Tairawhiti Navigational Project

Transcription

1 Tairawhiti Navigational Project Pre-feasibility Study FINAL February 2010 Prepared for Tairawhiti Development Partnership Prepared by Tourism Resource Consultants In association with Stimpson & Co.

2 EXECUTIVE SUMMARY This is a pre-feasibility study of the Tairawhiti Navigational Traditions Project. It draws together individual light infrastructure and interpretation components that collectively make up a viable cultural heritage product for Tairawhiti. The draft report has been prepared for the Navigational Traditions Working Group for further discussion and feedback. In summary, the project is worth pursing both from a social and an economic perspective, as it will benefit residents and visitors. The emphasis has been on simplifying the concept and identifying some initial key light infrastructure projects to create a practical and achievable way forward. This creates a starting point, which will over time see other elements of the navigational story and other sites within the region added to the experience. The Navigational Traditions Project is not only about enhancing and growing Eastland s tourism industry, but also maintaining its share in an increasingly competitive marketplace. Other regions are investing in infrastructure to stimulate economic growth and encourage tourism business development. Eastland requires this investment too. The Concept The proposed Navigational Traditions Project can be described as: Coordinated light infrastructure and story development at key sites in the region to acknowledge our heritage, generate business opportunities and affirm the appeal of Tairawhiti as a great place to live and visit. Additionally there are a number of other key elements that further illustrate exactly what the project is and hopes to achieve: Navigational traditions provide a unifying theme to tie the region together, with the key sites developed under a consistent brand. The sites developed must read as a connected experience with a consistency of development style that assures visitors of a quality experience. The proposed infrastructure needs to be supplemented by private sector businesses that provide additional services (e.g. tours, retail, food and beverage, accommodation) that further enrich the visitors stay and provide a total experience. Each site will provide an opportunity for different stories to be told and to reference other sites and activities in the wider region. While this is a Tairawhiti wide project there is no denying the importance of the Gisborne inner harbour sites and the city s role as a hub or mooring place (e.g. Te Toka a Taiau) for the Tairawhiti Navigational Project. i

3 The Key Project Sites The developments would include the Gisborne inner harbour and several other sites within the region. These sites will require further consideration prior to being finalised. Gisborne Inner Harbour Heritage Precinct The most significant investment for this project would be in the Gisborne inner harbour area including the Titirangi Reserve and the Cook Landing Site. The number of sites, scale of development and the national significance of these sites make this component a priority for the success of the Navigational Project. Key components for the Gisborne inner harbour include: River Boardwalk along the existing wall between the river and port providing access to the first meeting point between Maori and European cultures Turanganui River bridge from the centre wall to the existing walkway near the Waikanae Stream Airbridge over the road to the Cook Landing from Titirangi Reserve Cook Landing Site National Historic Reserve - enhancement, interpretation and landscape of the site Titirangi Reserve rationalisation of existing tracks and development of new tracks, interpretation and signs. Information/bookings/retail kiosk in the inner harbour precinct Tairawhiti Museum opportunity to incorporate a stronger navigational theme New sculptures and interpretive signs throughout the precinct Completion of the remaining walkways along the Turanganui, Taruheru and Waimata Potential Regional Sites This would include light infrastructure development such as interpretation displays, sculptures, short walks, lookouts, car parks and possibly shelters and toilets to enhance the experience and connect to the navigational theme. The focus should be on doing fewer sites to a higher quality rather than spreading resources to thinly. Further discussion with the key stakeholders at each site is required, but potential sites could include: 1. Pilots Hill & Rangi-houa Pa, Wairoa 2. Tolaga Bay & Cook s Cove 3. Whangara 4. Mahia Peninsula 5. Anaura Bay 6. Mount Hikurangi, Ruatoria ii

