Queenstown's growth poses problems

Queenstown Lakes is one of New Zealand's fastest-growing regions but growth creates its own problems. Is more tourism the answer? Would a monorail to Fiordland help? PHILIP MATTHEWS talks to two locals with different visions.

To Queenstown, where houses and hotels are perched on the sides of the lake like seating in a stadium.

Two weeks before Christmas the news is all about drug busts in Wanaka, big property sales in Queenstown and getting Lakes District Hospital ready for a summer of alcohol and synthetic-drug casualties.

Party town. The papers are full of hospitality jobs and tourism offers, celebrity bartender interviews and club promotions. The weather is unrelentingly brilliant. International staff in cafes compare hangovers ("Two Red Bulls should do the trick"). It sounds and sometimes looks like Sydney.

Queenstown is like an autonomous zone, dedicated entirely to retail and pleasure, set apart from the rest of New Zealand. You enter the bubble at Cromwell and, when you leave at Kingston, it's like running The Wizard of Oz in reverse, from bright colour back to black-and-white.

What could ever bring you down to earth here? Maybe some news about local government.

This summer, the Queenstown Lakes District Council is thinking about whether it wants to spend $50 million on a convention centre. The question has broader implications than just another civic building project. It comes with questions about what kind of place Queenstown is and what kind of place it wants to be.

Adam Feeley is a good person to ask. Last year he packed in his job as head of the Serious Fraud Office and brought his family south. Bright, lively and candid, Feeley appears to have spent a year putting a rocket under the council as its new chief executive. He cut costs, restructured the management team and laid off staff.

Before busting white-collar crime, Feeley was chief executive of Eden Park. Did he come to Queenstown in search of the quiet life?

"I've been working harder here than at any time in my life," he says. "But overall you don't see many people working after 5pm. I'd say that of anywhere outside Auckland. You could shoot a gun down the main street of Dunedin after 4.30."

But, on the other hand, Queenstown is also a 24-hour town. Shops open late, hospitality runs all hours and the self- employed work when they can. Yet another way in which Queenstown is an unusual case.

For about 10 years, Queenstown Lakes has been one of New Zealand's fastest-growing regions. In the latest census, its growth is second only to Selwyn which may or may not be just a suburb of Christchurch with quake overflow.

Growth predictions in the council's long-term plan have the resident population growing from 28,440 in 2011 to 35,905 in 2021. Population on an average day will grow from 46,612 to 56,517. On a peak day, the leap is from 89,346 to 108,970. It is noted that the district has a relatively small number of ratepayers to support them - just 22,000.

Resort towns have problems peculiar to them. Take the census. If you are staying in a hotel on census night, you are excluded from the resident population. Yet that tourist will be replaced by another and another, creating a permanent population of tourists.

"When people pull census data, they say there's no need to upgrade hospital facilities in Queenstown because that's the population. I go, 'No, add another 10,000 people to it'. They're skiing, they're mountainbiking. They're getting injuries and using our hospital facilities.

"We're a metropolitan centre. On a big day, we're well over 100,000 people. Everyone's talking about Auckland's cost of living. This is the most unaffordable housing in New Zealand."

According to figures compiled by interest.co.nz, the average house in Queenstown Lakes costs 8.74 times the average local income. This puts it ahead of central Auckland and the North Shore. The New Zealand average is 5.33.

And incomes are lower here. Queenstown's median household income is $73,512. In Auckland it ranges from $78,449 in Manukau City to $89,221 on the North Shore.

Yes, tourism creates tourism jobs but "it's not the highest-paid industry and it attracts a lot of transient people", Feeley says. And when your kids get to 16 or 17, they take off.

Another danger in having so much invested in tourism is that a war or Sars outbreak could ruin the local economy overnight. Better to diversify, but to what? In the hope of finding out, the council commissioned an economic development strategy from economist Ulf Schoefisch and consultancy firm Martin Jenkins. It should be finished in March.

As Feeley sees it, local government has tended to lack an economic development perspective. Central government relies on Treasury but local government is less economically literate.

The case for the convention centre 

A tourism town can be a complacent position. When Adam Feeley walks down Shotover St these days, he finds it looks a bit tatty. Where are the Prada and Gucci stores you expect at high-end resorts? He hears that some of the tourists with real money  skip Queenstown and head straight ovnte to Blanket Bay and skip Queenstown entirely.

"How many smartly-dressed tourists do you see? I'm not saying backpackers are a bad thing but their spend per night is probably a tenth of what we could be getting out of an average spend in this district.

"I think we’re complacent about what we’ve got. Tourists will take it on any terms. A lot of Kiwis travel when they’re young and then stop having a tourist perspective on their own country.’’ 

