Cr Bill Faulkner Faulkners Corner www.sunlive.co.nz

You won't find 'a new place to dwell” downtown Tauranga any time in the near future.

Priority One's city centre strategy manager Duarne Lankshear mentioned in passing to elected members during presentation of the six monthly monitoring report that the long drawn out conditional contract on the proposed hotel project on Durham Street opposite Baycourt had finally fallen over. ‘Heartbreak Hotel' Duarne aptly called it. This was news to most elected members presumably, apart from the four elected members on the hotel taskforce of Larry Baldock, Tony Christiansen, Terry Molly and Wayne Moultrie and council officers. We're supposed to have a ‘no surprises' agreement with these sub (terranean) committees who beaver away with the details and are supposed to report back to Full Council with progress or otherwise. C'est la vie.

I have to say I'm not surprised at this outcome. Long-winded conditional contracts rarely come to anything in my experience. It's more a mechanism that serves to tie up an opportunity while you go fishing for someone to come up with the funding. Hotel chains mostly don't own hotels these days. Instead they manage and operate the building owned by someone else. They usually don't pay rent either. Instead the owner(s) get an (unguaranteed) percentage of revenue after costs. A bit like a tenant in the house paying rent out of what's left of their wages after living costs. No wonder investors are shy of this sort of deal. This council/ratepayer owned site, commonly known as the TV3 site, has a long chequered history starting in the mid 1980s. Originally the building was to be TV3's regional headquarters.

Past councillor the late Tom Mills spotted the potential and got council to put in substantial foundations for the building to allow it to go up (six storeys from memory). The carpark that's there now was the first stage. Council's deal with TV3 fell over, the building stopped and it's stayed there in that state for the past 25 years or so. In the interim council/ratepayers acquired the adjacent site, which was a bus station for the old Road Services buses and latterly a tavern, before the building was demolished in the 1990s. To cut to the chase, it looks like there will have to be a quantum change in council's criteria to get a hotel on that site, which is probably worth $2-$3 million.

Concessions over Development Contributions and public carparking will likely be negotiating points. And other carrots too, if a viable hotel complex is to arrive in Tauranga. There is a valid argument that such a hotel is overdue in our city and provided benefits to the city's ratepayers can be quantified then council's role is to facilitate the development. Once one hotel is up and running successfully, others will come. It's the old ‘build it and they will come' story but the hotel operators want someone else to do that. So it's back to the drawing board – if you are a potential hotel developer, get in touch with Priority One or council's property division.

The three Mainstreet's presented their six monthly reports. Similar themes came out from Downtown Mount, Greerton and Tauranga CBD. It's been a rough winter retail-wise as the economic downturn combines with the rotten weather to keep shoppers away. But there is retail sunshine around the corner for some at least, with 83 cruise ships scheduled this summer bringing 219,000 people through our city. This year Americans and Canadians in greater numbers will be very welcome as their average daily spend is significantly greater than Australians and New Zealanders, we were told. Voyager of the Seas will be the largest cruise ship at 142,000 tonnes with 3800 passengers and 1100 crew. That's almost a floating city and will be a sight to behold entering and leaving port.

Tauranga CBD is working towards a seven-day opening regime. It's another conundrum for retailers. People don't come so they don't open their shops and the reason people don't come is because the shops aren't open. Mainstreet is scheduling regular weekend activities downtown in the hope of attracting people and breaking the cycle.

In the Forward Focus part of the meeting the on-going saga of the Matapihi Footbridge attached to the rail bridge was reported. It's good news and bad news. Isn't it always? Repair costs are now estimated at just under $1 million and are presently out for tender. Good news is that On Track, which owns the rail bridge, is contributing $250,000. And possibly NZTA too. A vigilant staff member noticed that Government subsidies are available for footbridges attached to road bridges and applied on the basis that a rail bridge is another sort of road (rail road). Apparently no-one had ever raised this before and is receiving favourable consideration. Well done!

The City Treasury report gave first indications that increasing interest rates have appeared on the horizon. About a year or so away. City's average interest rate on its borrowings was 6.01% on external debt of $419.7 million. Debt/revenue ratio of 244% under the limit of 250%. The rates surplus for the past financial year was $3.7 million – sadly due in part to rates penalties for late payments collected not budgeted for. Astute management of lending and tighter controls on expenditure are other factors. Development Contributions collected were down from $11.5 million in budget to an actual $8.3 million. This situation is significant for our city. During the big spend up years forward budgets were showing $30 million plus development contributions for these times. Yeah right! A lot of people got carried away with the euphoria of those times and now we are all paying. Next year's rate revenue requirement is in the Ten Year Plan at $102,757 million up from this year's $98,970 million. There is some substantial head pulling in to be done to reduce this nearly $4 million increase.

Two mindbenders this week. One because it's relevant to our times and one because it's a gem.

The first gem is from Terry Molloy at Projects and Monitoring Committee – 'It's easier to ask for forgiveness then to ask for permission.”

And the second from Winston Churchill – relevant to our times – 'For a nation to try to tax itself to prosperity is like a man standing in a bucket trying to lift himself up by the handle.”