The centre that rules the city
Time to sober up? With the proposed new convention centre and covered rugby stadium, the mutterings are that Christchurch has got rather carried away with its central-city rebuild plans.
"Why are we talking about a $300 million convention centre and $400m stadium at a time when we're broke? It's a nonsense," remarks one insider with a prominent role in the city's events industry.
"I can understand that we are trying to seize the opportunity of a blank canvas here," he continues, "but we're a very small city, only 350,000 people - in many ways just a large farming village. So with these kinds of facilities, it's hard to see how we can afford them, how they will be viable."
Another informed source - again speaking off the record, as now is not a time to be sticking your head above the parapet, he says - points out that the Government is only just now hiring someone to write the business case for the convention centre, even though it has already begun compiling a shortlist of the developers and contractors to build and run it.
"That tells you nobody's done a proper feasibility study yet," he says. It is all seat-of-the-pants, back-of-an-envelope thinking so far.
Few question that the Government's Christchurch Central Development Unit (CCDU) did the right thing in sticking a stake in the ground, making the bold decision to place a set of anchor projects in the city's best locations.
The old convention centre was a rather anonymous glass-fronted box in Kilmore Street, an exhibition space connected by an air bridge to the Town Hall. Nothing special. Certainly not a city landmark.
The new convention centre will sit on four times the land and have absolute pride of place - a picture- postcard site as the CCDU describes it - with its front door opening on to Cathedral Square, its back door facing Victoria Square, and a new riverside pedestrian precinct wrapped around its flank.
Gloucester Street will be swallowed up to become a galleria and a couple of expensive hotels will be included as part of the whole complex. As a city landmark, you won't be able to miss it.
Likewise, the new stadium will be shifted as close to the central business district (CBD) as you can get. What was the AMI stadium will sprawl across nearly three blocks in Madras Street.
The architect's impression shows a ground for 35,000 housed by a sweeping roof - large enough to meet rugby board stipulations for the future hosting of first-class matches like the All Blacks against the Wallabies.
The locations definitely look great. The earthquakes make it possible for the CCDU to have its pick. But the cost and size of the facilities appear quite another matter.
From the start, the Government has been surprisingly insistent on their scale, saying both fit into national strategies.
Before the earthquakes, Christchurch had what was, in fact, the country's only dedicated conference centre. A plan to double its size had already been developed. And the Government then wanted conference centres in Auckland and Queenstown - the other New Zealand cities with good international flight connections - to tap the world market in business tourism.
The three would form a natural hierarchy. Through the notorious SkyCity "pokies swap" - a deal still on hold, awaiting a report from the Auditor-General - Auckland would get the national centre, able to host multiple conferences with a 3500-total- delegate capacity.
Queenstown would build a 750-delegate facility - Queenstown Lakes District Council has a working party considering that at the moment. Christchurch could then fit in the middle with a 2000-delegate facility. The proposal is for the ability to host one 1000-delegate meeting and two 500-delegate ones concurrently.
It all sounds very organised. And likewise the proposed size of the new rugby stadium was simply to fit a national hierarchy where Auckland has its 50,000-seat Eden Park, Dunedin its 30,000-seat Forsyth Barr stadium, and so Christchurch, as New Zealand's second city, would sit about right at 35,000.
Smaller, as it happens, than the 39,000 AMI stadium that would have been boosted to 45,000 for the 2011 Rugby World Cup.
Yet people are asking how far these national strategies should dictate Christchurch's rebuild, especially when the Government seems to be expecting Christchurch ratepayers to pick up most of the tab.
Christchurch City Council has said it will put $220m towards the cost of the convention centre, $30m of that being from the insurance payout on the old one. But so far the Government has been tellingly silent about the $70m balance.
So, over-ambitious? In truth, the anchor projects are not a done deal.
CCDU director Warwick Isaacs admits the drawings released as part of the Blueprint announcements in July were "conceptual", something concrete to put out to the market and likely to be changed in response to what the market says. So there is plenty of opportunity to get the size and costings right.
"All we've really said is that bit of land is where it's going to be. But if you think it should be bigger or a little smaller, if you have a different business model, then tell us."
And Isaacs says the reason for starting the bidding process at the same time as finalising the business case is to ensure the rebuild gets going as quickly as possible. The stadium is not such a rush. It will be the last of the anchor projects to be built. But the goal is to have the convention centre in business by March 2017.
Isaacs says the CCDU is looking for partners to take a stake in the convention centre, firms that might put private money into the project if they can see a commercial return. So another good reason for having interested parties involved at an early stage is that they will be able to help shape the actual business plan.
