Late Reports Agenda of Ordinary Council meeting

Ordinary Council meeting Agenda

20 March 2023

11.6 Tauranga Art Gallery - approval of funding arrangements for new entranceway onto Masonic Park

File Number: A14431330

Author: Anne Blakeway, Manager: City Partnerships

Authoriser: Gareth Wallis, General Manager: City Development & Partnerships

Purpose of the Report

1. The purpose of this report is to present a summary of the Warren and Mahoney feasibility report, and the updated cost estimates, for the new Tauranga Art Gallery entranceway as part of the Masonic Park development project, for approval and to enable works to proceed to developed and detailed design.

Recommendations

That the Council:

(a) Receives the report "Tauranga Art Gallery - approval of funding arrangements for new entranceway onto Masonic Park".

(b) Notes that, following a report prepared by architects Warren and Mahoney, the full cost of requirements needed to deliver on the project objectives has been identified at a total cost of $3.38 million.

(c) Approves the $1.88 million balance of funds needed to create a total project budget of $3.38 million, to be phased over the next two financial years, noting that this will not have an impact on rates because:

- $250,000 will be funded through a private benevolent fund donation.

- $754,000 will come from already approved Tauranga Airport Reserves; and

- $876,000 will be funded through corporate sponsorship and/or other external funding sources, with details to be confirmed once formal agreements are in place.

(d) Notes that these cost estimates will be further refined through the developed and detailed design phases and will be reported back to the Public Realm and Waterfront Steering Group Committee, and the Te Manawataki o Te Papa Governance Group.

Executive Summary

2. Council adopted the Te Manawataki o Te Papa preliminary design and cost report on 12 December 2022.

3. This report presents an update on the proposed new Art Gallery entranceway onto Masonic Park, including a floorplan of the proposed expansion (provided at Attachment 1), and finalised cost estimates (provided at Attachment 2).

4. An initial placeholder budget of $1.5 million was included in the Long-term Plan Amendment (2022) for external works associated with the relocation of the Art Gallery entranceway.

5. The results of the proposed floorplan expansion, prepared by architects Warren and Mahoney, means that the costs associated with the internal changes and fitout needed for the project have now been identified and can be included in the overall project budget.

6. The projected cost is therefore expected to total $3.38 million, $1.88 million above the original placeholder budget of $1.5 million included in the Long-term Plan Amendment (2022).

7. It is important to note that included in this estimate is a 15% project contingency sum of $441,000, and escalation costs of $442,000. However, if the work is completed in 2023/24, escalation costs will reduce to $150,000.

8. The cost estimates will be further refined through the developed and detailed design process and will be reported back to the Public Realm and Waterfront Steering Group Committee, and the Te Manawataki o Te Papa Governance Group.

9. The $3.38 million costs will be funded by the following means:

- $1.5 million already committed in the Long-term Plan Amendment (2022)

- $250,000 will be funded through a private benevolent fund donation;

- $754,000 will come from already approved Tauranga Airport Reserves; and

- $876,000 will be funded through corporate sponsorship and/or other external funding sources, with details to be confirmed once formal agreements are in place.

10. This project is scheduled to be delivered by July 2024.

Background

11. Warren and Mahoney have been engaged to assist in the development of two workstreams at Tauranga Art Gallery as part of the Te Manawataki o Te Papa civic precinct development programme.

12. They have proposed a two-stage process to allow rapid iteration of options and sign-off of a preferred design direction under Stage One, and subsequent development of this option into a concept design as Stage Two.

13. Stage One includes re-orientating the Gallery entrance, which will increase the prominence and visibility of the main entry, while also improving connectivity to Masonic Park and the rest of Te Manawataki o Te Papa precinct.

14. The addition of ‘jewel box’ pop outs will expand the Gallery footprint to the property boundaries, while also providing an opportunity for a potential café and retail offering.

15. The Warren and Mahoney report also proposes changes to the existing internal feature stairway, to further open up the main atrium space, increasing flexibility, spaciousness, and exhibition wall space.

16. In parallel with this piece of work, future development options were considered to ensure that the Stage One piece of work does not prejudice or restrict development of the Art Gallery in the future.

17. Stage Two works will commence on formal signoff of the preferred development option.

Strategic / Statutory Context

18. Our community has told us loud and clear that they want a vibrant, well-planned city centre that is inclusive, accessible, and diverse, with more activities and events for all to enjoy.

19. The Tauranga Moana Waterfront Plan, adopted by Council on 5 September 2022, provides a comprehensive conceptual layout to guide future development along the city centre’s waterfront from Dive Crescent to Tunks Reserve, including Masonic Park. The overall purpose of the Waterfront Plan is to reconnect and amplify the city centre’s connection to the harbour through the transformation of the waterfront into a premier recreational destination.

20. Te Manawataki o Te Papa has clear alignment with the city and Council’s strategic direction, from the aspirational community vision to Council’s action and investment plans.

21. One of six strategic priorities for Council is to drive delivery of the City Centre Masterplan – Te Manawataki o Te Papa, the broader City Centre Action and Investment Plan, and the Te Papa Peninsula Spatial Plan to revitalise and reactivate the heart of the city.

22. Te Manawataki o Te Papa clearly seeks to establish Tauranga’s city centre as the commercial, civic and cultural heart of the Western Bay of Plenty sub region – the cultural and community focus of the city centre, and a unique civic destination for the stories and decision making of Tauranga and its people.

23. As Tauranga continues to grow, our city centre will continue to transform from a commercial business centre into a sub-regional destination, providing a wide range of activities and facilities that support our economy, strengthen our community, and celebrate who we are.

