Prepping the former Mount Maunganui Cosmopolitan Club for its life as a new, high-performance sports centre will cost $150,000 more than originally expected.
Councillors learned of the extra cost yesterday, which brings ratepayer's backing of the project to $1.127 million.
The site of the new sports centre in Mount Maunganui. Photo: Tracy Hardy.
The building has been unused for the past six years.
Council originally paid $997,000 to bring the building up to earthquake standards, re-roof it and make it weather tight ahead of Bay Venues Ltd operating the premises as a sports facility.
The extra, unbudgeted $150,000 will be paid out of the property account at the chief executive officer's discretion.
Other funding provided by council covers a two-year rent free period from the opening of the centre, and transfer of ownership to Bay Venues Ltd for $1.
At a meeting on Monday, Tauranga City Council agreed to become the guarantor for an interest-free $750,000 loan from Tauranga Energy Consumers Trust to the project, to buy new gym equipment.
At the end of a three-year period, Bay Venues Ltd expect to refinance the loan and pay it off with income from the sports centre.
Bay Venue Ltd CEO Gary Dawson says they have tenants in 75-80 per cent of the building, with 200m2 upstairs remaining vacant.
Downstairs they have New Zealand Rugby and, after the Bay of Plenty Polytechnic pulled out, the University of Waikato.
The upstairs space is now being considered for multiple tenancies.
'Rather than have a primary tenant, we could have a shared space where similar organisations can come in there for a couple of days a week,” says Gary.
The flow of tenants into the facility has led to Bay Venues Ltd looking at the neighbouring property at 50 Miro Street, which the council is considering selling.
They have obtained first option on the land until December 20, 2015, and are also in talks with neighbours Mount Greens about venue hire and other services.
Construction began in late July, with Marra Construction Limited appointed by Bay Venues to undertake the works.
21 comments
What !!!!!!!!!!!
Posted on 22-09-2015 15:12 | By Mackka
Cost to ratepayers will be $1.127 million. Then they give it away for $1.00. Then they go guarantee for a further $750,000 which they hope will be paid back at the end of three years? Surely I haven't got this right? No-one, even our council couldn't be this stupid - or perhaps they are. Nothing surprises anymore :( Who in hell are Bay Venues anyway??
Is this a rates funded gym?
Posted on 22-09-2015 15:27 | By Annalist
This project sparks a whole lot of questions about using rates money to compete with private enterprise? Councillors should invite private investment and not play with our money. Who is accountable for the extra costs? How many discretionary budgets are there? I'm more than a bit shocked by this turn of events but on the other hand, should I really be surprised?
I sincerely hope
Posted on 22-09-2015 15:55 | By How about this view!
That there is no surprise at this REVELATION. Builders put in a price and THEN the tinkering begins. Obviously, "those that Know what the rest of us need" ARE WRONG AGAIN!
Here we go again
Posted on 22-09-2015 16:31 | By Plonker
Budget blow out, the tab stands at: $977,000, $150,000, $480,000 (two years rent free, $4.96 million (31 year of reduced rental), $750,000 guarantee, $27 million (under sold the cost paid by TCC), total costs then to be expected are say $35 million so far. Then of course there are the huge losses to come as well, perhaps $1 million/pa as well for another 30 odd years to.
Extra money
Posted on 22-09-2015 16:43 | By Kenworthlogger
So what was the extra cost for?
Overit
Posted on 22-09-2015 18:43 | By overit
Yes Mackka that's how I read it. Unreal eh and 2yrs rent free to boot. Then Bay Venues also want 50 Miro St too, I hope they have enough money for their great big ideas otherwise guess who picks up the pieces. Reading this it all seems a bit reckless and I hope a very good Accountant has his eye on the ball!!!
Not council business!
Posted on 22-09-2015 19:09 | By dgk
Why is TCC funding high performance sport? This has nothing to do with TCC, and our councillors should have realised that and voted it down. Time to vote out these idiots and get some responsible people in.