4 There have been a number of other navigational traditions concepts, ideas, story themes and initiatives with links to the project discussed over the years. Many of these will add greatly to the overall theme and strengthen the experience for visitors and residents. However, in the short term (the next 5 years) the focus will be on the infrastructure development mentioned above and telling the stories directly associated with those sites to ensure the project remains manageable and achievable. Rationale There are a number of compelling reasons for adopting a light infrastructure approach to developing the navigational traditions project, these include: Practical and achievable the concept of developing the Navigational Traditions Project through light infrastructure and interpretation creates a practical and tangible approach and the ability to tackle things on a site-by-site basis. Low risk development of light infrastructure at key sites provides a fairly low risk approach, in comparison to building a single multimillion dollar facility. The developments can also be phased over several years. Proven technique this type of development technique (i.e. light infrastructure as a catalyst for businesses development and indirect economic returns) has a proven track record and has worked in many regions such as the West Coast of the South Island and New Plymouth. Strong Business Case for Proceeding The economic impact and cashflow analysis indicate that the project is definitely worth taking to the next stage. Cashflow analysis The cashflow analysis illustrates how Eastland can clip the ticket and derive wider benefits from the investment of public dollars in light infrastructure at key sites. The costs and benefit assumptions used as the basis for the cashflow analysis err on the conservative side: annual value added at maturity is estimated at $1.7 million a capital expenditure estimate of $6 million (see capital expenditure assumptions in Appendix 2) the infrastructure is completed over 5 years the full realisation of benefits occur by year 7 the project is measured over a 20 year time frame iii

5 The project could yield a net present value of around $4.5 million, which equates to a positive benefit cost ratio (BCR) of for the project. Economic Impact The overall economic impact anticipated for the navigational project would be $2.7 million in year 7 of the project. This assumes direct value added at 40% of direct output and a type II multiplier of 1.5 This would equate to approximately 44 full time equivalent (FTEs) positions for the region. Risks One of the greatest risks for the project as a whole is that certain components outlined in the concept are not completed. This would adversely affect the social and economic impact of the project. As it stands, the impact is derived from the sum of all the parts to the project and needs a critical mass of sites and infrastructure to appeal to people to stay longer and spend more. This is equally true for the uptake by and support from local residents. Strong Social Argument for Proceeding A strong case can also be made for doing this development for social benefits and the people of Tairawhiti regardless of its economic outcomes. This development is in many ways a community asset and should enhance the region as a place to live and work. Agree on Project Coordination and Next Steps A critical factor in the success of the Navigational Traditions Project will be the ongoing coordination of the project from within an entity that has the mandate, capacity and resources to undertake a management role. There are potentially three entities under which the project and a project manager could sit: Tairawhiti Development Partnership Management Trust (TDPMT) Eastland Community Trust (ECT) Gisborne District Council (GDC) Based on the consultation to date and the feedback from the Navigational Traditions Working Group meeting on the 3rd February 2010, the preferred option is for the project and the project manager to be positioned within the Gisborne District Council. 1 In this form of analysis a project is worthwhile pursuing if it has a Net Present Value of greater than $0 or a benefits to costs ratio greater than 1.0. iv

6 Project Manager The Navigational Traditions Project requires a project manager who is able to dedicate their time to coordinating all the elements of this project, especially over the next few years to ensure the site selection, design guidelines and development of the individual sites is undertaken in a coordinated and timely manner. The project manager would be responsible for driving the overall coordination of the project and regularly update the Navigational Traditions Working Group on progress. On a day-to-day basis they would report to the Community Planning and Development Manager of GDC. Funding Determining the funding sources for various aspects of the proposed infrastructure development is critical. Funding will be needed to not only cover the cost of developing the six sites, but also fund the initial concept and site planning work and overall coordination of the project at a regional level. The funding sources include but are not limited to: New Zealand Trade & Enterprise (NZTE), Gisborne District Council (GDC), Wairoa District Council (WDC), Eastland Community Trust (ECT), Eastland Port, Department of Conservation (DOC) and the New Zealand Transport Agency (NZTA). Following agreement in principal from TDP for this approach the next step would be to obtain GDC approval to recruit, on a contract basis, a new project manager for the Navigational Traditions Project that would be jointly funded by TDP partners (20%) and NZTE (80%) and be located within GDC. Action Plan An Action Plan is presented in this report outlining a sequence of development. While the bigger ticket items will require more discussion and planning there are a number of quick wins identified where planning and construction could begin almost immediately. v

