Should we sell our car parking buildings, or park the idea?

We think it makes sense to sell our city centre car parking buildings to help fund our city centre transformation and other capital projects, but we want to know what you think.

The issue

In our 2021-31 Long-term Plan Amendment, we noted that half of the $303 million investment needed for Te Manawataki o Te Papa – the heartbeat of Te Papa (our Civic Precinct Masterplan to transform the city centre) would have to come from sources other than rates. 

Options included government grants and the potential sale of non-core council assets, such as our carparking buildings.

What we’re proposing

We own two carparking buildings in central Tauranga: Spring Street carparking building (453 carparks) and Elizabeth Street carparking building (620 carparks), and we think it makes sense to sell them to enable Council to use the funds generated for capital projects (including Te Manawataki o Te Papa) that will help meet the community’s needs.

This would include ensuring that the car parking buildings continue to supply publicly available carparks for at least 15 years.

If we decide to go ahead with the sale following public consultation, the timing would be market-driven to maximise the proceeds and achieve the best commercial outcome for our communities.

Crunching the numbers

In December 2022, KMPG assessed the sale potential of the two car parking buildings on Council’s behalf. This report concluded that:  

interested parties suggested the buildings should continue as car parks  
redevelopment of the sites is unlikely 
the seismic ratings of the buildings may impact their value
cashflows, rather than land or building values, would determine the sale price.

The values of the parking buildings are largely dependent on their future revenue assumptions. We are forecasting that, as the city centre achieves its potential (and on the basis that road pricing or parking levies are not implemented in future): 