SKYCITY increases projected costs for convention centre

Sunday 21st of December 2014

SKYCITY Entertainment Group lodged a resource consent application last Friday for the New Zealand International Convention Centre (NZICC). The application to Auckland Council is for the NZICC and an adjacent five star 300-room SKYCITY hotel and pedestrian laneway to be developed separately.

The resource consent application contains plans for a public gallery entrance from Hobson Street, multiple meeting rooms, a dedicated 3000-seat theatre and an exhibition floor the size of Eden Park’s rugby pitch. A luxury hotel will be built alongside the NZICC with a pedestrian laneway of bars, restaurants and boutique shopping running between the two buildings from Hobson Street to Nelson Street.

SKYCITY chief executive, Nigel Morrison, said that design improvements that will further enhance the quality of the convention centre facility, together with significant recent and expected construction cost inflation, has meant that early estimates of the full cost of the development have had to be revised to a range of $470-530 million depending on the level of future construction cost inflation. This includes land but excludes the new hotel and laneway. The sensitive treatment of the historic Nelson House and the Albion Hotel, have also added to the increased cost.

Who will pay for the difference in funding costs over and above SKYCITY’s $402 million contractual obligation has yet to be decide, however. Unless a fresh deal can be struck, it is possible that the existing arrangement of convention centre for pokies deal will collapse.

For now, SKYCITY and the Crown have agreed to extend the date for formally approving the preliminary design of the NZICC, which includes agreeing both the design and the total construction cost, until the end of February.

“The final timeline is still to be determined but once the designs for the NZICC are finalised with the Crown and resource consent is granted by Auckland Council, SKYCITY would hope to sign a binding construction contract in the final quarter of 2015 … SKYCITY expects the construction process to take approximately three years to complete after signing the contract”, said Mr Morrison.