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8 TABLE OF CONTENTS EXECUTIVE SUMMARY The Concept The Key Project Sites Strong Business Case for Proceeding Agree on Project Coordination and Next Steps TABLE OF CONTENTS I i ii iii iv VII 1. INTRODUCTION Background Objective of Study 1 2. RELEVANCE OF A TAIRAWHITI NAVIGATIONAL TRADITIONS THEME 1 3. THE BIG PICTURE Tourism in Tairawhiti 3 4. TAIRAWHITI NAVIGATIONAL TRADITIONS PROJECT The Concept Rationale The Proposed Infrastructure Developments Gisborne Inner Harbour Heritage Precinct Tairawhiti - Regional Project Sites Branding and Marketing BUSINESS OPPORTUNITIES Cultural and Heritage Tourism Products Food and Beverage, Retail, Accommodation Links to Touring Routes Meetings and Conferences Events THE BUSINESS CASE AND ECONOMIC IMPACT 15 vii

9 6.1. The Business Case Sensitivity and Risk Analysis Economic Impact Social and Community Benefits COORDINATING THE PROJECT Navigational Traditions Working Group Project Manager Role Concept design, site planning, and costing work Funding ACTION PLAN High Level Project Workplan ( ) Action Plan 24 APPENDIX 29 A1. Consultation List 29 A2. Estimated Project Capital Costs 31 A3. Business Case, Economic Impact and Visitor Market Assumptions 32 A4. Other related Navigational Traditions ideas, initiatives and stories 39 viii

10 1. INTRODUCTION 1.1. Background In 2005 Tourism Resource Consultants were commissioned by the Tairawhiti Museum and the Museum Working Group to undertake a tourism and economic assessment of the Tairawhiti Museum: Voyaging/Waharoa and Heritage Trail Project. This work centred on the concept of a new voyaging centre as a key attraction for the region. Since 2005 the project has moved to the Tairawhiti Development Partnership (TDP). However, for various reasons little progress has been made in developing a cultural heritage product based on the voyaging and navigational themes. In 2009 the Gisborne District Council through the TDP and with funding from New Zealand Trade and Enterprise (NZTE) commissioned this pre-feasibility study 2 to assess the merits of progressing with a project based on navigational traditions Objective of Study In essence this study is about re-engaging and working with key stakeholders (see Appendix 1) to draw together a set of viable concepts and clearly present these in a document that outlines an action plan for moving the Navigational Traditions Project forward. Consultation and facilitation to obtain clarity around the concepts has been a key focus, as well as solid practical and impartial advice to justify the concepts with potential that should be pursued. Solutions to issues or points of disagreement have been addressed where practical, although not all stakeholders will agree with all elements of the proposed recommendations contained within this report. 2. RELEVANCE OF A TAIRAWHITI NAVIGATIONAL TRADITIONS THEME One of the first study tasks was to again consider the relevance of the navigational traditions theme and consider the question, is this still a project worth pursuing? 2 The consulting team was led by Ross Corbett and Jimmy Young of TRC in association with David Stimpson and Richard Brooking. 1

11 The short answer is yes. The national importance of the Turanganui River as the creation of a nation site and meeting place of the founding cultures, Maori and European, is a compelling story that all New Zealanders should be made more aware of. Furthermore, the stories of early Polynesian waka and Captain James Cook bring an internationally significant dimension to the navigational theme. The opportunity to complement and enhance these stories by developing quality authentic cultural experiences and other heritage products presents a worthwhile opportunity for regional businesses, the local economy, and the people of Tairawhiti. 3. THE BIG PICTURE This section provides a high level overview of some key trends effecting tourism and the economy. Experiential Tourism globally, visitors are looking to learn more and connect with local people via stories in the communities they visit. Experiential tourism is the opposite of mass tourism that traditionally focused on package tours and vacations with low levels of personal involvement. Niche areas such as cultural and heritage tourism are well suited to this type of experience. Maori cultural tourism provides a unique point of difference for New Zealand in the global marketplace. Approximately 20% of all international visitors to NZ experience a Maori tourism product, while participation by domestic tourists is less than 1%. In 2006 over half a million (567,200) tourists participated in a Maori cultural experience, of which the vast majority (80%) were international visitors 3. Strong central government recognition and support for tourism New Zealand now has a Prime Minister as Minister of Tourism, which has raised the industry s profile considerably. The $50 million National Cycleway initiative has further heightened tourism s profile around the country and is beginning to create opportunities within regions. The government also announced late in 2009 that an additional $20 million would be available for marketing New Zealand internationally. And $5 million of this has been earmarked for joint venture marketing with the private sector. Opportunities for New Zealand to increase its presence in the global marketplace through the 2011 Rugby World Cup will assist the tourism industry long term. 3 Ministry of Tourism, Tourism Sector Profile Maori Cultural Tourism, March

