajtschik. The convention centre will be operated by the Hilton Corporation.

Mayor Celia Wade-Brown said the decision was a huge win for the Capital’s economic development, providing revenue and jobs for at least the next 20 years under the terms of the lease.

“I’m very pleased the Council has approved this deal by a wide margin,” she said. “This decision makes it clear the Wellington City Council is active in the economic development of the Capital.

“The Council is enabling a project that will protect and generate around $21 million a year net GDP benefit to the Capital. Construction will begin within months and the Wellington Convention Centre will open its doors in 2017. We’ll be well ahead of proposed developments in Auckland and Christchurch,” she said.

“The New Zealand convention market is also expanding, supported by Tourism NZ. A smart new building opposite Te Papa will be a huge improvement to the current gap in the urban fabric.”

The state-of-the-art 4400 square-metre facility would be able to host up to 1200 conference delegates and have a banqueting capacity for up to 1450 people. In theatre style seating, the facility can seat 2000 in the largest space.

The overall project will be financed by local developer Mark Dunajtschik, who is building it along with a 165-room hotel on the site in Cable Street. The Council will lease the convention centre at a forecast average net cost to the city of about $2.1 million a year over the lease term.

The Council’s Economic Growth Committee Chair, Councillor Jo Coughlan, says this investment will inject cash, jobs and marketing opportunities into the Capital’s economy, as well as protect the benefits received from our current share of country’s convention market.

“The numbers confirm how important this deal is to Wellington. Currently our convention market generates $146 million per year and supports over 1000 full time jobs.

“This new facility will grow jobs by over 200 full time jobs and add $28.6 million in new expenditure, and will drive growth across associated areas like hospitality, tourism and the service sector,” she said.

Deputy Mayor and Governance, Finance and Planning Committee Chair Justin Lester said the Wellington Convention Centre will provide great spin-offs for the Capital, both internationally and on the home front.

“Having a strong, established and trusted brand in the Hilton managing the Wellington Convention Centre is a superb marketing asset in international markets. It’s exciting that our tertiary institutions have voiced their strong support for this development. In particular, there are great opportunities for hospitality and tourism sector students to have hands-on experience in one of the world’s most notable hotel brands,” he said.

Public consultation was in favour with the majority of submissions, including the Employers Chamber of Commerce, the Retailers Association and the Property Council voicing support for the Convention Centre.

A report on the consultation on the City Council’s proposal is available here: http://wellington.govt.nz/have-your-say/public-inputs/consultations/closed/convention-centre

Cr Ritchie: Deal may have flouted the law

BusinessDesk report by Jonathan Underhill
The Wellington City Council has signed off on a 165-bed Hilton Corp hotel and convention centre in a deal with a local developer Mark Dunajtschik which it says will give the city low-cost, low-risk access to a facility that will add jobs and boost the capital’s economy.

Under the proposal the council will pay what it says will be an averaged $2.1 million a year to Dunajtschik under a 20-year lease on the convention centre; the costs will be higher in the first few years until they are offset by hoped-for profits from events at the centre.

The council says building the Cable Street convention centre itself would have cost $55 million , with annual running costs estimated at $5.7 million. There is some risk to the city if the centre doesn’t perform as expected, it said. A report from council officers said the worst case scenario was a cost of $4million a year for twenty years.

Dunajtschik will finance the development with the Wellington Convention Centre slated to open in 2017. It will be a 4,400 square metre facility able to host 1,200 people and have capacity to host 1,450 people at a banquet.

The council hopes that the new facility will attract 64 new events a year, adding about $21 million to Wellington’s annual gross domestic product and directly creating 200 jobs.

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