Property Council backs proposed Wellington convention centre

11:00 AM Wednesday August 20, 2014 Colin Taylor

Property Council Wellington today (Tuesday August 19) issued a statement saying it strongly supports a proposed purpose-built convention centre and five-star Hilton Hotel for Wellington on a vacant site opposite the Museum of New Zealand, Te Papa.

“The initiative creates jobs and fosters economic growth and development in the city, further reinforcing its dynamic cultural and arts scene, world class restaurant culture and active outdoors lifestyle,” the Property Council says.

Additionally “convention centres being built in Auckland, Christchurch and Queenstown, will impact attracting visitors and business to the region”.

Property Council Wellington Branch President Andrew Hay says it is important that Wellington City Council actively markets what differentiates the city to remain competitive.

“With the international conference market showing strong growth trends, Wellington City Council should pitch the city even harder at an international market, to ensure the centre’s profitability.

“Central Government has already recognised this by investing $34 million over four years in Tourism New Zealand in a bid to attract increased business for this sector.”

Currently, Wellington has 16 per cent of the market share of multi-day delegate days, compared to Auckland’s 30 per cent. Wellington hosts 79 (26 per cent of market share) conferences per annum of 201 plus delegates, compared with Auckland’s 208 (39 per cent of market share).

While the capital has lost 3 per cent of its share since March 2013, it remains second to Auckland.

“As such, Property Council Wellington supports innovative and cost effective solutions in developing the convention centre; to ensure the city attracts its share of delegates and stimulating the local economy.

“But it is vital that Wellington City Council ensures transparency and efficiency in its cost management processes for the benefit of the entire community.”

Wellington’s Mayor Celia Wade-Brown says the proposed site of the convention and hotel complex is ideal. “Opposite the biggest cultural attraction in New Zealand, Te Papa, it will fill a gap in our urban canvas and is estimated to bring $22 million in GDP to the Wellington economy.”

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 a site in Cable Street. In theatre style seating, the facility would be able to 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 the council believes would give Wellington international exposure and confidence that new events would be attracted to the capital.

 The overall project would be financed by well known local property 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.

All going to plan the convention centre could be up and running by 2017 – bringing $30 million in new spending to the city each year and directly create at least another 200 jobs.

Wellington Council released an overview of factors which led to its decision to support the hotel and convention centre project as follows:

  • 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 Wellington did nothing, the city could lose up to 17 per cent of that business when other newer facilities are built around the country – up to $25 million in lost business and about 170 jobs.
  • The new purpose-built centre would protect that business and it has been estimated to grow the overall business in 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.
  • Flow-on secondary development would be expected to occur in time in supporting businesses such as entertainment, hospitality and retail.
  • A five-star Hilton would help attract premier industry events to the capital and support other economic development initiatives such as a proposed film museum and technology precinct.
  • Thenet average net cost to the city would be $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 with the city carrying all the cost and associated borrowings and all the risk.