Council secures CBD properties as part of six-point plan
Published on 07 May 2024
Whanganui District Council has agreed to complete negotiations to secure properties in Whanganui’s CBD, which will increase the council’s income and help keep rates low – and in future potentially support a new hotel development.
The total purchase price for the properties is $3.916M, which is just under the current market valuation. This will be funded by $3.5M from the council’s city endowment reserves with the balance funded by debt.
Chief Executive David Langford says the bundle of properties won’t cost the ratepayer anything. “The council’s city endowment property portfolio pays for itself from the income it generates from leases.”
The City Endowment reserves have been built up over the last few years from profits the portfolio has made. David Langford says using this fund minimises the amount of debt needed to complete the purchase.
“The cost of servicing the small amount of debt will only be approximately $40,000 per annum. By contrast, the properties will return income of about $237,000 per annum, with scope to increase this.”
He says, “Growing the council’s revenue from sources other than rates is part of our six-point plan to keep rates affordable. The more money the council can make from investments like this, the more we can cover the cost of core services without increasing rates as much.”
Mayor Andrew Tripe says this bundle of properties could potentially support a four-star hotel and a carpark. “This council is committed to growing our community and this includes identifying non-rates sources of revenue. A hotel development will bring new business to town, attract tourist investment, and generate employment opportunities.
He says, “A great location for a potential hotel development would be Wakefield Chambers, which was purchased by Whanganui District Council in 1991 to add to the council’s harbour endowment property portfolio.”
Wakefield Chambers, in the heart of the city centre, was built in 1929 and designed by Robert Gordon Talboys.
Mayor Andrew says, “It’s important that we undertake the necessary background work to investigate the feasibility of a hotel before the council decides whether it is going to invest. We also need to take on board feedback from the community as part of the council’s long-term plan for 2025-35. Either way, I’m pleased we can go ahead with these acquisitions without any cost to the ratepayer.”
The council has initiated discussions with a number of hotel operators to canvas interest in running a hotel in Whanganui’s CBD and Mayor Andrew says, “If the council decides it is going to let the private sector develop the hotel then these properties could be sold or leased to the developer.”
David Langford says, “We have entered into two conditional contracts on the Whanganui Furnishings properties between 33 Victoria Avenue and 36 St Hill Street and the Flynn properties at 63 and 65-71 Ridgway Street. The next step is to complete our due diligence process so we can finalise those purchases.”