$6m budget boost needed for museum build as costs rise

“The project team has robustly challenged the design team through several iterations of the building concept to ensure value for the community while retaining the ‘wow’ factor."

A concept design for the new museum build in Invercargill.

The Invercargill City Council looks set to bump its new museum build budget up by $6m to ensure it can progress with a concept design that has “the wow factor”.

In June 2022 the council voted to proceed with a facility at a total cost of $65.5 million, which included a planned $11m of external funding.

To date, the council has secured $5m of third-party funding.

As the concept design has taken shape, the project team has been working through cost challenges facing the industry in New Zealand and overseas.

It has now been revealed an additional “construction” budget of $6m is being sought to align with the concept design that was made public on Thursday.

It will take the total cost of Project 1225 to $71.5 million.

That additional $6m spend will be discussed at a full council meeting on Tuesday.

It has been proposed to seek additional external funding to cover the $6m increase taking the required amount of external funding to $17 million.

The additional external funding would reduce the impact on current and future ratepayers.

Although in the event that $6m of third-party funding cannot be obtained, the estimated annual additional rates impact would be approximately 0.082% per annum to fund and repay each $1 million of additional debt required.

For example, $6m would be 0.49% per annum, while $3m would be 0.246% per annum.

In a report prepared by programme director Lee Butcher he says the budget adjustment has come about for a number of key reasons.

It included cost inflation to build a building of “higher amenity and quality” to the brief and the post-Covid 19 impacts that have not resolved as quickly as the industry expected (resourcing, cost of living and supply chain issues).

“The project team has robustly challenged the design team through several iterations of the building concept to ensure value for the community while retaining the ‘wow’ factor council was looking for when we started re-imagining a new museum.” Butcher says.

“While this is above the budget approved for the smaller museum in the 2022/23 annual plan it remains at a midpoint between it and the larger facility consulted on and endorsed by the community.”

The options in front of councillors on Tuesday will be to either approve the concept design and the additional $6m cost, or do not accept it and instruct staff to re-align the concept to the minimal size and budget.