A proposal for a $147 million hotel and convention centre in Tauranga’s CBD should be “dropped altogether”, not just paused, a resident group chairman says.

Some organisations have supported Tauranga City Council’s “good business” decision to pause, saying it is a “pragmatic” response to the current environment and the project still stands to benefit the CBD.

The council paused its plans amid funding uncertainty as central Government directed councils to “rein in the fantasies” and get back to core business, RNZ reported.

In March, the city council’s commissioners approved the preparation of a $200,000 business case to examine the costs, risks, and benefits of having a hotel and conference centre as part of Te Manawataki o Te Papa, the council’s $306m civic precinct redevelopment.

A council report at the time said the proposed nine-storey hotel would have 164 rooms and estimated the project could be worth $58.8m in benefits to the city.

“Together, the hotel and conference centre will attract a high proportion of out-of-town guests, contributing a net economic gain to the city and the wider region,” the report said.

Commissioners were also told finding funding for the conference centre would likely encourage private hotel development investment.

The council had since put the business case on hold while it investigated central government and private sector funding opportunities for the project, RNZ reported last week.

General manager of city development and partnerships Gareth Wallis told RNZ the council wanted to wait until it knew more about these funding opportunities before committing to work that might not be needed.

Mayor Mahé Drysdale said he supported placing the business case on hold.

“From the outset, this was envisaged largely as a private sector investment opportunity, with council’s involvement being as a facilitator and the landowner.”

No ‘pressing need’ for project

Phil Green, chairman of the Grace Road and Neighbourhood Residents Association and The Tauranga Club vice-president, said the proposal should be “dropped altogether”.

“I do not see a pressing need at this point in time or in the next 20 years.

“If it was financially viable, we would have it up and built by big corporates or people in the tourist industry.”

He said it was not the first time the council had pursued a CBD hotel and, in his view, it had wasted “a lot of time and money on something that is not the core business of a council to undertake”.

Phil Green - chairman of the Grace Road and Neighbourhood Residents Association - pictured in 2020. Photo / George Novak.

He did not think the proposed development would attract more people to the area as it was “only one minor cog in a vast wheel of spaces” available within the city.

Green said the Tauranga Club was a private members club and could hold events, including conferences, for up to 250 people at its location in Devonport Towers.

Wallis told the Bay of Plenty Times no funds had been spent on developing the proposal since the decision to proceed with a developed business case was made earlier this year.

Initial feasibility study and architecture design work was completed in 2023, costing $85,690 plus GST.

“We will take direction from councillors when this project is discussed at some point in the future – there are no confirmed timeframes for that currently,” Wallis said.

The council did not respond to Green’s comments.

A ‘pragmatic’ decision

Mainstreet Tauranga manager Genevieve Whitson said Downtown Tauranga supported progression in the city centre, “but it has to be the right step forward and for the right reasons”.

“We feel TCC’s decision to pause plans is a good business decision given the current environment.

“We hope that this extra time they are taking is well spent, in terms of fully investigating funding opportunities and the potentially huge gains the city centre could get from a hotel and conference centre alongside Te Manawataki o Te Papa.”

Tauranga Business Chamber chief executive Matt Cowley. Photo / Mead Norton.

Tauranga Business Chamber chief executive Matt Cowley said the chamber viewed it as a “pragmatic” response to the current environment and the need to gain clarity on funding sources.

“They haven’t stopped the project, but have just focused on other priorities until there is clarity.

“This project has been on the cards for a decade or more, so a few years in delay won’t impact the momentum the CBD has generated so far.”

Cowley said it appeared the “core parts” of Te Manawataki o Te Papa were still proceeding as construction was well under way.

“Given the construction-related disruptions across the city centre in recent times, it would be great to see the finished projects and achieve the expected outcomes.”

Tourism Bay of Plenty general manager Oscar Nathan said the opportunity for a hotel and conference centre remained “unchanged”.

He said the change was the election of a council that supported ensuring all public and private funding options were explored to ensure a revised business case was thorough.

“It is clear Tauranga remains one of the fastest-growing cities in New Zealand and our appeal, in terms of business events and visitors, will only continue to grow as the many developments across the central city take shape in coming years.”

Economic development agency Priority One was approached for comment.

-Bay of Plenty Times.