A case in point: he was in Korea not long ago and everyone was talking about Lydia Ko not Middle-earth. 

"What will bring a lot of Asians down here is a better empathy with language issues and food.

"Peter Jackson is an amazing guy in what he's achieved, but it’s just a movie. We may get excited about it but I've seen lots of great movies from great locations –  I don't hop on a plane and go to that place.’’

It's no longer just a numbers game. It’s about "quality" of tourists rather than quantity. How much "spend" does each tourist represent? Which brings us back to that convention centre and its business-class tourists. 

The idea sprung from the head of Prime Minister John Key and predates Feeley’s time in Queenstown, but he is an enthusiast. 

"If you want to step-change your economy, you need a catalyst," he says. "The council will make a call on it at the end of the day but my challenge to the council is, if you don’t want to do the convention centre for whatever reasons, you have to ask yourself: what’s the alternative?"

The council would expect the Government to chip in as well and SkyCity may become a partner. In June, Deputy Prime Minister and Clutha-Southland MP Bill English reassured Queenstown that, while SkyCity was "almost a bit too positive" about the convention centre idea, the Government was not "pushing" the council into it. 

The council will decide by March at the earliest. The economic case? The advice going to the council is that it makes indirect economic sense. The best outlook is to break even on an operating basis and return somewhere between $15m and $33m per year in economic uplift. After about three years, you are pumping money is being pumped into the local economy. 

A 6-hectare Lakeview site has been earmarked, with high-end residential, retail and hospitality going up alongside it. A casino may be added. Ngai Tahu Tourism has proposed a $25m hot-pools development.

Does it sound like a no-brainer? Anecdotally, everyone wants to have their conventions in Queenstown. 

"The Law Society always has its conferences here," Feeley says. "They go crazy and spend money like there's no tomorrow."

The greater question is whether there is room for three nationally –  Auckland, Christchurch and Queenstown –  or just one in the north and one in the south. 

Feeley thinks Christchurch has "a challenging business case", although that’s just his personal opinion. That said, Queenstown’s convention centre will be relatively small –  for 800 people compared with Christchurch’s 2000 to 2500. They could even work together, with a big conference in Christchurch splitting off into a smaller group in the resort town. 

Overall, there is majority support on council. Expect 2014 to be a big year for Queenstown with much of the future nutted out. Or not? 

"The status quo is a valid option," Feeley says. "You'd have some people in the district saying let's go backwards. 

"I lived on Waiheke Island and a huge part of Waiheke wants to do that. But, if you want to better insulate your economy, without a relatively small elite and a relatively large underclass, where your children have a future, then we need to diversify and grow our economy.

"It’s an incredible place to live, bring up kids and enjoy life. How do you translate that natural advantage into something you can build an economy around?"

The case for the monorail

Over the hill in Wanaka, entrepreneur Bob Robertson is also spending summer waiting on a report. You can imagine him pacing. 

Why the holdup? Environment Minister Nick Smith said he would make a decision on Robertson's $200m Fiordland monorail project by the end of 2013 but just before Christmas – but  Smith gave himself an extension. He has commissioned a financial viability report and will let Robertson and the rest of the world know in February. 

There are worse places to wait for good or bad news. Wanaka has come a long way in the past 15 years but it still feels sedate and suburban. 

Robertson is one of the main reasons why Wanaka has come a long way. ‘‘The day we walked into town is the day Wanaka started to grow,’’ he says. 

He appeared in 1999 with a fortune made overseas  in TV infomercials. He pushed developments, sometimes against the will of sleepy locals. On at least two occasions, he threatened to quit Wanaka entirely if they didn't appreciate him. But he stayed and spent money, sponsoring local events such as the annual Festival of Colour.

"The town can talk and want to do things but do they f...... get off their bums and do it? No. It costs money and it takes know-how.’"

When he arrived, Wanaka was "a backpacker and Pinex town". Now it's all schist and flat whites.

Some property developments have come off and some haven't. A hotel development got stuck in planning complaints raised by "white knights from Auckland". A plan to develop Hillend Station was scrapped and Sam Morgan bought it for $28m.

Robertson is best known nationally for the Pegasus Town development north of Christchurch. He launched it with a hiss and a roar in 2006, selling $122m of sections in a day and building what he claims was the world's largest-scale model to tempt buyers. But, when Robertson’s Pegasus Town Ltd defaulted on a loan and was put into receivership, the Todd Property Group took over. 

The global financial crisis hit hard. He says his net assets were $97m before the crisis and are $50m now. 

