Tauranga’s $306 million civic precinct, aimed at reviving the city’s heart, has been given the greenlight but there could be a $91.6 million funding shortfall.

Touted as the “most significant investment in community facilities” Tauranga may see, the project aims to generate $500m in economic output for the city and wider Bay of Plenty by 2035.

Te Manawataki o Te Papa, meaning the heartbeat of Te Papa, will include a library and community hub, civic whare (public meeting house), exhibition gallery and museum.

It will be located on the site of the former council chambers and library, between Wharf Street and Hamilton Street.

The programme of work also included upgrades to Baycourt and Tauranga Art Gallery, along with the landscaping of public spaces in the area and upgrading Masonic Park.

The commission approved the full programme of works at a Tauranga City Council (TCC) meeting on Monday, after considering the updated costs and designs along with the business case and financial strategy.

Initial costings for the precinct were $303.4m, but the latest design, prepared by project partner Willis Bond, came in at $306.3m.
Increased costs were related to the exhibition gallery and museum, and included a 10 percent contingency.

Willis Bond managing director Wayne Silver said they were “extremely confident” they could deliver the project within budget and the increase was minimal.

Commission chair Anne Tolley said the community had told council it was “time for action” on the civic precinct. Photo: John Borren/SunLive.

Commission chair Anne Tolley said a 1.15 per cent increase in cost from preliminary design to detailed design was an “excellent result”.

There was “a degree of cynicism” in the community that the project was going to end up “costing more and more” so the 1.15 per cent increase was “really important,” she said.

The ratepayer contribution to the precinct would be capped at $151.5m. This was likely to be raised through an Infrastructure Funding and Financing (IFF) levy from the government and be paid back by ratepayers through a targeted rate.

The balance of $154.8m would be funded through local and community grants, $12.1m in “Better Off” funding from the government, other government grants and developer contributions.

TCC strategy, growth and governance general manager Christine Jones told the meeting current estimates showed a shortfall of funding required at $91.6m

Jones said the government had signalled funding that would have been available was likely to be reduced or redacted because of recent flooding events caused by Cyclone Gabrielle and Hale. 

Figures presented to the meeting showed initial estimates of government funding were $49.1m, this was now down to $14.2m.

Tolley said the council had been “really conservative” in its estimate of government funding and she hoped they would get at least three times that.

“If we only get $14m from government, to … the fifth largest city, that's not really put its hand out for help with anything like a museum or big community facilities, then they are really miserable because Tauranga is owed.”

Tolley said there was more work to be done on funding but council was “confident that a sound financial strategy exists and there is sufficient funding available to proceed”.

The library and community hub is estimated to attract 800,000 visits each year. Image: Tauranga City Council.

She also thanked TECT (Tauranga Energy Consumer Trust), who came aboard as a “founding funder” last week, approving a $21 million grant to the precinct.

Jones said if the council was seeking to “maximise external funding” but if that and the ratepayer’s portion was “insufficient” then the council could use an “Asset Realisation Reserve”.

Commissioners approved the reserve - a fund that helped council manage its properties and assets.

These included the potential sale of the two council owned CBD parking buildings, the Marine Precinct, Smiths Farm and other assets that had an estimated value of $146.3m.

The council could also use $13m of profit from the Tauranga Airport toward the information centre that would be located in the library.

Jones said work was still being done on cash flows for the capital works and a decision about asset realisation wouldn’t be needed until year three of construction.

Construction of the library and community hub will begin next year, and the whole precinct is expected to be delivered by the end of 2028.

Any decision around the asset reserve or using an IFF levy would require consultation with the community, she said.

Commissioner Stephen Selwood said a museum was “fundamental to the development” of Tauranga. Photo: John Borren/SunLive.

Commissioner Stephen Selwood said the asset reserve was “good governance”.

“This is about understanding what it is the council has and whether or not it is using those assets to best advantage.”

The Te Manawataki o Te Papa Business Case showed a target of $500m in GDP from the precinct by 2035 with $550m in wider benefits over the life of the buildings.

It also aimed to have 2 million visitors a year to the city centre and 317,000 domestic and international visitors to Te Manawataki o Te Papa per year. The library was expected to attract 800,000 visits each year.

Edward Guy managing director of Rationale consultants, who prepared the business case with the council, said: “These are not just purely economic investments, these are investments that come down to public benefit.”

Tolley said the precinct had been talked about by previous councils since 2014.

While that discussion happened the “the heart of the city was hollowed out,” she said.

Tauranga’s CBD has a number of empty shops and one retailer told Local Democracy Reporting he left the city centre in May to “survive”.

Council data shows current foot traffic counts in The Strand and Wharf Street were 1,600 people a day.

“We’ve been told by the community it’s time for action, today marks the start of that,” said Tolley.

The new civic precinct will located on the site of the former council chambers and library. Image: Tauranga City Council.

The precinct and costs were criticised by former councillor John Robson in the meeting’s public forum. He claimed the costs were an “enormous burden” on ratepayers.

“Make no mistake that if the right people, in my view, are elected in next year's election, a lot of this will be reversed.”

Commissioner Stephen Selwood said he did not support the view of Robson and labelled it a “negative approach”.

He said the state of the CBD was a legacy of just looking at the costs and not the wider benefits.

“Conceptually it’s the right thing to do for the city, to give the city back its true meaning.

“The city has a significant and important role in the history of New Zealand and how we came together as two cultures. To have a museum will help to educate our young... it’s fundamental to the development of this city.

Silver said Te Manawataki o Te Papa was “a city shaping, transitional project that we can all be rightly proud of when it's delivered in six years’ time.”

Commissioner Shadrach Rolleston said: “This is a significant day for us, we are committing to this Te Manawataki o Te Papa and we are going to deliver this.”

Public Interest Journalism funded through NZ On Air.