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The Wanaka Community Board has agreed to stump up $500,000 from its fiercely protected asset sales reserve fund to help write off debt and strengthen relationships between the cash-strapped Wanaka Community House Charitable Trust (Wanaka Community Hub) and its tenants.

Trust chairwoman Yeverley McCarthy said she and her team members were “absolutely delighted” to be close to resolving a three-year funding crisis.

The Wanaka Community Hub had been a fantastic resource since it opened in 2019, and especially during Covid, she said.

The trust was now “waiting with bated breath” for the Queenstown Lakes District Council to rubber-stamp the Wanaka board recommendation at its April 28 meeting, she said.

“If this grant comes through it will leave us with $120,000 in debt, out of nearly $4million that it cost us to build this building.”

“I want to make the point that we had a lot of support from big funders [such as community trusts] but our trust, on its own, raised $660,000 for this town and for this hub any of the big gifters,” she said.

The Alpine Community Development Trust (Community Networks) and other tenants raised concerns about relationships with the trust in September last year.

Aspiring Law stepped in to mediate. A confidential resolution was reached in February.

Mrs McCarthy said relationships were “all good” and issues were resolved in half a day.

When the $3.95million Wanaka Community Hub building opened in November 2019 the trust had outstanding debts of $800,000, including extra costs incurred when building contractor Arrow International went into liquidation in April 2019.

The council gave a $500,000 interest-free loan to tide the trust over.

The trust had to cancel fundraising events due to Covid restrictions, but later this year there would be a Upper Clutha House and Garden Tour with Wanaka Rotary and a Wanaka Wonder Chef with Wanaka Mitre10, Mrs McCarthy said.

The majority of the board recommended the council convert the loan to a grant, to be paid from the asset sales reserve fund and effective immediately on approval.

The discussion was conducted partly in public and partly with public excluded, to protect the record of settlement.

Board deputy chairman Ed Taylor said the council needed to learn lessons from the community hub and get involved with community-initiated projects at the start.

He preferred not to use the asset sales reserve fund but said he could live with it.

He warned it should not set a precedent for other groups building assets for a community purpose.

Councillor Quentin Smith, the board’s representative with tenant Alpine Community Development Trust, recommended the loan be converted to a grant but not from the asset sales reserve fund.

Council chief financial officer Stewart Burns confirmed the council would make the ultimate decision but the board’s views about using the asset reserve fund would be taken into account.

Queenstown Lakes District Council general manager of community services Thunes Cloete said if the grant came from the asset sales reserve fund, it would not impact on Wanaka ratepayers.

It it came from the general rate, it could spark a minimal rates increase for Wanaka, plus objections from Wakatipu about funding a Wanaka facility.

If the loan was not converted into a grant, the council would be repaid but could attract negative publicity about not supporting the community and miss an opportunity to achieve the mediated outcomes between the hub and its tenants, Dr Cloete said.

The board’s recommendation includes a condition about who gets first dibs on hub bookings.

Wanaka’s $15.6million asset sales reserve fund was created after the council sold land in Scurr Heights in 2016.

The fund has been slowly whittled away on major council-initiated projects, such as the Wanaka Aquatic Centre ($6million, opened 2018), the Mt Iron reserve purchase (not yet disclosed) and the new Luggate community hall ($1million, under construction).