12 3.1. Tourism in Tairawhiti Tourism in Eastland is still relatively under developed. While in the last several years there has been some new investment (e.g. new hotels) there has been little in the way of new experiences and products to refresh and diversify the industry. There remains a heavy reliance on traditional sun, sand and surf holidays, which have limited opportunity for adding further value to the local economy. Tourism in the Eastland region is under performing. The region has seen only a 1.8% rise in tourism GDP over the last 10 years, compared to the national average of 3.0%. Similarly business units have grown only 0.7% since 1999, while the national average is around 3.0% 4. Current status of the Eastland tourism industry In 2008, the Eastland Regional Tourism Organisation (RTO) area received 849,600 visits from both domestic and international travellers, with the domestic market accounting for 91% of visits. From 2009 to 2015, total visits to the Eastland RTO are estimated to grow 4.6%, or 0.6% per annum, similar to the Hawkes Bay RTO forecasts. However, this is well behind the Waikato (6.9%) and Bay of Plenty (5.6%) RTO s growth over the same period. Figure 1: Actual and Forecast Visits to Eastland RTO by origin of traveller and trip type (000 s) Source: Ministry of Tourism (Regional Tourism Forecasts , Eastland RTO) 4 BERL Regional Database (2010), Statistics NZ, Tourism Satellite Account 3

13 Key Visitor Markets The key domestic visitor night markets for Eastland are Auckland (31%), Bay of Plenty (15%), Waikato (15%) and Wellington (12%). International visitor nights are dominated by Australia (37%) with over one-third, followed by UK (16%) and US (10%). Cruise Industry The cruise ship industry in Gisborne has grown over the last few years, the port now attracts around 6 vessels per season between December and March. The vessels range in size from the 72 passenger Oceanic Discoverer to the 1,950 passenger Dawn Princess. Total cruise arrivals for Gisborne are estimated at 5,600 for 2009/ Product Development The bulk of the current market is made up of FIT domestic travellers who are primarily coming to the region to enjoy the summer climate and great beaches. New cultural and adventure products (e.g Tipuna Tours and Dive Tatapouri) have been established in recent years. As a result the demand from the international backpacker market is growing with operators like Kiwi Experience and Magic Bus now touring the region on a regular basis. However, there is still considerable scope to develop cultural and heritage tourism products and position Eastland as an authentic quality cultural destination. Under the navigational theme there would be business opportunities for marae stays, cultural performances and local concerts, guided tours and events. Access to the Region Eastland is fairly isolated with large driving distances to major urban areas. The closest large urban centres are Whakatane/Opotiki 160km to the north and Napier 216km to the south. Rotorua is Eastland s nearest international gateway airport (275km to the west) that offers a regular service between Rotorua and Sydney. Air capacity has increased recently with Eastland Community Trust providing a subsidy on landing costs to the airport since 2008 to encourage Air New Zealand to use its Q seat aircraft between Auckland and Gisborne. 5 Estimate of cruise passenger numbers from Eastland Port Expected Arrivals 2009/

14 Visitor Flows The main visitor flows into Tairawhiti are from the north and Bay of Plenty via State Highway 2. There is considerably less traffic volume around the East Cape route (SH35) via Hick s Bay and Ruatoria. Tairawhiti is off the beaten track and not generally a region that travellers pass through the vast majority are going there specifically. Figure 2: Indicative 2007 Visitor Flows in Eastland (estimates only) Source: Ministry of Tourism (2007) flows data 4. TAIRAWHITI NAVIGATIONAL TRADITIONS PROJECT Early on in the process it became apparent there was a need to clarify exactly what the navigational traditions project is in order to move things forward. While the concepts have been discussed in the community for years many people are still unsure just what it is. Another important element that came through strongly in the initial consultation is that stakeholders just want to see something happen and it did not have to be something big. 5

