Len Brown hails start of 'new era' for private capital funded Auckland infrastructure projects with announcement of $200m hotel

Len Brown hails start of 'new era' for private capital funded Auckland infrastructure projects with announcement of $200m hotel
An artist's impression of what the hotel might look like.

In what Mayor Len Brown is touting as one of the biggest foreign investments in New Zealand public infrastructure, an Auckland Council owned entity will partner with China's Fu Wah International Group, with the latter building a 200 room five star hotel at Auckland's Viaduct Harbour.

Approval for the project is currently being sought from the Overseas Investment Office. Assuming this is secured, it'll then move to the design and resource consenting phase. Construction is planned to begin in 2015.

Brown hopes the hotel will be built by 2017 and says it involves a $200 million investment by Fu Wah. The partnership referred to is between Waterfront Auckland and Fu Wah.

"The $200 million investment by Fu Wah Group is the culmination of a lengthy developer selection process that began in March last year and is believed to be one of the largest foreign investments in public infrastructure in New Zealand," says Brown.

“This marks the start of a new era for private capital-funded infrastructure projects that have the potential to deliver jobs and growth for Auckland," Brown says.

Team New Zealand's headquarters is currently located on the site where it's proposed the hotel be built.

A Waterfront Auckland spokesman told interest.co.nz the $200 million figure was "an approximate figure", rather than a fixed one, based on the level of investment to be offered by Fu Wah.

"This includes: Construction, fit out, land use payment, consultants, financing, landscaping and the cost of building a new public promenade out the front of the hotel on the edge of Viaduct Harbour. It could vary in both directions although the payment to Waterfront Auckland for the land and public areas is fixed," the spokesman says. "We won't pick up any shortfalls."

The major contributions to the partnership from the Waterfront Auckland-Auckland Council side include "design and sustainability." The spokesman says Auckland Council is not contributing any money to the development of the hotel.

"Other obvious things we’d bring (to the partnership) is the offer of land use and use of networks to access local suppliers/consultants," the spokesman says.

'An exemplar of the potential for council leveraging its strategic landholdings'

Brown says "significant" economic benefits are expected from the construction and ongoing operation of the hotel, on top of the lease payment by the developer. And a new section of Auckland’s waterfront alongside Viaduct Harbour will be opened for public use.

"It is estimated that during construction the hotel will create more than 1,300 full time equivalent (FTE) jobs and add more than $100 million to Auckland’s Gross Domestic Product and more than 750 FTEs and more than $50 million to regional GDP per annum once completed," says Brown.

“It’s an exemplar of the potential for council leveraging its strategic landholdings to attract investment into Auckland and to develop infrastructure that will attract further and ongoing benefits to the local economy while still retaining ownership.”

Waterfront Auckland Chief Executive John Dalzell says the hotel will be "a world-class signature design", built to the highest sustainability standards. Meanwhile, Chiu Yung, president of Fu Wah International Group, was quoted saying his firm was "honoured" to be selected as development partner.

Fu Wah's website says the company was established in Hong Kong in 1988 and has real estate as its core business. It's chaired by Chan Laiwa.

Auckland Council says the hotel is just one of the projects to stem from an "open and transparent" international investment search process started in April 2013 to develop about $1 billion worth of commercial and residential buildings, plus a five-star hotel in the Wynyard Quarter. The Waterfront Auckland spokesman said a further announcement, as part of the $1 billion development, is likely next month.

Final design of the hotel is yet to be decided.

(Update adds comments from Waterfront Auckland spokesman).

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Ageed, Len is a tout.

In some cities hotel operators do pay local authorities a bedroom tax - not that they like it.

A few questions .
Who is Waterfront Auckland.
Are we giving an incentive, a tax payer funded advantage perchance.
Will Team New Zealand, also get a taxpayer funded incentive, this year to keep them going.
What incentive did anyone else involved get,? preferential room rates, perchance.
Will OIO insist on residency, perchance. How many more.
Will there be a Casino, a brothel attached, will there be a takeaway, a laundry  for the leftovers.
Will there be a Visa requirement, will it be fast tracked. Will they take Diners Club?.

Australia negotiating Free Trade Agreement with China
China is demanding to be allowed to import Chinese workers into Australia to work on projects funded by Chinese investors under a proposed free trade agreement, sparking concerns within the Abbott government of a backlash, according to reports

Well hopefully the OZ govn tells them to get stuffed.

Have you examined the fine print of the NZ-China FTA?

