Queenstown council says CBD convention centre plan viable, legal

Queenstown Lakes District Council has advice its convention centre plan is legal and financially viable even though many other convention facilities are in various stages of development around the country.

After spending $500,000 on ten reports over three years the council will consider a new report recommending it approve a council-led development on the Lakeview site at a full council meeting on Thursday.

The report from transition manager Paul Speedy and chief executive Adam Feeley shows progress has been made in talks with Ngai Tahu Tourism (NTT) on the development of hot pools adjacent to the centre.

Potential private equity partner Morrison & Co and casino operator Sky City Entertainment Group are no longer in the picture and a council-led development is envisaged, although the council will not operate the $52.5 million centre.

The question of whether leading a large property development is core business for a council under the Local Government Act has been put to lawyers. The report says the advice is privileged but there is a "high level of comfort" the council can lawfully pursue the establishment of the Queenstown Convention Centre.

The report recommends the development of the centre subject to securing funding for the $32.5 million council contribution and various procedural issues being addressed. It says $20 million of funding from the government is unlikely but a lesser amount and a visitor levy are possible funding mechanisms.

It says negotiations with NTT are proceeding with a draft heads of agreement under consideration. The lease period and renewal, rental and design are among issues being discussed. NTT declined to comment on the proposal.

If the council opts to either exchange or lease reserve land for the hot pools project it has to be notified under the Reserve Act and be approved by the Minister of Conservation.

"Preliminary discussions with the Department of Conservation have been initiated," the report says.

The report mulls the likely competition from the 2,550-seat convention centre in Auckland and a mooted 1,500-seat centre in Christchurch, a 1,000-seat centre in Wellington and 625 centre down the road in Queenstown at Remarkables Park.

Queenstown is well-placed to host a convention centre, and it can complement by hosting "subventions".

Wellington has a "lack of appeal as an international tourism destination" and there's been little tangible progress on the project at Remarkables Park, which could provide critical mass for a convention centre market in the Wakatipu Basin anyway.

The report says international convention organisers prefer the Queenstown CBD.

(BusinessDesk)