15 4.1. The Concept The proposed navigational traditions project can be summarised as follows: Coordinated light infrastructure and story development at key sites in the region to acknowledge our heritage, generate business opportunities and affirm the appeal of Tairawhiti as a great place to live and visit. Additionally there are a number of other key points or elements that further illustrate exactly what the project is and hopes to achieve: Navigational traditions provide a unifying theme to tie the region together, with the key sites developed under a consistent brand. The sites developed must read as a connected experience with a consistency of development style that assures visitors of a quality experience. The proposed infrastructure needs to be supplemented by private sector businesses that provide additional services (e.g. tours, retail, food and beverage, accommodation) that further enrich the visitors stay and provide a total experience. Each site will provide an opportunity for different stories to be told and to reference other sites and activities in the wider region 6. While this is a Tairawhiti wide project there is no denying the importance of the Gisborne inner harbour sites and the city s role as a hub or mooring place (e.g. Te Toka a Taiau) for the Tairawhiti Navigational Project. There have been a number of other navigational traditions concepts, ideas, story themes and initiatives with links to the project discussed over the years. Many of these will add greatly to the overall theme and strengthen the experience for visitors and residents and are acknowledged in a longerterm workplan in Appendix 4. To date the sheer size of the project and potential linkages to other themes has made it difficult to define a starting point. The concept outlined above, in the short term (the next 5 years), will focus on the development of several light infrastructure projects at key sites and telling the stories directly associated with them to ensure the project remains manageable and achievable Rationale There are a number of compelling reasons for adopting a light infrastructure approach to developing the navigational traditions project, these include: 6 Telling more than one story and giving recognition to the different views will enhance the experience and create opportunities for broader participation. 6

16 Practical and achievable the concept of developing the navigational traditions project through light infrastructure development creates a practical and tangible approach and the ability to tackle things on a site-by-site basis. Low risk this development of light infrastructure at key sites provides a fairly low risk approach, in comparison to building a single multi-million dollar facility. The developments can also be phased over several years. Proven technique this type of development technique (i.e. building light infrastructure as a catalyst for businesses development and indirect economic returns) has a proven track record and has worked in many regions such as the West Coast of the South Island and New Plymouth. West Coast Site Infrastructure Development Project In the case of South Westland, a $3.5 million Heritage Highway project was undertaken between 1989 and Aimed at keeping visitors on the West Coast for longer, the project developed a new visitor centre at Haast and established six new stopping places between Haast and Hokitika. These involved short walks, viewpoints, on-site interpretation and other amenities such as picnic areas, toilets and car parks. The project achieved its objectives in slowing people down, giving them more things to see and do on the West Coast. Site developments occurred during a time of increasing arrivals to New Zealand and the West Coast by international visitors. Sites such as Ships Creek and Knights Point, north of Haast, now receive over 300,000 visitors per annum. The rising tide of overseas arrivals to New Zealand coupled with the site improvements in South Westland gave many of the existing businesses and new tourism operators the confidence to establish new accommodation, guided tours and activities, food and souvenir outlets throughout the remainder of the 1990s. 7

17 Visitors access the beach at Ships Creek after walking through a shelter and raised lookout having interpretation displays and other information available within Visitors at the interpretation kiosk and lookout at Knights Point, South Westland Part of the Knights Point roadside stopping and interpretation site New Plymouth Coastal Walkway In the case of New Plymouth, the combination of a new coastal walking path ($7 million), development of the new Puke Ariki museum and I SITE and CBD landscape enhancement has led to a dramatic uptake by residents and visitors of the new walking / biking opportunity and a reinvigorated business community mainly cafes, restaurants and nearby shops. 8

