The possibility of New Zealand's Rugby Sevens Olympics team using Mount Maunganui as their training base has moved a step closer, with Tauranga City Council approving a high performance sports centre.
Despite figures suggesting little to no TCC profit from the venture to transform the former Mount Cossie Club, councillor Gail McIntosh says it is a way of extracting some community value from what is an 'absolute lemon”.
The new BVL High Performance Training Centre.
The council is going to sell neighbouring 50 Miro Street, and add the proceeds to the estimated $997,000 it is going to take to bring the building up to a standard where it can be leased to Bay Venues Ltd.
In turn, Bay Venues Ltd has until the end of March to find $2 million of the estimated $2.7 million required to meet the relevant sporting codes required for consideration as a Rio 2016 Olympic base.
Councillor McIntosh says she doesn't expect the city council will make a viable financial return, but approved it on the basis of ‘build it and they will come'.
Councillors who voted in favour expressed similar sentiments. Mayor Stuart Crosby says it also sends a positive message to the wider community that Tauranga is not just a retirement community and gives sports people the added incentive to live in the region instead of elsewhere.
The purchase price for both properties was $6.3 million, while the rating value for the combined properties is $5.9 million. Annual rates are $30,540, and the council receives rent of $15,600 from 500 Miro Street.
The original plan to use the land for Blake Park car parking is voided by the car parking at the Bay Oval cricket pavilion.
The building has been empty since 2010, and it will cost about $89,000 to repair the roof and up to $450,000 to repair cladding. Bringing the interior up to seismic standards will account for around $350,000. In return, council will lease the building to BVL for about $70,000.
Bay Venues own report on the venture, by Wardale Consultants, also admits there is uncertainty about the venue's revenue generating ability, and that BVL will be looking to break even or achieve a small operating surplus.
The $70,000 lease to TCC represents operating losses of $1.5 million over ten years, or $1.3 million if 50 Miro Street sells. The deficit is largely due to the requirement to fund depreciation to the tune of more than $1 million over the period.
The resolution was split into two votes. It was seven/three to sell Miro Street, with Catherin Stewart, Kelvin Clout and Rick Curach voting against it. The BVL decision is supported by eight votes to two, with Stewart and Bill Grainger voting against.
The council is going to sell 50 Miro Street in Mount Maunganui.
7 comments
No Cents = No Sense
Posted on 04-02-2015 10:02 | By Disappointed
A bit of simple arithmetic: purchase price $6.2m plus renovations $997K (let's be generous and say $1m) totals $7.2m. Leased to BVL for $70K per annum is 1% return on investment. When you google search "Dumb and Dumber" you must surely find a picture of our current City Council.
It's possible losses that worry me
Posted on 04-02-2015 12:23 | By BullShtAlert
Definitely not worried about this venture making a profit as there's little chance of that. What's concerning is the potential for a loss which the ratepayer will have to pick up. Provided there's no cost to ratepayers I could support. But be careful as I think we're bing softened up for ratepayer contribution to things like the Historic Village as well. Where is the money going to come from?
I
Posted on 04-02-2015 13:16 | By Capt_Kaveman
New there was a ploy with this building and Gail has stepped right into the hole
Wisechief
Posted on 05-02-2015 05:34 | By Wise Chief
Something rotten to the core about all this? Why sell 50 Miro Street when its an income earner? These people must be sacked if they can't do their jobs in the required manner. Local Police had free run of place for years until mentioned in this paper a couple of weeks ago, when obviously someone in council to umbrage and responded in this manner where we now have fully blown ass covering effort via suggested transfer to affiliate outfit for low cost and sell off of Miro st house. Stinks through and through. Why in all the years it lay empty was it not suggested the property be used as a Maori Arts or Local Produce Arts Craft display center to cater for tourist who arrive only a few hundred meters away. Is there no intelligence operating around this town or are all these people wrote taught like Muzzy.
Tauranga Cavalier Council
Posted on 05-02-2015 07:58 | By The Beaten Generation
Nothing much changed at the Council. Still an organisation with a carefree and nonchalant attitude towards spending rate payers money.
Lemons muliplying
Posted on 06-02-2015 00:23 | By JERRY CORNELIUS
BVL is a lemon, the only place they will get $2m from is TCC from some cunniong rexerve somewhere. Bottom line here is that McIntosh is right, the chance of breakeven are only on the basis of "spend and hope" and that means that the general philosopy of TCC has not change since the election. Mount Greens all up cost was a little bit more than $6.3m, a figure like $26m would be nearer the mark when all the side show bits are added into the equation. Amazing how the numb ers get watered down when suits then the $70,000 rent will not even pay the interest of the additional costs/spending, this is all a copmplete joke from start to finish, guess who is paying, you guessed it, TCC ratepayers.
Museum
Posted on 09-02-2015 14:49 | By Jitter
Offer it to the Tauranga Museum Trust. If it can be converted for a sports centre then it can also be converted for museum purposes. Conversion/purchase cost would be far, far less than the proposed obscene $23 million for a new building on Cliff Road. This has been suggested before but was rubbished by previous council. Museum trust would probably turn it down also as they want a new gold plated building which will be an economic disaster.
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