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

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 2018- 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 insuranceTerm 20 years + right of renewal in year 15Annual rent reviews at CPI

Sub-lease

Net Operating Profits After building costs and Operating Co incentivesAfter any operating loss clawbacks

Management Agreement Licence fees based on revenueIncentives based on operating profits

WCC 

WCC 

Operating CompanyOperating 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