18 Part of the more than 8km long New Plymouth Coastal Walkway as it snakes its way round the Kawaroa Park and Aquatic Centre, less than 1km from the CBD The Proposed Infrastructure Developments As stated in Section 4.1 all the sites will need to be developed in a consistent manner that pulls the whole network together. This consistency would extend to design guidelines and standards for: colour schemes, style and characteristics of the interpretive materials and any built structures. The following sections provide an overview of the proposed developments in the Gisborne inner harbour and several other potential regional sites. The regional sites will require further consideration by local iwi and stakeholders prior to being finalised. However, as a starting point the six sites presented in Section are already recognised as having significant navigational and cultural value, provide a good geographical spread and most would not require a large investment to enhance their existing appeal and link them to the Navigational Project. The focus should be on doing fewer sites to a higher quality Gisborne Inner Harbour Heritage Precinct The most significant investment for this project would be in the Gisborne inner harbour area including the Titirangi Reserve and the Cook Landing Site. The number of sites, scale of development and the national significance of these sites make this component a priority for the success of the Navigational Project. The Turanganui River and surrounds has a long association with voyaging dating back to the landing of various waka including the Horouta and then the arrival of Captain Cook s Endeavour. 9

19 Key components for the Gisborne inner harbour include: River Boardwalk construction of a boardwalk along the existing wall between the river and port would enable people to walk from the marina out towards the existing slipway. The most exciting possibility here is that it provides access to the point where the first meeting between Maori and Europeans took place. Turanganui River Bridge construction of a bridge over the river from the centre wall to the existing walkway near the Waikanae Stream that would link into the existing river trails. Airbridge to the Cook Landing Site the bridge would provide access from Titirangi Reserve to the Cook Landing site. It would solve the current safety issue involved with crossing the busy road on foot to access the site. It would also create a very desirable visual connection between the Cook site, Young Nick s Head, the sea and the western bank of the Turanganui River. Cook Landing Site National Historic Reserve undertake enhancements to improve the visitor experience on site through interpretation, landscape design and further developing the stories associated with the area. Some of these may be better told higher up on Titirangi Reserve where the connections between Young Nick s Head and the Cook Landing Site can be seen. Titirangi Reserve rationalisation of trails 7, new trail from Williams Cottage site to Kaiti Beach, new trail alignment (and suitable gradient) to summit from Williams Cottage, explore possibility of creating a loop circuit, airbridge to connect to Cook Landing Site, enhancement of existing sites (e.g. Cooks Plaza Lookout) in the reserve and additional interpretation 8 and signage. Information/bookings/retail kiosk the development of the inner harbour precinct also creates the need for an information kiosk and potential booking outlet for new tours and activities in an existing building (e.g. Shed 3) or a new one. Upgrading or replacing public toilets should also be considered. Tairawhiti Museum the museum would serve as a key anchor and entry point for the inner harbour. With the potential expansion of the facility to accommodate the permanent display of C Company Maori Battalion there is also the opportunity to incorporate a stronger navigational theme. New sculptures new sculptures in the inner harbour precinct will play a key role in the telling of stories and enhancing the experience. New interpretive signs new interpretive signs and associated structures (seats) are needed to help tell the stories and demonstrate to visitors that these sites are important. Current 7 Some trail initiatives for the reserve were proposed in the Walking and Cycling Strategy for Gisborne District The Titirangi Reserve Management Plan (2006) outlines a number of proposed works including track upgrades and extensions, however the LTCCP budget of $20,000pa makes much of the work dependent on external funding. 10

20 provision of signs and related amenities are almost totally inadequate and not in-keeping with site significance. Walkways complete the remaining walkways along the Turanganui, Taruheru and Waimata Rivers to better connect key sites like the museum to the inner harbour and onwards to Kaiti Hill and the Cook Landing Site. Enhancing pedestrian access and linkages from Gladstone Road (e.g. CBD) into the inner harbour area is also key. Stories linked to the various sites within the inner harbour related to the navigational theme could include: Landing place of Paoa and Kiwa s Horouta waka Landing place of Cook s Endeavour First meeting of British and Maori cultures and the first hongi Hapu and iwi stories of navigation and first encounters from this landing site History of the Port of Gisborne Potential for contemporary stories around waka ama, cruise ships and super yachts The finished network should create a seamless pedestrian friendly route from Waikanae Beach to Kaiti Beach, and from the CBD and Museum. Figure 3: Proposed Gisborne Inner Harbour Infrastructure Development 11

