Waikato ratepayers are to be given the option of whether the regional council should lease or own a new purpose-built office block on prime Hamilton East land.
The council today confirmed a new building project would be included in the Draft 2012-2022 Long Term Plan. Construction on council-owned land in Grey St could start in September 2015 following the expiry of the lease of the tavern premises on the site and the completion of required planning, design and contractual work.
The regional council’s current office accommodation in Hamilton is inefficient, with the organisation working out of three buildings in Hamilton East and also in Marlborough House in the city centre. By bringing all staff together and reducing the number of offices, the council expects to achieve a range of productivity gains while reducing maintenance and other costs.
While councillors agreed the current accommodation was inadequate, some voted against the new building proposal, saying the timing was wrong given the ongoing economic downturn.
Others said the building project would stimulate economic activity by providing jobs and injecting confidence in the local economy.
After considerable debate over whether to own or lease the building, the council decided to publicly signal its preference for ownership because it would be a sound public investment and would give the council greater certainty about costs and accommodation into the future.
The options for public consultation will centre on whether the building should be a public asset owned by the council on behalf of ratepayers, or owned by an investor and leased by the council.
The preferred lease option would see the council funding design and construction but selling the land and building to an investor on a long term leaseback arrangement.
The ownership option would see the council funding the development, design and construction, and then owning and occupying the completed building.
To enable discussion, preliminary cost estimates have been based on a 7000 square metre lettable area costing $34 million to develop or $3 million to rent annually.
Costs will be offset by the sale of the council’s current office building in Hamilton East.
Chairman Peter Buckley said the decision to include the proposal in the draft plan was another step in a very long and careful process.
“There is a lot of detailed work still to be done to determine the operational and functional requirements of the council which will then inform the detailed design work and cost estimates,” he said.
The council will prepare a full statement of proposal laying out options and financial details, including costs of funding the building through debt or the investment fund.
Meantime, the council will continue to keep a watching brief should suitable office space become available in Hamilton.
Councillors Norm Barker, Peter Buckley, Laurie Burdett, Simon Friar, Lois Livingston, Phillip Legg, Stuart Kneebone and Paula Southgate voted to consult on lease and ownership options in the Long Term Plan, indicating the council’s preference for ownership.
Councillors Tony Armstrong, Jane Hennebry, Russ Rimmington and Theresa Stark voted against the proposal.