In person, Robertson has an intense but not unlikeable air about him. He talks for two solid hours in the boardroom of his company, Infinity Investment Group. He acts out conversations and thumps the table to make a point. Opponents of his monorail plan are described as uninformed or even "liars", and they range from self-appointed greenies to local politicians. 

When the Department of Conservation took submissions on the monorail at the end of 2011, 287 were against and 27 were in favour. DOC has since recommended that the project go ahead. 

Save Fiordland chairman Bill Jarvie claims 20,000 people have signed petitions against the monorail. 

‘‘Half the people who signed the petition against the monorail are probably on some sort of benefit,’’ Robertson says.

 In the international media, the project has been pitched as a monorail through Middle-earth, suggesting both the tourism potential and the likely clash. 

"I class myself as greener than most of the greenies out there," Robertson says. "At Pegasus, I spent $12m of my own money creating a wetland. There wasn’t necessarily a $12m pay-off."

Opposition dogged him then too. Critics "were showing pictures of cars in a swamp with swastikas on them, saying, 'This guy’s a f...... jerk, it’s never going to happen'.

"I can find better ways of making a dollar than putting in a monorail. Why am I in this office? Do I need more money? It’s actually quite hard to spend much on yourself."

Like Pegasus Town, the monorail is an idea that Robertson bought from someone else. It was the dream of former Queenstown Airport Corporation chairman Philip Phillips but Robertson estimates that he has now spent $5m of his own money on it. 

The entire Fiordland Link Experience will involve a 40-minute ferry trip across Lake Wakatipu from Queenstown to Mt Taylor Station. Then a 40-minute bus trip on back country roads. Finally a monorail ride on 43km of track, 29km of which is through the Snowdon Forest Park. 

It should be both quicker and more interesting than the 10-hour return bus trip to Milford Sound.

Some opponents have noted that the second leg of the trip uses a cycleway, throwing dirt in the faces of cycling tourists, but the monorail is the most controversial leg. It will sit on tracks 1.5m above ground, with a pillar every 20m, travelling at about 10-15kmh.  

It's quiet –  you wouldn't hear it 10m away. It will be powered by electricity from the wind farm at Mossburn.  

"You can’t get a more sensitive, eco-friendly way of transporting people through our lands than a monorail," he says.

"‘See our native flora and fauna up close and personal."

He draws the route on a map. It ends on the shores of a lake, at Te Anau Downs. 

"I'll probably have a hotel here. Which is good for Te Anau because I'll be promoting a stay. The lake, the restaurants, the bars, the walks. I think we’ll probably put in a mini-Te Papa."

It needs 70,000 customers per year to be viable. No problem. He expects many more than that. 

"I actually have zero interest in Milford Sound,’’ he says. ‘‘Apart from the fact that I know that 500,000 people per year ply that route. And that 300,000 of them would rather go on the catamaran, all-terrain vehicle and monorail than sit on a bus for 10 hours."

If everything goes his way, the monorail should be open for business in two years. It would take 18 months to build and cost at least $200m. Is he good for it?

"Funding is easy," he says. "You can get money; $100m’s not a big deal –  $200m as long as the fundamentals are there."

The money is his headache but the environmental impact is everyone’s problem. Robertson thinks the environmental side stands up. DOC agreed the effects could be "minor". 

Yes, the odd tree will have to come out: one every 10 metres over 29km of track. What are 3000 or so beech trees compared with  the millions upon millions in the national parks?

Actually, it will be many more than that. Robertson’s own estimates, cited in the DOC report, are that 22ha of forest habitat would be cleared, which means between 10,000 and 20,000 trees, not including saplings. And those are conservative estimates. 

There is a sense of urgency now after so many years of waiting and planning. Can we afford to wait much longer? 

The statistics tell Robertson that the deeper south has been missing out. It needs something new. Of tourists to New Zealand, 45 per cent of tourists only go only to the North Island. Numbers coming to Fiordland have declined since 2008, even as national numbers climb. The Milford Sound trip has become tired.

When his version is running, "every man, woman and child in this country will benefit". The man who built Wanaka may become the man who saves New Zealand. 

"If New Zealand does nothing to help the tourism market, where is it going to go?" he asks. "We don't care about our tourists. We treat them like s...."

He sees the monorail as just one of four new ventures we need to turn tourism around. Everything is looking a bit tired. How about a sky rail through some bush in the North Island? How about smarter exploitation of the Middle-earth movies? 

"I watched the f......  Hobbit. It doesn’t even say it's filmed in New Zealand. I watched the credits on the DVD. They went on and on for 10 minutes.

"But, if it wasn’t for Peter Jackson, I’d hate to see where our tourism would be right now."

Which only makes it more ironic that Peter Jackson was among those adding his name to the Save Fiordland campaign, standing against the monorail.

The Press