The Invercargill City Council wants to invest millions of dollars more into the redevelopment of the city centre, but will first seek public feedback.

At a meeting on today, councillors agreed to seek feedback from the community on further investment in the city block development. At this stage, its preferred option is to invest a further $16 million in the development,

and to invest the $5 million it had set aside for design changes after previous consultation – a total additional investment of $21 million.

This would bring Council’s total investment in the development to $46 million – made up of the $20 million already committed and $5 million set aside for contingencies approved during the Your Money For City Block Consultation, plus the new investment proposed.

This extra investment would be loan-funded.

Invercargill Mayor Sir Tim Shadbolt said the council was honouring its commitment to ratepayers that any further investment would be consulted on before decisions were made.

“We have been advised that this further investment would not have a direct impact on rates – thanks to the low cost of borrowing,” Sir Tim said.

“As your elected members, we have previously recognised your desire for a bright and vibrant CBD by committing to investing up to $30 million in this development. Now, we want to make sure it goes ahead, and we believe the only way to do this is to make a further contribution.”

When investment was first proposed, two private investors had already committed to the development. Since then, one of those investors decided to withdraw part of their investment, leaving a shortfall of $16 million.

While all parties have explored options for other investors to cover the shortfall, none have been found.

The project developers had advised that without this extra investment from the council, the project would be unlikely to proceed, Sir Tim said.

Councillors felt this was not an acceptable outcome for the community or the city. 

“We need to continue to support economic and population growth for this great little city of ours," he said.

“We believe this is the way to do it."

During today’s meeting, Cr Toni Biddle asked why the council was not waiting to hear whether the $30 million it had applied for from the government’s ‘shovel ready’ grant initiative had been approved before going to consultation.

“Are we better to wait for the approval from [the government] if they are willing to contribute to this particular project and then the $16 million would then be covered before we go to consultation?”

However, interim group manager of finance services Dave Foster said Invercargill Central Ltd (ICL) needed a decision from the council to enable it to start singing the lease contracts needed to continue with the project. 

“Before [the ICL] sign the contracts they need to know how much the council is in for,” he said. 

“And while the government may provide some funding for us to then be able to put money in, it doesn’t change the need for us to consult... we always said if it was more than the 30 million dollars we put up last time round, we would go back to the community.”

Cr Alex Crackett asked why the council should continue with the city block project, as it stands, when the country was coming out of a pandemic.

Mr Foster said this could be answered with complete certainty as the country was not in a post-COVID-19 situation yet. 

“We don't really know what the future holds… one of the things that we can reasonably well predict is that in the new world, is newer buildings are probably going to fare better than old buildings.”

He said it was also uncertain how retail and hospitality would fare as both sectors had been “preaching doom and gloom for some time now”.

However, he said if everyone sat back and waited to see what would happen in a post-COVID-19 world then the economy effectively “goes into freefall”.

"There is [also] going to be vacant plot there and something is going to be needed to be built,” he said. 

The consultation timeframe is designed to give the council enough time to deliberate and receive submissions, while also fitting within timeframes required by developers who will need to start building at the beginning of July.

Consultation will open at 10am tomorrow (May 19), when further information, including other possible options, will be available on the council’s website.

Everyone is encouraged to have their say before consultation closes on June 12.