Progress for Wellington convention centre proposal

Wellington City Councillors will vote next week after being briefed on a purpose-built convention centre and five-star Hilton Hotel proposed for a vacant site opposite Te Papa.

Mayor Celia Wade-Brown welcomed the proposal, saying the convention centre is a transformative project that will keep Wellington ahead in the conference market.

“We’re shifting the game with the convention centre proposal,” says Mayor Wade-Brown. “If agreed to, this convention centre proposal will be a great investment in Wellington, and we’ll have a purpose-built five-star facility to help spur the Capital’s growth, contribute to NZ Inc and draw on the Government’s international marketing clout.”

If given the go-ahead, the state-of-the-art 4400 square-metre facility would be able to host up to 1200 conference delegates and have a banqueting capacity for up to 1450 people. It would be built along with the 165-room hotel on the site in Cable Street.

The overall project would be financed by local developer Mark Dunajtschik. The Council would lease the convention centre at an average net cost to the city of about $2 million a year over the lease term.

“We’ll be asking Councillors to vote to take the proposal out for consultation,” says Mayor Wade-Brown. “Today was a chance to lay out the detailed business case and the process we’ll use to consult with ratepayers on a plan that could bring $30 million in new expenditure to the city each year and directly create at least another 200 jobs.”

The convention market earns more than $140 million for the city each year and supports about 1000 jobs, but Mayor Wade-Brown says without investment in purpose-built convention facilities, the city could lose a lot of that economic activity.

“Our facilities, while individually attractive and good for boutique events, are too small and, in some cases, too old, and lacking the flexibility needed for the modern convention market. With new convention centres being built in Auckland, Christchurch and Queenstown, we stand to lose a big part of our existing business.”

Deputy Mayor and Governance, Finance and Planning Committee Chair Justin Lester says the proposal is a cost-effective way to secure a large and modern convention facility with little risk to ratepayers.

“The Council is working with a leading local developer prepared to invest all the capital and carry most of the risk – for our part, the city would lease the new convention centre and the Hilton hotel chain would run it.”

The Council’s Economic Growth Committee Chair, Councillor Jo Coughlan, says the proposed convention centre is the first of the Council’s ‘8 Big Ideas’ to get to this stage and is a catalyst project for the City Council’s Growth Agenda.

“This is a great opportunity for Wellington and a significant investment which would see an additional $20 million in GDP growth per year.

“The eight ideas all support and build on one another and the convention centre proposal feeds into the proposed film museum, the tech precinct and the airport extension.”

If the Council votes next week to support the proposal, a formal consultation period would run from 8 July to 8 August and be supported by a range of information. During that time, negotiations would continue with the developer and Hilton. “The aim is for the Council to be in a position to make a final decision in September,” says Cr Coughlan.

“Wellington has two choices – we can do nothing and accept we’ll lose up to $25 million a year of economic benefits from the convention sector, or we can partner with Hilton and have an international convention centre which will see us continue to grow and compete.

“The proposal being considered by Councillors would give us a purpose-built strong modern offering for a relatively small cost,” says Cr Coughlan.

An overview of the economic case supporting the Convention Centre

• Wellington is currently the country’s second largest convention destination behind Auckland, making up 15 per cent of the country’s total convention market and earning more than $140 million for the city each year.

• If we do nothing, we could lose up to 17 per cent of that business when other newer facilities are built around the country – that’s up to $25 million in lost business and about 170 jobs.

• This new purpose-built centre would protect that business and, we estimate, grow the overall business I Wellington by about 10 per cent – about 74 new events delivering 68,000 delegate days each year..

• As well as protecting the existing market and jobs, that growth would add $30 million in new expenditure and directly create more than 200 new jobs.

• We expect flow-on secondary development to occur in time in supporting businesses such as entertainment, hospitality and retail.

• A 5-star Hilton would help attract premier industry events to the Capital and support other economic development initiatives such as the proposed film museum and tech precinct.

• We get this for an average net cost to the city of $2 million a year over 10 years on our base operating projections (after accounting for profit share and rates income).

• It would cost the City Council at least $55 million to build a convention centre itself and at least $1.7 million more a year to run – the city would carry all the cost and associated borrowings, and all the risk.

Some details and background information

• The developer is Mark Dunajtschik - an established and successful local developer with a demonstrated commitment to Wellington

• New 165-bed 5-star hotel and purpose-built conference facility with full-format conference hosting capacity of up to 1200 delegates and banqueting capacity for up to 1450 people. In theatre style seating, the facility can seat 2500 in the largest space.

• At the time of completion, the new venue would be the second-largest convention facility in the country and would be completed before the other convention capacity becomes available in other parts of the country

• The venue would be branded, marketed and managed by Hilton which would give Wellington international exposure - and confidence that new events will be attracted to the Capital.

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