The old, run-down “Opotiki Market” building on the main street will soon be replaced with a sparkling new two-storey commercial building costing up to $4.5 million.
Opotiki District Council staff have recommended the council replace the two adjacent buildings with a single storey, however, councillors have dismissed this option.
The main discussion at their meeting on Tuesday was whether the top floor should be commercial or residential.
The council has secured enough funding for a single level building through the Provincial Growth Fund so the two-storey option will require it to take out a loan.
Strategic development officer Sarah Jones told councillors she recommended a single storey building because it could be built within the PGF budget with some left over for other projects.
There is also more flexibility with the floor plan, which would encourage a wider variety of tenants, and it could be constructed more quickly so would have less of an impact on the main street.
She feels a two-storey would detract from the landmark new library building being constructed two lots away.
Both lots are considered earthquake prone and are currently being leased by three tenants, who each pay between $80 and $200 per week. None of them cover rates.
Once councillors were assured a two-storey building could get a resource consent as quickly as a single-storey the debate moved on to what the top floor should be used for – commercial or residential.
Councillor David Moore says he doesn’t believe a two-storey will detract from the new library building and says having the top floor as residential would help address Opotiki’s housing shortage.
Deputy Mayor Shona Browne notes that in the past the site had been well utilised and says she believes there should be retail below and commercial offices above.
“We are having a lot of businesses coming to town that don’t need a street frontage."
Jones says there are a lot of vacant shops in town that were run down and needed development.
If the council “did less” this might encourage private building owners to do up their buildings to encourage tenants.
She says this might get the town in a better place, faster, than if council did it all itself.
Browne says it's time to target future growth and it was a good idea for the council to lead the way.
“Businesses are waiting around to see what’s happening."
Councillor Barry Howe agrees with Browne, but suggests the council use the top floor to provide accommodation for staff as a recruitment incentive.
This idea was not supported by many, as they felt it would add a layer of legal responsibilities the council had no experience with.
It was decided the council would build a two-storey commercial building using $3 million from the PGF and up to $1.5 million in loan funding.
The funding agreement between the council and the Ministry of Business, Innovation and Employment states the council must appoint a design team by December, award a construction contract before June 2021 and have the build completed by April 2022.
Jones is seeking expressions of interest from prospective tenants. In her report to council she said if the council chose the single-storey option there would be no financial pressure to let the space as there was no capital cost to the council with no debt to pay.
However, given the councillors chose the more expensive option it can be assumed there is now financial pressure to find tenants.
While some of the rent will go towards financing the loan the rest must be used to finance the library.
This because of an agreement with the Opotiki Mechanics Institute which transferred the land to the council in 1969.