Council making the $70M call

The $70 million call to demolish and rebuild Tauranga city centre is expected to be made today.

Councillors have a transparent trail showing the figures and reasoning leading to today's decision.

They are using a treasury programme, a business case decision making toolbox which lays out the option costs and benefits of the various ways of dealing with a mouldy and leaking central city administration block.


A perspective of the possible future view across Willow Street.

The report shows renovating will cost more than the completed buildings will be worth.

The estimate on the worst affected administration block is that it will cost about $10 million at a cost of about $3,719m2. Total costs of the project are estimated at $13.7 million, leaving the city with a building having a market value of $6.5m.

A new building on site that is built and owned by Council offers better value for money and is therefore the recommended ‘preferred way forward', according to the report.

The option is used for analysis of the three short-listed masterplan options described later in the Economic Case. According to the financial case, a ‘build and own' option may not be affordable.

The Commercial Case retains both options as well as a combination of those options as viable commercial options, which will be more fully analysed during the consideration of a procurement approach for the project.

The existing buildings' floorplans and inter-floor and building access are not suitable for an Activity Based Workplace.

Activity-Based Workplace (ABW) is the label given to workplaces that have no or few assigned workstations. Instead, a landscape of different places to work is provided, with the aim that each different setting is conducive to particular tasks.

The overall number of work settings can be reduced, as a workstation becomes a shared facility, just like a meeting room – neither is used all day every day by everyone. Therefore, when contemplating a new work environment, many organisations consider if ABW could potentially work for them.

It means less space is needed for the 400 council staff, which means a smaller cheaper building to house the same number.

The report states an ABW city council workforce will take up 8,170m2 compared with 12,696m2 for the conventional office space. The price difference is $63m compared with $95m.

Organisations that have adopted ABW workplace designs report productivity gains of 6 to 16 per cent annual productivity gain. A 30-40 per cent reduction in work related sick days and a 10-50 per cent reduction in staff turnover.

The demolition of the existing buildings on the site prior to longer term decision on the future of the sites will mean that Council will create transitional open spaces in these areas until a longer term future is decided.

The decision today is just on delivering a new civic administrative building with surrounding open space on the 91 Willow Street site, and delivering a civic square on Masonic Park

Investigating the feasibility of a potential civic precinct based library, museum and performance venue, is further work.

The council role in each of these may be different, says the report. For example council may lead on providing the library, facilitate a hotel development and own or tenant an office building. The next stage of the project will provide further evidence to support any role in the delivery of each of the elements.

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8 comments

Are you kidding?

Posted on 01-06-2016 19:15 | By flipper

Do you really expect people to believe that 13 million is too dear for a building that is only worth half of that but 63 million is good? And while we are on the subject teams not necessarily seated together because it is first in first served is somehow more productive? Pull the other one!


Hmmmm

Posted on 02-06-2016 00:27 | By How about this view!

A lot of "If's, But's, Maybe's" and fudging.... What does it matter if it gives better value for money to demolish and rebuild, if the building will NEVER be on-sold? Also, What are the ADDITIONAL costs of rehousing council whilst the demolition and re-build is taking place and where are they going to be rehoused? I would suggest that council rebuild elsewhere whilst continuing to use the downtown site and then put the site out to tender for private investment into a piece of prime real-estate. A Hotel/conference centre, with retail and casino facilities perhaps. You want to regenerate Downtown, bring in people that KNOW what they are doing and that are will to invest their own money into it.


Suspicions confirmed

Posted on 02-06-2016 09:25 | By nerak


@ nerak

Posted on 02-06-2016 09:42 | By Crash test dummies

You are on to it, my thoughts on it also to.


A Bit Of

Posted on 02-06-2016 11:59 | By Merlin

A bit of ego here I think and I hope it is not Eggo with the cost overuns as can be the norm on some large projects


Clear as Mud

Posted on 02-06-2016 13:13 | By Kaimai

If $13m is spent on renovating a building that will be worth $6m then spending significantly more, is more likely to end up with a greater loss. My guess is estimate a $70m spend, actual costs more likely $100m and a building worth $50m that can't be sold anyway.


This thinking explains everything.

Posted on 06-06-2016 18:50 | By astex

If this crowd think that spending $63 million is cheaper than spending $13 million this explains why we are heavily in debt. They probably believe that the more debt we have the more that they have saved. Same as someone buying something on special that they would not have bought otherwise and saying that they saved money.


Oh?

Posted on 06-06-2016 21:57 | By astex

Darn it. I shouldn't have fixed my broken window as, according to this theory, it would have been cheaper to buy a new house??????


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