21 Tairawhiti - Regional Project Sites As mentioned earlier the following project sites represent an initial selection that fit within the navigational traditions theme, have stories of significance associated with them and in some cases would require only minimal development to provide a quality experience. However, further discussion with iwi and local stakeholders is required to finalise these sites. The focus should be on doing a few (e.g. 6 maximum) sites to a high standard initially, before branching out to include other sites in the region. 1. Pilots Hill & Rangi-houa Pa, Wairoa - this site, which the Wairoa District Council (WDC) in association with the community has started planning to develop as part of their Wairoa Township River Walkway, lends itself well to the navigational theme. 2. Tolaga Bay & Cook s Cove - this site has strong links to Cook as the Endeavour stopped here for six days to replenish supplies. There is an existing walkway between Cook's Cove and Tolaga Bay and supporting infrastructure within the community of Tolaga Bay, including an established guiding business. 3. Whangara made famous as the filming location for the movie Whale Rider. Development at this site would be small scale and tourism experiences would focus on guided tours of the Whitireia Meeting House and community in close consultation with Ngati Konohi. 4. Mahia Peninsula the Te Hoe Whaling Station is a site of important early social contact between European and Maori around the mid 1850s that could lend itself to a navigational interpretive theme. The site contains numerous features (e.g. hut footprints, whale processing areas) many of which were uncovered during a 2005 archaeological dig. The site also contains evidence of earlier Maori occupation. 5. Anaura Bay located on the coast 6km from SH35 and acknowledged as Cook s second landing site in New Zealand. The bay also has some existing infrastructure with a DOC camping area and a privately operated camping ground and an established native bush walk. 6. Mount Hikurangi, Ruatoria the most prominent landscape feature in the region and the resting place of Nukutaimemeha, the waka (canoe) of Maui. The mountain has nine massive carvings, carved by students from Toihoukura under the guidance of Derek Lardelli. Ngati Porou manage the access and also offer guided tours of the mountain. Further consultation with Ngati Porou is required to determine how to proceed with linking this site to the project Branding and Marketing Navigational traditions provides a unifying theme enabling a connection between key sites in the region. This is important for residents as well as visitors. Communicating the navigational theme thus forms an important part of the overall project. 12

22 This could be achieved through the integrated design signs and displays at key sites, making them instantly recognisable as a network 9. The development of brochures and maps that illustrates the network and how each site provides a piece of the Tairawhiti navigational story would also provide a valuable tool for visitors. A strong on-line presence is also required through linked websites and social network sites. Tourism Eastland branding the current regional branding is centred on a First to see the light theme and a traditional sun, sand and surf holiday. There is an opportunity through the Navigational Project to create a strong cultural sub-brand that is consistent with Gisborne s reputation for sun, surf and beaches. A region of firsts, where Captain James Cook first set foot in New Zealand and where the first hongi (meeting of the two cultures) took place on Te Toka a Taiau and the first haka was performed for an international audience. That meeting has had an enduring effect, leading to the founding of a nation, Aotearoa New Zealand. Further product development and capacity building is needed to create more quality cultural experiences so there is substance behind the proposed brand. 5. BUSINESS OPPORTUNITIES The following sections provide an overview of the type of business opportunities the Navigation Traditions Project is likely to create and the existing tourism infrastructure and marketing channels it could connect into Cultural and Heritage Tourism Products The combination of Gisborne inner harbour and related site developments is very likely to stimulate longer stays in the region, increased expenditure and expansion of existing businesses. Development of new small businesses is also likely. Despite having a distinctive cultural heritage, there is a noticeable lack of opportunities for FIT and commercial group visitors to experience something of that heritage. There is reasonable demand, mainly from international markets, for half and full day tours of local cultural attractions, mainly between October and March. One small business, Tipuna Tours, has demonstrated this demand for cultural tours including visits to the key sites and related marae. The business is looking to expand. At a runanga and iwi level there is also interest in telling their stories via tours, events and marae visits. There appears scope for other small tour companies. 9 Nick Tupara presented an initial concept sketch for an interpretive marker at the Working Group meeting on 3 rd February