If the Blueprint design is an unrealistic proposition, he says, this will be the fastest way to find out. Many were mystified that a convention centre was the No 1 priority from the start of the recovery. Even the council put it top of its list while it was still in charge of the draft central city plan last year. Why is one so needed?
Christchurch Hospitality Inc (CHI) spokesman and bar owner Max Bremner says the convention centre decision is key, just because the big hotel owners have to know where it is going to go before they can make their own rebuild decisions.
Before the quakes, tourism was a $2 billion-a-year business, supporting 12 per cent of Christchurch jobs. Bremner says with the likes of the Crowne Plaza, Grand Chancellor and Holiday Inn all demolished, the city has lost about three-quarters of its beds. As an industry, tourism has been hit about the hardest. So the convention centre is a priority just to kick-start ordinary tourism.
"The convention centre's a must as it goes hand in hand with the hotels. Then the bars, restaurants and retail all flow on from that decision."
That explains the urgency to name a location. But the size of the new convention centre reflects the feeling that New Zealand has been too long missing out on the even more lucrative business tourism dollar - what is known internationally as the meetings, incentive travel, conventions and exhibitions (Mice) industry.
In a series of reports in 2009, 2010 and 2011, the Ministry of Business, Innovation and Employment (Mobie) - or Ministry of Economic Development, as it was - has hammered away at the need to catch up with other countries like Australia, Canada, Singapore and Hong Kong.
All these nations have been building lavishly, although industry pundits say Australia has probably overdone it. With every state in competition, its convention centres have just kept getting bigger. Sydney is in the middle of commissioning the latest A$1b upgrade of its Darling Harbour precinct so that it can cater for 40,000 sqm of exhibition space and up to 10,000 conference- goers.
However New Zealand has the chance to create a more orderly national network. And the figures demonstrate the investment can be worth it.
Simon Milne, director of Auckland University of Technology's (AUT) tourism research institute, says while convention centres do not pay for themselves directly - conference fees rarely repay the capital building costs - they do have a payback both in terms of general visitor spending and in other economic intangibles such as connecting a city to the world.
Surveys show that where the average tourist visitor to New Zealand spends $117 a night, a conference delegate spends $424. Somewhat surprisingly, they also stay longer. Conference delegates stay on average 8.4 nights compared with 5.4 - with the further bonus this tends to be in tourism's shoulder months rather than peak season.
"There's no doubt that people who travel for conferences are high spenders who usually have some kind of expense account that then also frees them up to spend some of their own money too. They are often not just coming for those two or three days, but will add on some extra time, especially if they're coming to a place like New Zealand," says Milne.
Internationally there is a circuit, he says. With professional associations, especially, every year they want to hold their meeting in some new city. So New Zealand just has to claim its spot on that map to boost its export earnings.
Indeed, before the earthquakes, Christchurch had already established a place in this market, even if was in a typically Kiwi budget fashion.
As said, most locals hardly knew the old convention centre was there in Kilmore Street. From the moment it was first proposed as a council-subsidised venture in the mid-1990s, it was dubbed a likely white elephant and so no one wanted to see much money spent on it.
The land and building cost just $20m. With the the 2500-seat Town Hall auditorium conveniently across the road for any large sit- down plenary session, it did not need to be much more than an extension providing exhibition space, meeting rooms and catering. So a cheap deal as convention centres go. And the critics were confounded because, by the 2000s, it was struggling to keep up with demand.
To the public, it did not mean anything much that one week it might be the 34th International Congress of Physiological Sciences, the next the New Zealand Financial Planning and Investment Advisers Association. Yet businesses in the city could see the difference. "If there was a big conference on, you could tell it in the restaurants and bars," says CHI's Bremner.
Council figures showed that the visitor spend directly attributable to the convention centre ranged up to $100m in good years. Well worth a capital outlay of $20m.
In 2009, the council put forward a plan to double the convention centre's capacity by tacking on a $45m duplicate at the back.
Some land had been negotiated, and while the L-shaped addition was not going to be pretty, and there were concerns about the extra pressure it would place on the Town Hall, there was at least the opportunity to build on a nicely growing earner for the city.
Now, following the shakes, there is clearly the chance to do it properly. Not just put a convention centre in a public precinct with large tourist hotels directly attached, but to build one with its own plenary session auditorium.
Overseas research shows delegates hate being split over a number of buildings. They like to stay in the one cosy space. Conference rooms also have quite different acoustic and technological needs than a concert hall.
