24 Jun 2014

Council backs convention centre

4:28 pm on 24 June 2014

The Wellington City Council is supporting a new $100 million convention centre, saying any rates rises will be minimal.

Developer Mark Dunajtschik is bearing most of the risk of building the centre and 165-room hotel to be managed by the Hilton Hotel chain.

An artist's impression of the convention centre and hotel complex.

An artist's impression of the convention centre and hotel complex. Photo: SUPPLIED / HBO+EMBT

The council would lease the centre on Cable Street for 20 years at a cost of $2 million a year. Deputy mayor Justin Lester said on Tuesday that is money the council would have to find either by making savings or raising rates.

However he estimates that any rates increases would be up to $10 a year per household and could be as little as $1 a year - depending on how the centre performs.

Mr Lester said while there was widespread support from councillors for the proposal, it is understood that at least one voted against as were concerned about the risk.

"The risk is that we don't meet out projections, that's essentially the major risk, there would be a cost. But if we built it that risk would be higher, so in many respects we are mitigating our risk," he said.

The council estimates it would cost at least $55 million to build its own convention centre and at least $1.7 million a year to run. Wellington caters for about 15 percent of the conference market, generating $140 million for the city annually.

The state of the art 4400-square-metre facility would be able to host up to 1200 conference delegates and have a banqueting capacity for up to 1450 people.

New spending and jobs

If the centre goes ahead, it is projected to bring $30 million in new spending to the city each year and directly create at least another 200 jobs.

Deputy mayor Justin Lester says if Wellington does nothing, it risks losing out to newer facilities currently proposed in Auckland, Christchurch and Queenstown.

"If we don't do anything we will loose market share because we don't have facilities the size or scale to host certain events."

Mr Lester said by doing nothing, the city risks losing $12 million a year in economic return.

"We are the capital city - we are not a provincial backwater - we want to remain the capital city and don't want to become any less.

"The Prime Minister made his now famous comment that Wellington is dying. We don't want to wither and die, we're investing in the city because we are much more confident."

The public has a month to comment on the proposal from July, with the final decision expected in September.