Centre could hit landlords in pocket

GRANT BRYANT IN QUEENSTOWN
Last updated 10:48 25/03/2014

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Queenstown's central business district landlords could face the biggest rates hike to bankroll the resort's proposed $55 million convention centre should it go ahead.

The Queenstown Lakes District Council will consider ratings models that would be used to fund the $30.9m it will need to stump up to get the convention centre built - and council chief executive Adam Feeley has already tagged as favourite a model weighted towards CBD ratepayers.

"While a convention centre is likely to be a positive for the district as a whole in terms of economic benefit, the most direct beneficiaries of it are targeted for the most significant contribution to the cost of its development and operation," he said.

In plainspeak, the CBD would benefit the most from a convention centre, so those landowners should be prepared to face the biggest rates increase to fund it.

Under the favoured scenario, 2.5 per cent of ratepayers would face increases of between 15 and 26 per cent.

Figures show that a "high- value" CBD commercial property paying a $100,529 rates bill in the 2013-14 period would face a hike of $26,181 with a 26 per cent increase.

Under a 14.7 per cent increase on a "high-value" CBD accommodation property paying a $258,881 annual rates bill, the increase would be $38,018. Conversely, 85 per cent of ratepayers would face an increase of up to 3 per cent - about $10 to $130 a year.

The council has prepared three possible ratings scenarios. Under one, all district ratepayers would contribute based on their property's capital valuation. Under another, only Wakatipu Ward ratepayers would face increases, which would be geared towards commercial and accommodation property owners.

Under the preferred model, Wanaka residential ratepayers would face the smallest rates increase.

In an effort to present a "warts and all" financial scenario of the convention centre, the council presented a worst-case scenario of how it would perform.

Under the best-case scenario, the convention centre would generate an operating surplus of $1.6m, and under the "most pessimistic" would be $1.2m in the red.

However, the truth would probably lie somewhere in the middle, and the council tagged the centre's "most likely" performance as breaking even in its third year of operation, producing operating surpluses of about $750,000 per annum by year five.

However, even in the worst-case scenario, the council held a potential ace up its sleeve - the high- value land that surrounds the centre's proposed site, known as Lakeview for its prime position with sweeping views of Lake Wakatipu.

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"We have adopted a negative scenario for financial performance and have not factored in the very significant revenue which will be generated from the sale or development from the remaining land at the Lakeview site. Our advice is that the overall financial performance could be considerably better, and consequently the ratings impact could be less. However, council has signalled that it wishes to present a 'warts and all' picture of the potential financial performance of a convention centre."

If the council adopts the recommendations at its Thursday afternoon meeting in Wanaka, it will outline in detail the proposed convention centre's figures in its Draft Annual Plan, which will go out for public consultation in mid- April, seeking "the community's views on whether to proceed with the project."

 

- The Southland Times

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