However, there are risks in making something too big.
AUT's Milne says the dramatic rise of business tourism over the past 15 years was tied to good economic times and the conference industry has seen flat growth since the 2008 global financial crisis. "The first things to go when businesses have to cut their expenses are workshops and conventions."
Technology is a threat to the whole future of conferences, as is the rising cost of fuel and airfares. And, with many cities having over-built, chasing the same business in "me too" fashion, rates are being slashed just to fill facilities.
Milne says the sector doing best is the small conference of less than 500 delegates. So the smart strategy for Christchurch might be to target the boutique, high-end conference circuit.
He says this is where the CCDU's precinct approach could pay off if Christchurch builds something not too large, but attractive because of its intimate small-city setting. Christchurch has the competitive advantage of being an easy ride from the airport, a gateway to spectacular natural scenery, and a central city that can again be beautiful and distinctive.
All the things a travel weary conference-goer wants. Compare that to the Auckland SkyCity plan says Milne. A square block attached to a casino in congested streets without a view.
Well-designed convention centre precincts become a place for the public too. Milne says Christchurch people may have had no particular relationship with the Kilmore St convention centre, but in other cities they do become a civic focus.
In Canada, for example, Montreal's convention centre straddles a motorway which had previously split the old town from the new. "It's become a great way to bridge the two parts of the city, bringing people through from one side to the other."
Milne says Vancouver planted a wacky coastal grassland on the roof of its harbour front convention centre. "It's beautiful and unique. It's important to get the public to embrace the building and see it as something they share, rather than just something a bunch of business people come to for a conference."
But still there are those urging caution, the insiders who argue that unless the Government is willing to pay the extra out of its own pocket, Christchurch needs to avoid being swept along by the dictates of some national strategy.
For a start, it would be naive to expect too much NZ Inc style co- operation from Auckland if the SkyCity deal goes ahead.
"SkyCity will be a purely commercial operation. It's 3500 capacity won't make a difference. It'll need to get the smaller conferences too if it's going to make it pay, so it'll be looking to grab business from Christchurch wherever it can," says one critic.
And the reality is Christchurch faces a long haul just to get back to the number of conferences it was hosting prequake.
"International conferences have a five or six year lead-time. It will take time to build up. So how can we justify building something three to four times bigger when we'll be starting from scratch all over again?"
Although he admits he is hearing the convention centre may be developed in stages. "If they are starting smaller and reserving the land for future expansion, well that would be sensible."
Done right, the convention centre precinct clearly has potential. It will anchor an industry of probably more value than most people realise. And while architecturally it is unlikely to be anything too special - there is just not the cash for that - it could still become one of Christchurch's more pleasant public spaces.
The rugby stadium seems another matter.
Massey University lecturer in economics Sam Richardson, a researcher in sports spending, says history is littered with examples of cities getting carried away when building sports facilities or hosting events.
Dunedin's covered stadium is the one everyone is talking about at the moment. "But you've got many other high profile examples like the world rowing championships, or the V8 races in Hamilton."
Richardson says there is a genuine case for splashing out simply because a big show is what people want. "There's a valid public good argument. The feelgood factor is hard to put a number on."
But where it gets murky is that rarely are the actual numbers on construction costs and gate revenues reliable. "Whatever a stadium costs usually ends up at the high end of the scale of what was predicted, while the commercial benefits end up at the low end." So the public are right to be cynical, he says.
Others are saying that big stadiums might be demanded by rugby union authorities, but that seems like the tail wagging the dog. A new Christchurch stadium is going to be a 30 or 40-year investment, and with improvements in broadcasting over that time, a better idea might be to build smaller and charge more.
Rather than a stadium that fits a 10th of a city's population, yet is full only once or twice a year, why not create a scarcity value so that ticket prices guarantee a facility able to pay its own way?
So is a sober reassessment needed? As with the convention centre, the CCDU's Isaacs again takes the relaxed view.
The city needs to build both, nobody is questioning that, says Isaacs. And the locations have to be definite, because both projects are starting points for what will get built around them. But nothing is finalised about scale or design.
The speed of events can create the impression of grand plans being plucked out of thin air Isaacs agrees. However, as with the convention centre, the CCDU is normally picking up on ideas that have been widely discussed prior to the quakes. And the proposals will continue to be fine-tuned through conversations with the council and Christchurch's business community, Isaacs says.
"We're not trying to force a view. We're saying this is what, as a government department, we think it should be. But if there's a better way, then we want to know about it."
- © Fairfax NZ News
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