DOUBLE WHAT !!!
Posted on 22-09-2015 21:03 | By The Caveman
ANOTHER COUNCIL BLOWOUT, that was under costed at the start............ You have to ask WHO did the costing and how they arrived at. Oh, Council position will be that its "commercial sensitive" BLOODY RUBBISH. Its ratepayer money that's being spent and the TOTAL contract, once awarded should be PUBLIC information.
Business Case??
Posted on 22-09-2015 22:10 | By FunandGames
So Bay Venues has leased 80% of the venue, yet the business case can't support financing without a council guarantee. On top of this they have received the premises for nothing, sorry $1. So a free hold building with 80% occupancy and they still need council to hold their hand. Get ready for a rates increase to pay for future.
overit
Posted on 23-09-2015 12:51 | By Plonker
Yes that will happen because they "want it". The plans are flawed, the budgets always fail, that of course is the positive side of it all. Then it gets worse ...
Door not even opened
Posted on 23-09-2015 14:14 | By Plonker
The costs are already a blow out of some 15%, it has only been a couple a months. Wonder what they can achieve in a year, ten years, the numbers will be mind boggling I am sure.
The Caveman
Posted on 23-09-2015 16:10 | By Plonker
The numbers were just all made up so as to look good and get the usual rubber stamp treatment. The usual always then follows, bills and costs beyond imagination and some, that is the TCC way, no surprises, all predictable, here we go again ...
Big Surprise
Posted on 23-09-2015 20:14 | By Jitter
I don't think so! Another white elephant and it has not yet been refurbished and TCC goes into more debt.
A VERY BAD JOKE INDEED
Posted on 06-10-2015 11:13 | By ROCCO
Take a good look at this work. The preferred contractors have been on site for nearly 2months full time and it seems from reports the full roof and full exterior cladding has been redone.TCC financial exposure either directly or indirectly to this Ex Mount Cossie club site and Mount Greens will now be up around $30,000,000(yes $30million)in cash and assets and to put it mildly that is bloody ridiculous particularly as it is of no personal use to most TCC ratepayers and there is no return on funds splurged.If you seriously believe the current external work is only costing $1m or $1.15m then it is suggested you change your medication or go see Specsavers. TCC financial exposure to this latest brain dead venture is huge and it is ratepayers footing the bill. !!!!
Jitter
Posted on 06-10-2015 11:14 | By Plonker
Agree, the planned costs are some $4m alone to refurbish inside, no idea what the costs overall are but it has to be a lot, recladding and all the other work going on there as well as all the "nice to haves", that will cost a fortune. No way this deal is going to save ratepayers a penny, it is all going to cost and some.
Rugby moves?
Posted on 06-10-2015 11:15 | By Plonker
From Baypark to the Cossie Club, so perhaps the CEO could explain the benefits overall? As I see it millions are spent and the income stays the same.
Look at the scope of the work ..
Posted on 06-10-2015 17:32 | By kellbell
and 3months of full on construction activity that's got to be $2m to $3m if I ever saw it so where are they going to hide those figures ??
Really?
Posted on 07-10-2015 09:24 | By Kenworthlogger
How is this an essential service?
Costs blow out
Posted on 09-10-2015 11:31 | By Plonker
Cant see how only $1.15m spend up on this little jaunt. The actual costs will rack up to be a lot more than that just for the external complete rebuild. maybe it would have been cheaper to just demo the whole thing and have a car park. Less costs, less debt, no maintenance and most important no more over paid officials and staff running around.
Kenworthlogger
Posted on 10-10-2015 13:06 | By Plonker
There is nothing 'essential' about this at all, it is in the "Nice to haves" category, nothing more or less to it.
Cost blow out and more
Posted on 14-10-2015 10:37 | By Plonker
This is a complete refit inside and out of the building that was scheduled to be demolished. The huge costs to bring it up to standard building levels now are huge. Just look at the crazy money spent in the CBD on EQ works.
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