ILT announces $40 million hotel for Invercargill

The Dee St-Don St corner where the new ILT hotel will stand proud.
Kavinda Herath

The Dee St-Don St corner where the new ILT hotel will stand proud.

Downtown Invercargill is to have a $40 million Invercargill Licensing Trust hotel on the south-east corner of Don and Dee Streets.

The first stage will be an 80-room hotel but it will be designed with capacity to readily add another 40 rooms when demand warrants.

Potentially standing six storeys high it will incorporate the former Deka store on Dee and will reach back on Don past the Kiln to the one building the trust didn't already own but has only now negotiated to buy, the former Southshore Insurance building at 11 Don St.

The first stage will include car parks, conference rooms and a restaurant.

READ MORE: Momentum building for new hotel in Invercargill

The long-awaited announcement has long been acknowledged as a crucial feature of the overarching project by the Invercargill City Council, business and community groups to revitalise the central business district.

ILT general manager Greg Mulvey said the plans for the building's construction were already under way.

"It's happening now – like right now.

"The board has unequivocally said we are going ahead with the new hotel."

Mulvey said the first issue to consider would be the demolition of the current buildings on the proposed site of the planned hotel.

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"We've undertaken preliminary work on getting advice for demolition preparation, and will be immediately putting a plan to the Invercargill City Council for demolition consent."

As well as this, plans for the architectural design of the building would have to be finalised.

Mulvey said while it was difficult to predict when construction work would actually start, the physical build would take between 18 and 24 months.

Building costs would also be difficult to nail down precisely, Mulvey said.

"It could cost $40m for the first stage of the plan."

The decision to ensure capacity to add a further 40 rooms was based "to a degree" on the Ascot Park model, where two blocks of rooms had been added since 1980.

"We just clipped them on, it was a very successful approach."

Mulvey said part of the reason for the delay in finalising the site for the hotel was due to the need to find one that was large enough.

"We already owned all of the area, with the exception of . . . Southshore Insurance at 11 Don St.

"We needed that building – although we had enough to build, the new land gives us an opportunity to futureproof."

Mulvey said the Don St site was preferred over other options because it met several "imperatives" for the building.

"It had to be visually appealing, it had to be of a scale and size to accommodate future expansion, it needed adequate internal parking."

Mulvey said while the board was aware of the public desire for the new hotel, it was only recently that it believed the timing was right.

"We've been eyeing this opportunity for several years, hoping there would be an economic justification for it.

'It's only really been the last 12 months . . ., up until recently we couldn't justify it.

"The boom in tourism across New Zealand has been the major catalyst, and we're relying on the Queenstown and Central Otago tourism spinoff continuing.

"We're also relying on Invercargill being more effectively marketed and promoted.

"We've been saying for a long time that Invercargill hasn't been getting it's share in the tourism boom – so the promotion of the city is critical for the viability of the venture."

However, economics was not the only factor influencing the decision, Mulvey said.

"We're also doing it as part of our original mandate for the city of Invercargill – the development itself is a contribution to the community."

Mulvey said it was important for the ILT to lead the way for the city's rejuvenation, while maintaining itself in an economically sustainable way.

"The ILT is the major contributor to many local organisations – who are relying on our donations.

"We don't want these decisions to have a big effect on them."

Mulvey said he hoped the decision would help kickstart the rejuvenation process across the city.

"Will hotels on their own bring people to Invercargill? No.

"But it will add to the key elements of its rejuvenation.

"The board of the '60s had the courage for the development of the Kelvin, and the board of the '70s had the courage for the development of the Ascot.

"We think the time is right for another bold step."

 - Stuff

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