Commercial return still '12-15' years away, social return already here
"We’ve got about $90 million in the mall project, putting aside streetscapes which is more money again. So, we are heavily into it."
Hi all, there seems to have been an error with the link to the below story which was sent out to tribune subscribers earlier. Apologies for that.
Invercargill Mayor Nobby Clark says it might be “12 to 15 years” before the council starts to get a commercial return on its Invercargill Central Ltd investment. Although he stresses the project is already delivering on the social investment it was after.
The Invercargill City Council and the O’Donnell family are the two major investors behind the $165m development which has seen an almost entire central city block cleared and redeveloped.
“We’ve got about $90 million in the mall project, putting aside streetscapes which is more money again. So, we are heavily into it,” Clark said.
The development includes retail, food and beverage, and car park offerings. As well as a link to Reading Cinemas.
The council has also invested in streetscape work on Esk St to tie the street in with the development.
That streetscape work has been completed with an official opening to be held on Friday.
Stage one of streetscapes also included Don St which has tied the ILT’s Langlands Hotel into Don St.
Clark was a councillor when funding decisions were made last term and was certain the significant investment into Invercargill Central, and the CBD in general, has been the right decision for Invercargill.
“For us, it was a social investment. To reignite the inner city, knowing there would be a commercial return, but that will be some time away.
“We never made [the decision] on the basis it was a commercial venture.”
“We had some sceptics on council who said, do half the block instead of the whole block. We said to the chief executive at the end of quite a protracted couple of days of discussions; ‘just get it done’. So that’s what’s happened.
“I don’t get any feedback anywhere in the community - and I’ve got sceptics that would moan about just about anything - who say the mall is not a good place and Esk St is not as well.”
Clark did not believe the council would start to get a commercial return on investment until maybe 12 to 15 years away because there were loans to pay back first. Included were Community Trust Southland, the Government, and a low-interest loan with the council itself.
Invercargill Central has been open and operating since July last year while work continues on different parts of the development. Included is the link between Tay St and Esk St.
At the same time as the Invercargill Central development has taken place, a new office building called HWR Tower is being constructed on the corner of Esk St and Dee St.
Westpac will take up the ground floor with office space on levels above.