Options Analysis

Option 1 – Council approves a total project budget of $3.38 million for the Tauranga Art Gallery Masonic Park entrance re-realignment project – RECOMMENDED

24. Noting that $1.5 million was previously approved as a placeholder budget in the Long-term Plan Amendment (2022).

25. Noting that the $1.88 million balance of funds required will not have an impact on rates, but will be funded by other sources:

- $250,000 will be funded through a private benevolent fund donation;

- $754,000 will come from already approved Tauranga Airport Reserves; and

- $876,000 will be funded through corporate sponsorship and/or other external funding sources, with details to be confirmed once formal agreements are in place.

Advantages

Disadvantages

· Improved functionality of design, as per recommendations from Warren and Mahoney, and feedback from Tauranga Art Gallery.

· Increased prominence and visibility of the Art Gallery main entrance, whilst also improving connectivity to Masonic Park and the rest of Te Manawataki o Te Papa precinct.

· Expands the Art Gallery footprint to the property boundaries, while also providing an opportunity for a potential café and retail offering.

· The project can proceed at pace, with Council making progress towards delivering on the broad community benefits of the Te Manawataki o Te Papa programme.

· Additional costs will not have an impact on rates.

· Will cause disruption to the short-term Art Gallery operations, in particular to the education programme.

Option 2 – Council does not approve a total project budget of $3.38 million for the Tauranga Art Gallery Masonic Park entrance re-realignment project. – NOT RECOMMENDED

26. This will mean that the total budget remains at the $1.5 million, for external work associated with the relocation of the Art Gallery entranceway only.

Advantages

Disadvantages

· Limits further expenditure on this particular project, which may present an opportunity cost for the external funding from the corporate sponsor to be utilised elsewhere.

· Will still cause significant disruption to Art Gallery operations, in particular to the education programme.

· Decreased functionality of design, not incorporating recommendations from Warren and Mahoney, or feedback from the Art Gallery.

· Lack of alignment with the Tauranga Moana Waterfront Plan, and the City Centre Action and Investment Plan (2022).

· Decreased prominence and visibility of the main entry, with no opportunity to expand the Art Gallery footprint, or realise increased opportunities for a café and retail offering.

· Council will make less progress towards delivering on the broad community benefits of the Te Manawataki o Te Papa programme.

Financial Considerations

27. Attachment 2 outlines the project costs for key elements of the development, as outlined in the Tauranga Art Gallery Feasibility Report.

Location		Total cost NZD
Masonic Park corner		$1,072,000
Wharf Street corner		$456,000
Stairway upgrade		$33,000
Internal works		$85,000
Front of house staircase		$139,000
Estimated net cost		$1,785,000
Margins and adjustments
Design development risk	7.5%	$134,000
Professional fees and consents	19%	$365,000
Client direct costs	5%	$114,000
FF&E, AV and ICT		$100,000
Escalation for three years	17.7%	$442,000
Project contingency	15%	$441,000
Estimated total cost		$3,381,000

Legal Implications / Risks

28. The projects that make up this overall programme of work include conservative assumptions regarding the level of project contingencies and cost escalation. However, there is always a risk that significant unplanned events may have an impact on overall and eventual project costs.

29. Included in the estimate from Rider, Levett and Bucknall, is a 15% project contingency sum of $441,000, and escalation costs of $442,000. However, if the work is completed in FY2023/24, the escalation cost allowance will reduce to $150,000.

30. The additional $1.88 million of costs, over and above the original placeholder budget of $1.5 million, are expected to be fully funded through external funding, which may be at risk if the funders decide not to contribute towards this project.

Significance

31. The Local Government Act 2002 requires an assessment of the significance of matters, issues, proposals and decisions in this report against Council’s Significance and Engagement Policy. Council acknowledges that in some instances, a matter, issue, proposal or decision may have a high degree of importance to individuals, groups, or agencies affected by the report.

32. In making this assessment, consideration has been given to the likely impact, and likely consequences for:

(a) the current and future social, economic, environmental, or cultural well-being of the district or region;

(b) any persons who are likely to be particularly affected by, or interested in, the decision; and

33. In accordance with the considerations above, criteria and thresholds in the policy, it is considered that the decision is of low significance.

ENGAGEMENT

34. The proposal to implement Te Manawataki o Te Papa required an amendment to the Council’s Long-term Plan 2021-31 under section 93(5) of the Local Government Act 2002. As such, a full consultation process was undertaken between 25 March to 26 April 2022.

35. Taking into consideration the above information, if Council approves Option 1, further community consultation is assessed as not being required at this stage of the project.

Click here to view the TCC Significance and Engagement Policy

Next Steps

36. The cost estimates will be further refined through the developed and detailed design phases and will be reported back to the Public Realm and Waterfront Steering Group Committee, and the Te Manawataki o Te Papa Governance Group.

37. This project is due to be delivered, in conjunction with the Masonic Park development, by mid-2024.

Attachments

1. Tauranga Art Gallery capital project - floorplan - A14496177 ⇩

2. Tauranga Art Gallery Estimates - Baseline Scheme - A14434874 ⇩


AGENDA Late Reports Ordinary Council meeting Monday, 20 March 2023

Date:	Monday, 20 March 2023
Time:	9.30am
Location:	Bay of Plenty Regional Council Chambers Regional House 1 Elizabeth Street Tauranga
Please note that this meeting will be livestreamed and the recording will be publicly available on Tauranga City Council's website: www.tauranga.govt.nz.
Marty Grenfell Chief Executive