Regarding Chinese labour and the behaviour of Chinese companies working on projects, this story on the difference between Botswana and Zimbabwe is very interesting: (http://gga.org/stories/editions/aif-16-bridge-the-gaps/a-tale-of-two-nat...).
Botswana = effective rule of law, working democracy, very low corruption levels by African standards, solid institutions, happy to cancel contracts if companies misbehave.
Zimbabwe = weak institutions, one of the highest levels of corruption in Africa, unstable political system, undue influence by Chinese contractors.
My point is that even if Australia and NZ do 'have' to import labour, there are good and bad ways to do things, and people should stay vigilant and not be afraid to impose conditions which have sanctions if broken.
The problem is that many people are afraid to do so because they are afraid of the money-tap being turned off, the beneficiaries of which consider it to have potentially devastating effects on our late-capitalist low-growth societies. Therefore, these people are often afraid to speak up for fear of economic consequence.
Moral of the story: we should always have alternatives and not be afraid to use them. That requires good governance, political and moral spine, and a strong sense of ethics...

well done Len.
Auckland CBD has been moving towards the water for some time, and some top shelf accomodation is certainly needed down there.

Design the north wall of the Hotel at a 45 degree and stepped per floor to allow a panoramic water / city view. And what a fantastic sun trap, bars and restaurant area that area could be. Need that tram service to run to Britomart across a bridge. (Then onto St Heliers)

Nice idea - some of those future Tank Farm area apartments will have stunning views back across the viaduct marina to the city also.

Shame they will all be leashold.  Good for ratepayers i suppose.

Agreed, and a positive use of foreign investment.

Must make sure public space is given high importance.
Henderson got away with murder at Princes Wharf in this regard.

Well done Len, who's the interpreter again?
Loopy train set next, it will be funded as Private Public joint venture

And here was I thinking that Len's New Era started on a table at the Auckland Town Hall...

Why do we need another hotel down there when the one currently there went bankrupt?

Hoping western builders are involved in the construction. Chinese took over the building of several large hotels in Luanda, Angola - one of which I spent 40 mins in the lift when the system got screwed. Wasn't long before everyone started using the stairs only for a 10 story hotel.

FYI, I have updated the story with some comments from a Waterfront Auckland spokesman. And Auckland Council has also issued the following two press releases today;
The future of New Zealand’s first skyscraper, the 100m tall Auckland Council Civic Administration Building, is in the balance.
To be vacated by the council later this year for new headquarters at 135 Albert Street, the building has serious structural issues and would require an estimated $70million retrofit to give it a new lease of life.
The council has no further identifiable use for the building – designed in the 1950s and opened in 1966 – so it faces possible demolition or refurbishment for other uses, the Finance and Performance Committee heard today.
At the leading edge of building technology when constructed, the building is not listed for protection but two recent assessments suggest it worthy of Category A or B scheduling. Category A listing would limit the type of renovation permitted.
Refurbishment would have to include removing asbestos installed during construction as a fire retardant.
The committee decided to test the market for investor interest in refurbishment and at the same time request Regional Facilities Auckland, a council controlled organisation, to include the building in a review of possible future uses of the Civic /Aotea Centre precinct.
“Market testing and precinct planning opportunities will allow us to determine the future of the building with a complete picture of options and costs,” said committee chair Councillor Penny Webster. 
Staff will report back before the end of the year.
And this one;
Improved economies of scale from the amalgamation of the eight local authorities have helped Auckland Council maintain services at reduced cost, says a council report on efficiency savings.
Average rates increases have reduced year on year from previously anticipated rises while capital works are nearly double that of the former councils.
Annual operating savings to June 2013 were $131million and are budgeted to be $188million by June 2018.
Savings have come from benefits including:
- simpler and better information technology
- better purchasing and tendering processes
- bringing more work in-house to reduce reliance on external resources
- reducing the number of office buildings occupied.
“The benefits of amalgamation become more evident with each year,” said Councillor Penny Webster, chair of the Finance and Performance Committee.
“We’re running a ruler over everything we do as we manage ratepayers money.  That’s what is expected of us and we are delivering savings while pressing ahead with projects that will make the city a .better place for residents to live in, enjoy, and prosper,” she said.

Perhaps you could have saved it for the Friday Funny.
They obviously are trying to outdo other people in that department.

The savings would be even more if they reined in the corruption and ticket clipping at Auckland Transport.

Are you tlaking about the Pirates.........Paid by your money..........to steal your money?