Friday, 18 September 2015

Queenstown - I still don't get it

Convention Centre economics are about as wonky as stadium economics. Field of Dreams stuff mostly.

So when a private outfit says that it wants to build a convention centre using its own money, you'd expect a city council to be pretty accommodating, right? They get the hallowed thing and don't have to pay.

Not if you're in Queenstown.

Loyal readers will remember this one from last year. I'd then written:
Chris Hutching over at NBR (gated) has the story.*

Alastair Porter wants to open a convention centre near the Queenstown airport, called "Remarkables Park". He wants to target smaller Australasian conventions, noting the pretty saturated market for the big international ones. He's lodged the consents to get started. Queenstown Council wishes instead to have a bigger venue downtown to anchor a retail, hotel and entertainment district.

Queenstown accountant Duncan Fea is quoted in support of the Council proposal, saying simultaneously that it will hurt the central business district because of the airport location and that, because it's at the airport, there will be logistical difficulties in getting attendees to and from downtown hotels. I'd have thought that conventioneers staying downtown and catching a shuttle would have given downtown Queenstown the best of both worlds: a centre they don't have to pay for, evening traffic from conventioneers, and no big deadspot downtown when there isn't a convention on.

I'd also have thought that Queenstown would have been a tough venue for big international conventions anyway because anybody going there needs to connect from Brisbane, Sydney, Melbourne, Christchurch, Wellington or Auckland. It's a beautiful spot, but it's a hop away only from places that already have, or are planning to have, ridiculously big convention facilities for international conferences.

I can't get how anybody's calculations would lead them to conclude you get higher net benefits for a downtown convention centre that you have to pay for than from one near the airport, whose visitors stay downtown anyway,** and that, critically, you don't have to pay for.

Does Queenstown really want to *punch* a gift-horse in the mouth?
Well, the saga continues. The NBR's Chris Hutching remains on the case.
A council meeting last week heard how the total anticipated direct cost to deliver the facility is $58.1 million including $55 million in construction cost, $1.7 million working capital, and $1.4 million in infrastructure upgrades. Rates would glean $31.4 million along with debt funding.
The balance of $26.7 million is being sought from the government and other sources including local community trusts, Otago Regional Council, and commercial sponsorship.
A central government funding proposal was provided to the Ministry of Business for consideration by the Treasury in January.
The developer of the Remarkables Park shopping centre has offered to build a convention centre near the airport at no cost to ratepayers. But the council wants the convention centre built near the centre of town.
So for the sake of a couple miles' distance, Council wants to spend tens of millions - presumably because a downtown centre will have greater flow-on benefits for downtown businesses. But, if I'm not wrong, it's Queenstown Council that complains, loudly, about all the costs that tourists impose on local services that the City isn't able to recoup in rates.

And is it really plausible that a conventioneer flown in to Queenstown wouldn't spend some time downtown as well?

There may be good reason for the general and widespread view that local councils suffer from severe competence issues.

No comments:

Post a Comment