Five stars come at a price for ratepayers

Hotel and conference centre to cost ratepayers

KATIE CHAPMAN
Last updated 05:00 20/06/2014
proposed Hilton Hotel
Supplied/ HBO+EMBT

BY NIGHT: An artist’s impression of what the proposed Hilton Hotel and conference centre in Cable St would look like. It would be able to host up to 2500 people.

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Does Wellington need a hotel/conference centre at $2m a year in ratepayers' costs?

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Not sure - need to see more details.

No - it'll turn out to be a white elephant.

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A five-star Hilton Hotel and conference centre for Wellington would cost ratepayers $2 million a year.

Details of the price tag for the proposed inner-city development have been revealed, and they show that developer Mark Dunajtschik will bear the more than $100 million cost of building the 165-room venue, which will be managed by the Hilton chain.

But Wellington City Council has agreed to a 20-year lease of the convention centre. While the annual lease cost has not been disclosed, the business case puts the after-profit bill for ratepayers at about $2m a year.

Of that, 60 per cent would come from general rates and the rest from the downtown levy paid by central city businesses - meaning a cost of less than $10 a year for the average ratepayer.

The cost would amount to roughly the same as the council spends on its library collections each year.

The business case found the conference facilities would bring about $30m a year to the city in economic benefits, and about 200 jobs.

It would be able to host up to 2500 people, making it the second largest convention centre in the country. Dunajtschik was hopeful it could open in 2017.

Wellington Mayor Celia Wade-Brown said the proposal stacked up well for the city, and the cost of doing nothing was too great. Competition from planned conference centres in Auckland, Christchurch and Queenstown meant the capital would lose up to $25m a year in business to other centres with better facilities, economic growth and arts committee chairwoman Jo Coughlan said.

"The do-nothing just isn't an option, we just won't be able to attract those higher-spending conference and convention-goers from offshore."

Deputy Mayor Justin Lester said the public-private partnership allowed the council to get the benefits of a new conference centre without paying about $55m to build it."

Previous attempts to build a Hilton in Wellington have faltered because of public opposition, but Wade-Brown said the proposed location opposite Te Papa was not sensitive, and should not require a public notification process.

But the council would be consulting on whether to agree to its involvement, she said.

The hotel and conference centre was expected to result in 68,000 "delegation days" a year, which could lead to more hotels being built, and development of further cafes and restaurants in the area, she said.

A spokesman for Dunajtschik said arrangements with the Hilton and the council were continuing, with the aim of being open for business in 2017.

Having the Hilton on board meant the city could tap into the internationally recognised brand, he said.

He saw it as a beneficial project for all involved. "This is the most economic way that the city can get a conference facility."

Wellington Employers' Chamber of Commerce chief executive Raewyn Bleakley welcomed the project, and said the business case sounded promising. "Having a local successful developer, along with the Hilton brand, shows a lot of great work has been done to this point . . . Done properly it has the potential to be a real drawcard . . ."

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Hospitality Association Wellington president Jeremy Smith also welcomed the project, saying it would have positive spinoffs.

 

BY THE NUMBERS

More than $100m to build the Hilton Hotel and conference centre.

$2m cost to ratepayers a year, over a 20-year lease.

165 rooms.

Capacity for 2500 people in the conference centre.

$30m economic benefit each year to Wellington.

4400-square-metre space.

200 new jobs.

WHAT HAPPENS NEXT

Wellington City Council will put the proposal to be involved in the project out for public feedback from July 8 to August 8.

If agreed, the developer will apply for resource consent, which is unlikely to require a public notification or hearing process.

The centre could be open for business in 2017.

- The Dominion Post

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