The 70,000 visitors “forecast” is
considerably less than the numbers presented to the public at the time the project
was promoted by Prosper Northland Trust, which had been formed to steer the
project. This is how they described it:
“Hundertwasser & Wairau Maori Art Centre is an unprecedented catalyst for growth in Whangarei District. The Deloitte Feasibility Study and Economic Impact Assessment have been reviewed and updated by leading Wellington-based consultants Crowe Horwarth, engaged by Prosper Northland Trust…This review confirms the Deloitte report as being conservative…Deloitte’s representatives stood in WDC’s Council Chamber in 2011 and expressed the utmost confidence that their findings would be vindicated. They found that even in the prevailing circumstances some 150,000 people would visit the art centre annually…
The expert report prepared by
Deloitte said the ‘break-even’ point for the project is 95,000
visitors per annum, and… “will be profitable well before 2022”.
They added the project will:
·
Not cost the WDC any money after the initial
$2.8m investment in making the building ready for renovation and is forecast to
return a profit to WDC when it is gifted back to the city;
·
Be profitable well before 2022; and
·
‘Cost overuns’ and ‘financial operating’ risks
to WDC for Hundertwasser are considered low.
How did these experts get it so
wrong?
To be fair, forecasting is
fraught with uncertainties, but experts are paid the big dollars because they
presumably can recognise the difference between reality and fantasy.
The COVID lockdown and subsequent
disruption is a significant factor, but with tourism now near pre-COVID levels,
that argument is losing credibility.
The numbers show that
Hundertwasser is attracting a fraction of the 150,000 visitors that were
projected, and substantially below levels required to break even.
A $2 million contingency fund
intended to cover operational shortfalls for the first 10 years was
significantly depleted when a $750,000 guarantee from the Ngatiwai Trust Board
was “dissolved” by the WDC in a confidential meeting in August 2023. The
remaining $1.25 million has been largely or fully drawn down.
On the bright side, it appears that a
free admission day held on the 20th of February was a tremendous success,
and another one may be held later in the year. However, while it is encouraging
to see a high level of interest in the building and/or its two galleries, free
admission does not address the financial challenges it faces.
Questions are now being asked whether the operating losses can be turned around or will the Council dig deeper into ratepayers' pockets to fund the annual operating losses.
The Trust that manages the
facility has yet to come up with solutions to address the financial challenges.
Much has been made of the potential for cruise ship visitors to boost revenue, but
that seems like wishful thinking. In 2024, there were 88 cruise ship visits to
the Bay of Islands and just three visits to Whangārei.
It's time for some honesty about
the future of this tourist attraction and some realistic projections about its
viability.