Te Whare Hono o Tūwharetoa

The benefits of having our team working in the same building, as opposed to staying in separate offices:

• Cars and petrol costs – we are able to reduce the number of our fleet cars as we won’t need as many for our team to get around to the different locations.
• Electricity costs – we won’t be paying to heat, light and ventilate a whole pile of different buildings and the new building is a lot more energy efficient.
• Time saving – moving in between different buildings for meetings etc.
• Efficiency – just being able to pop your head in to ask someone a curly question rather than setting up a meeting time, booking a space, organising to get there and then travelling back to your office. While we use the phone and Microsoft Teams a lot, sometimes there’s just no substitute for a face-to-face meeting and collaboration.
• Our current office spaces are not all fit-for-purpose. While a lot cheaper than the new building, some of these offices are more suited to retail spaces and have no windows or natural light, which is not healthy for our staff as they work to support our community.

We originally asked for community feedback on building a new council building in 2018. After some back and forth, and numerous consultations with the community (see the timeline section below), we asked the community if they wanted us to build a new building or lease one in the 2021-31 Long-term Plan. We got 138 submissions and 81 percent were in favour of leasing.

Some of the benefits of leasing, as opposed to owning a building include:

• Avoided increasing debt to build the office in the first place. Estimated costs in 2020 were $33.4 million and construction costs have increased substantially since then.
• Development risk sits with the landlord, not Council.
• No building maintenance costs or rates to pay (and yes, we do get charged rates on buildings that we own).
• Provides certainty of annual leasing costs for the period of the lease agreement.
• It provides us with more flexibility as we can move out at the end of the lease if we like.

We are currently leasing 2152 square metres, in six different locations. The costs to lease this area is $456,939.50.

In addition, we have a seventh office that is currently owned by TDC. For the purposes of comparison, if we were to also pay to lease this, the cost would be $227,000 per annum for a total yearly lease cost of $683,000. This cost is for working spaces that are not fit-for-purpose and often without natural light.

The lease cost will be $1.27 million annually. The financial impact of the lease on rates is projected to be 0.51 percent per annum.

While no one can predict the future, independent advice was that in such an uncertain market, this lease represents good value and is lower than lease costs on similar buildings in other regional centres. Locking in the lease now also allow us certainty moving forward.

The lease assumptions from the 2021-31 Long-term Plan were aligned to the estimated cost and size of the building, based off the information we had at the time.

Since then, building costs have increased so unfortunately the cost of the lease of the building has too. The size of the building also increased slightly compared to our original assumptions. Many landlords increased rental costs during that time to cover the increase in their expenses.

When we signed our current leases some years ago, we were in a very different economic climate and our current lease costs reflect this. We would expect once we vacate these offices, the lease costs of these to future tenants would also increase to follow the market. We have been very grateful that our current lease costs have remained relatively low over the past few years. We also own the largest office site at Rifle Range Road, which reduces current lease costs substantially.

Is there anything we are doing to try and recoup some of the costs from this lease being more than our current office leases?

Yes!

We have made significant savings across our council operations to make up for growing costs in many areas such as interest, electricity, insurance, and obviously things such as leases.

We are only leasing enough space for 70 percent of our Taupō CBD-based staff. We will be asking people to work from whatever desk is available instead of having one each. This is also made possible due to more collaborative working spaces and flexible working arrangements.

No, our Taupō customer service centre at 30 Tongariro Street will remain in this location.

If you need to find property information, pay rates or a parking fine, register your dog or get help with anything council-related, you will continue to find our friendly customer service centre team at 30 Tongariro Street

We also have customer service centres in Tūrangi and Mangakino.

Find out more about our customer service centre locations

We’ll be encouraging staff to bike, walk, bus, car pool or scooter to work. We know that doesn’t suit everyone though, so staff who drive will be asked to park outside the town centre and walk from there.

A fit out is when the interior of a commercial space is customised, so it is functional for the tenant. Te Whare is a new build so will not have a pre-existing fit-out.

The fitout of this building includes things like internal walls, technology, kitchens, toilets, floor coverings, etc. We are doing as much as we can to reduce these costs by re-using equipment and furniture that we already have. The fitout cost is a one-off cost of $5.9 million, which is being capitalised and spread across several years.