Extra Protection Proposed For Inner City Development
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Invercargill Central Limited is putting some contingency plans in place to safeguard its $165 million inner city redevelopment project.
The community is also being invited to give feedback through the Invercargill City Council, after it agreed in 2020 to invest up to $46 million to support the development.
ICL Ltd issued a statement this week saying its $45 million commercial bank loan has been affected by changes to its rent profile, that are different to original budgets set pre-Covid three years ago.
Instead it has been proposed that the council and HWR Richardson Group both put up a short-term loan of $22.75m each to cover that commercial bank loan shortfall.
Council Chief Executive Clare Hadley said while the project was progressing on time and budget, COVID-19 economic impacts, uncertainty around both the construction and supply chain, increased costs and limitations in bank funding for the development stage meant further investment and loan funding was required to complete the project.
The Invercargill Central Board has made a decision not to take up the commercial bank loan until the centre has been operating for one year.
“It makes commercial sense to eliminate the bank until 2023, meaning ICL shareholders could remain the first level of security over the entire project.” Invercargill Central Limited Board director Scott O’Donnell said.
There has been also been some increases in scope with the purchase of the Reading Cinemas building and link to the piazza and future medical centre, which was unbudgeted.
This new construction provides additional 800m2 of leasing opportunities, improved amenity with an inner city open space and additional access to and from the centre from Dee street.
ICL said the Invercargill City Council has advised this additional investment and short term loan is forecast to cost the ratepayer nothing and in fact may be a cash positive.
The board believes that funding the final portion of the development in this way provides significant flexibility compared to a commercial bank loan which comes with many terms and conditions.
Scott said shareholders want to have the ability to deal with any curve balls to ensure timely completion, and early consultation is the any way to achieve this.
The community is invited to give feedback on which options they prefer during the Next Steps for City Block consultation period, which runs from Thursday 13 January to Friday 11 February.
Further details on the options for both parts of the consultation and how to make your submission are available at icc.govt.nz/cityblockconsultation or at Council’s civic administration building at 101 Esk St, the Bluff Service Centre or the Invercargill City Library.
Related:
Big Brands Confirmed For Invercargill’s New City Block (full list)