First floor 'difficulty' for Invercargill Central, but development boosts 'civic pride'
"The real problem we have is the first floor, but I think the retail space on the ground floor you could say now is pretty much 100%.”
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Invercargill Central is struggling to fill its first-floor space and economic growth is a little lower than expected for the city.
However, an independent report confirmed the major development has still provided a clear benefit for Invercargill and is expected to continue to do so.
The Invercargill City Council invested significantly in the multi-million dollar Invercargill Central Limited project which saw the main city centre block largely demolished and rebuilt.
Prior to investing the council carried out a due diligence process.
In 2019 the New Zealand Institute of Economic research (NZIER) provided a report on the estimated broader economic impact of the development for Invercargill and the region.
With Invercargill Central now largely complete NZIER was asked to provide an updated report.
The report says the economic growth from the redevelopment is lower than what was initially indicated in 2019.
“Although economic growth is lower than estimated in the previous report, there is a clear economic benefit from the city centre rebuild in Invercargill.
“The rebuild will help grow gross domestic product (GDP), increase employment, and promote higher wages in the region.”
It says the wider inner-city work is likely to increase GDP by $9.44 million from 2020 through to this year and then increase to $14 million per annum until 2030.
“We assume that the development of the additional projects in stage three and the additional investment will finish by 2030.”
Since the previous report, several assumptions have changed which have come on the back of the Covid pandemic.
A key element identified is a lower number of tourists and lower population growth than expected because of reduced migration.
“The importance of the tourism forecast cannot be understated. As a rule of thumb, a 1 percent rise in tourism will add $2.5 million to GDP.
“So, there is a significant upside to these estimates if tourism numbers increase above the projected 2 percent.”
The council has been vocal about the fact that the Invercargill Central investment was just as much around the social return for Invercargill than the potential financial return.
That financial return, for the council, is still expected to be over a decade away but the social benefits are already here.
The report says there has been an increase in the sense of civic pride because of the rebuild.
“The redevelopment of the city centre has instilled a sense of pride in the people of Invercargill,” the report says.
Andrew Cameron, the council’s representative with Invercargill Central, spoke to councillors about the updated report on Tuesday.
Mayor Nobby Clark asked Cameron for an update on occupancy levels at Invercargill Central.
The development is made up of retail, and food and beverage outlets, as well as car parking.
“The real difficulty we have at the moment is the first floor,” Cameron said.
“It’s interesting you ask me that question because it’s continuously changing. There’s been changes literally since we’ve been sitting in this room as to occupancy, which is obviously filling up those spaces.
“But the real problem we have is the first floor. I think the retail space on the ground floor you could say is now pretty much 100%.”
Clark also asked if Cameron could provide an update on what plans there might be for the space behind the Bank of NSW building on the corner of Tay St and Dee St.
That space had initially been eyed for a new medical centre.
“There’s still ongoing discussions but none of them are progressing in a hurry, it’s fair to say.
“There are two spaces there. There is always what was ideally put in the original plans, as a piazza sort of concept over the top.
“In fairness, that piece of work really requires a solution for the pieces of land around it, for what was always in the original plans, to tie them together.
“If the medical centre goes ahead that will trigger some further pieces of work… but at the moment it’s a bit of a chicken-and-egg scenario which comes first.”
Build it and they will come! I think we can all acknowledge that on-going effects of covid have stiffled the projections. However, we have a fantastic resource now that uplifts the city. Onward and upward(with occupancy)!
The missing element is inner city living. It adds a dynamic the CBD doesn't have. It's a pity that SIT never built accommodation on the corner of Kelvin and Tay. There was talk of turning the Kelvin into apartments. A good idea.