Provincial Growth Fund
Provincial Growth Fund
Next Steps
Funding the investigation
We were formally notified recently that our Provincial Growth Fund (PGF) application for $16m to transform the Domain into a Tourism Precinct, will not be progressed.
We are now looking at options that we can progress without PGF funding and building this into our Long-Term Plan 2021-31 (our ten-year plan) which we will be engaging with the community on early in 2021.
Next Steps
Funding the investigation
Some aspects of this project (such as providing natural gas to the area), would likely be led and managed by others so we are still working through what opportunities Council would be best placed to support.
We’ve included $500,000 in our budget for 2020/21 to continue work on this project and/or our other Provincial Growth Fund project in Te Aroha.
For example, we could use the funding we're proposing to explore water, wastewater and housing issues further, as well as investigating opportunities for the Waharoa (Matamata) Aerodrome.
Funding the actual development
If we decide to proceed with any infrastructure to support an industrial hub at Waharoa, we would bring a detailed proposal back to the community for feedback as part of our 2021-2031 Long Term Plan.
Get updates
If you’re interested in getting updates on this project, sign up for email updates at www.mpdc.govt.nz/sign-up (choose the Talk Tourism Te Aroha project)
Phase 1 - Feasibility Study
Waharoa is strategically located, close to Port of Tauranga, under two-hour drive from most Auckland locations and at the centre of a major railway junction and on a State Highway. It is the logical eastern Waikato hub for economic activity.
The project has worked closely with Ngāti Hauā, local community, Crown agencies and business to develop a feasible plan to address the social, cultural, environmental and economic challenges faced in the community. We want to lay the foundation for a major increase in economic activity extending well beyond the immediate opportunities we have identified.
The feasibility study has proposed the following key projects:
- an employment and training hub
- a rail siding
- a gas pipeline extension to Waharoa
- Industrial Development including post-harvest food processing operations
- Increasing the capacity of the water and wastewater network
The study concluded the employment and training hub, rail siding and gas pipeline and food processing operations were the key things to get underway as soon as possible. These would act as a ‘catalyst’ for future development of Waharoa.
Phase 2 - Business Case
The purpose of the Waharoa Business Hub (“WBH”) Project is to lift over the long term and in a sustainable way, the economic, social and cultural wellbeing of Waharoa, a small community six kilometres north of Matamata in the Waikato. To achieve a step-change, aggregate investments of between $60-80m are planned in infrastructure, industry and employment connection.
The WBH Project has identified and progressed a set of interlocking masterplan projects that together, are necessary and therefore essential to lift economic, social and cultural wellbeing. This Business Case directly seeks funding for:
- A Crown/MPDC/Firstgas owned public private partnership (“PPP”) that will fund a gas pipeline extension to Waharoa. Gas availability is needed to provide for the Agri-Food Hub anchor project (outlined below). Annex 1 provides a detailed analysis of gas situational considerations.
- An Employment and Training Hub, to be situated in Waharoa. The Employment and Training Hub will address the poor connection of locals to access local employment opportunities, particularly for those young people who are not in education, employment or training (“NEET”).
In addition to these projects, the other linked critical projects are set out and comprise:
- Agri-Food Hub post-harvest facility that will create ~50 roles. This is the subject of its own PGF application.
- A Rail Siding, adjacent to Factory Road, that if proven, will provide direct rail connectivity from Waharoa to Port of Tauranga enabling significant Heavy Vehicle movement reductions off the State highway and local road network. This project will be developed and self-funded by the land owner.
- Matamata-Piako District Council (“MPDC”) investment in potable water and wastewater capacity.
- A separate Public Private Partnership funded residential housing initiative to lift the quality and availability of housing stock in Waharoa.
Since preparing the Business Case it is considered the Public Private Partnership proposal is not viable at this stage, as the Agri Food Hub project is not proceeding on the timeline initially envisaged which means there is insufficient demand for natural gas forecast.
An application for central government funding of the natural gas pipeline has been submitted. This request has unfortunately been declined. Council is now working with its stakeholders to look at re-setting the Waharoa Business Hub project to take into account the impact of Covid-19 and the available infrastructure.
Phase 2 - Business Case
The feasibility study (phase 1) highlighted that the existing natural, historical and cultural assets of the Te Aroha Domain (and its surrounds) could be enhanced and developed into a spa resort. Te Aroha is centrally located between Auckland, Hamilton and Tauranga, making it well-positioned for tourism.
Visitor Solutions were appointed to develop a business case (Phase 2) to assess the commercial viability of a new spa facility.
The business case concluded:
- A significant number of tourism opportunities exist in Te Aroha and many of them have widespread support from sectors of the community, including Mana Whenua.
- Based on available data, the best catalyst opportunity for tourism in Te Aroha is the development of a new spa facility, using the available geothermal resource.
- The spa development will create an environment that fosters private business opportunities. There are several individuals and entities that have expressed a desire to develop a range of new businesses on the back of the proposed spa.
- A series of spa options have been developed that take into consideration risk mitigation (these are detailed in the business case)
- Based on the estimated volumes, pricing, costs and capital costs, the redevelopment of the spa and pools in Te Aroha are considered financially viable.
- As a largely fixed cost operation, the financial viability is sensitive to changes in volume and price.
- Assistance from the Provincial Growth Fund should be sought for 50% of the cost of development of the Spa (circa $9.4 million with parking and escalation costs).
Read the full business case here
Matamata Piako District Council commissioned an addendum report to the Te Aroha Spa Business Case in order to determine what if any impact the COVID-19 will have on the project. The addendum focuses on post COVID-19 visitor impacts, capital cost changes, a review of financial models, an examination of new or changed project risks (and potential mitigation steps), economic impacts and employment contributions that can aid the COVID-19 recovery.
You can read the addendum report here
