Council approves extra funding for city block project

Invercargill City Councillors approved an additional $16 million be put into the City Block Development. PHOTO: LAURA SMITH

AN extra $16 million is being pumped into the Invercargill City Block development taking the Invercargill City Council (ICC) contribution up to $46 million.

ICC councillors on Monday voted to approve the recommendation, which said the community well-being outcomes outweighed the risk in investing in the proposal.

However, it was noted that should Central Government invest money through the “Shovel Ready” fund, ICC would need to invest less.

When one of the project investors withdrew $21 million of his contribution last year, there was a funding shortfall and the council was advised that without that dollar amount, the project was unlikely to go ahead.

Public consultation took place in May and June to garner what ICC should contribute. The majority of submissions, 60%, supported the total contribution be $46 million.

While the vote to approve it was unanimous, there was confusion about what the shareholding meant for ICC and whether the project would become a council-controlled organisation (CCO).

The matter was brought up by councillor Nobby Clark, who asked for clarification on equity and shares.

Finance group manager Dave Foster said they were the same thing.

“The question we run into with this one is that all the shares we acquire stands equal with all other equity.”

Cr Clark asked if ICC was going to put in $46 million and the other main investor $25 million, why ICC was not “going towards” a CCO.

“If one council, or more than one council, holds greater than 50% of the equity in a company, then it is regarded as a CCO,” Mr Foster said.

However, he said one distinction was the type of equity taken.

After more discussion on the matter, ICC chief executive Clare Hadley advised the council go into a public-excluded period to receive further clarification.

The vote was made when that had been received.Sports ShoesAir Jordan