Convention Centre Proposal
Introduction Approach made by consortium Partnership to deliver: - 5 star Hilton hotel (165 rooms) + purpose built ‘city scale’ conference centre - Council lease convention centre for 20 years - Strategically located opposite Te Papa Hilton International Council Developer + investors
Strategic Context Conventions are important to Wellington. Per year: - $146m in expenditure - $76m in GDP - supports over 1,000 FTE’s. Government investment to increase NZ market share - $34m over four years Current civic facilities not always competitive in the market - limited functionality - capacity issues - aging facilities More market competition from Auckland, Christchurch, Queenstown Need for improvement known / outlined in ‘Big 8 Ideas’ adopted earlier this year
Two Strategic Options
What the market is doing
Convention proposal structure and terms Developer Developer Development agreement and lease Lease Pro-rata rates and insurance Term 20 years + right of renewal in year 15 Annual rent reviews at CPI Sub-lease Net Operating Profits After building costs and Operating Co incentives After any operating loss clawbacks Management AgreementLicence fees based on revenue Incentives based on operating profits WCC WCC Operating Company Hilton Hilton
Cost and return on investment
Other Benefits Construction Benefits - Circa $50m to the regional economy - About 300 FTEs during construction Hilton presence in Wellington -Most recognised hotel brand in world -Number 1 hotel in Asia pacific past 5 years -Loyalty programme 40 million members worldwide -Pre-eminent and most visited brand website -Strong corporate responsibility standards Support for the sector - retail sector -transportation - hospitality sector -acoomodation providers
Other Benefits - secondary investment
Who benefits and who pays To be tested through consultation Subject to Financial Strategy and Revenue & Financing Policy LTP process
Questions
Advisors Economic and Industry Advisors – Howarth, Covec, BERL, & Horwaths Property Advisors – Gill Consultants & Wareham Cameron Legal Advisors – Kensington Swan Business Case – PWC