23 There is generally a lack of authentic marae-based activities in New Zealand and particularly in Tairawhiti, despite strong interest from UK, European, US and some Australian markets. One lesson for Tairawhiti is to provide guaranteed departures so that visitors and the industry have confidence that Tairawhiti is open for business. Part-time and only on demand tours are unlikely to succeed. Further to this, Te Unga Mai, an organisation established to raise awareness primarily of school children aged 8 12 of the region s unique heritage, is also in a position to offer commercial tours and educational packages based on navigational traditions. Their popular annual event celebrating the landing of Captain Cook could be expanded to include a wider audience with greater national coverage Food and Beverage, Retail, Accommodation The most obvious beneficiaries of the project are the cafes and restaurants located in the Gisborne inner harbour. Feedback from some of the business owners suggests that they need greater patronage to grow their business. Increasing prices for food and beverage is not favoured given prices are already towards the upper levels of what the market will tolerate. Inner harbour developments outlined in this report would, more than likely, lead to more people spending more time in the inner harbour area and this should translate to more patronage. It is possible that some visitors who were travelling to Gisborne anyway, will decide to spend more and possibly stay another night, although this would be a very small percentage (2%) of existing overnight visitors Links to Touring Routes The Great New Zealand Touring Route (GNZTR) is a marketing alliance between seven districts, incorporating the Thermal Explorer and Pacific Coast Highways. Gisborne and Tairawhiti form part of the Pacific Coast highway, promoted internationally as part of the GNZTR. Navigational themes align very strongly with the Pacific Coast Highway brand, although there is a lack of story telling and visitor amenities at the key sites that make up the Pacific Coast Highway. The project thus provides an improved touring product enabling car hire firms and inbound tour operators to strengthen their marketing efforts around a better touring experience Meetings and Conferences Although the meetings and conference market for Gisborne is relatively small, the project offers opportunities to add value to this market through delegate partner activities, site visits, cultural performance and one-off activities (such as wakaama, evening cruises or marae visits) centred on the navigational stories and traditions. 14

24 5.5. Events Events can act as a key economic driver and catalyst for business development. The success of Gisborne s Rhythm and Vines Festival that has grown into an internationally recognised event has proven that Eastland can attract significant numbers of visitors to events. The challenge will be attracting visitors outside of January and February and further maximising returns from the summer tourists. The ability to create new events and festivals around the navigational theme and expand existing ones like Te Unga Mai will be greatly enhanced by the proposed infrastructure development at the key sites. There is a strong case that celebrating the meeting of cultures could be developed into a significant occasion at least equal to Waitangi Day given the national importance of the events that took place. 6. THE BUSINESS CASE AND ECONOMIC IMPACT The navigational traditions project is not only about enhancing and growing Eastland s tourism industry, but also maintaining its share in an increasingly competitive marketplace. Other destinations and regions are investing in infrastructure to stimulate economic growth and encourage tourism business development. Eastland requires this investment too. The section presents the business case for the navigational traditions infrastructure development projects and also a high level view of the potential economic impacts The Business Case The business case analysis treats the light infrastructure development as a business proposal. Assessing the costs and benefits from a wider societal viewpoint over the life of the project can assist Eastland decision makers to answer the question: do the benefits to the region over the life of this investment make the initial investment worthwhile? The following cashflow analysis illustrates how Eastland can clip the ticket and derive wider benefits from the investment of public dollars in light infrastructure at key sites. The assessment assumes a 20-year time frame. The project would provide the basic infrastructure and amenities on which the community and businesses can leverage further growth in economic activity. The following key assumptions have been used to calculate the net present value of the project over a specified time period: 15

25 a capital expenditure estimate of $6 million (see capital expenditure assumptions in Appendix 2) the infrastructure is completed over 5 years the full realisation of benefits occur by year 7 the project is measured over a 20 year time frame As a result the net present value of the project would be around $4.5 million, and this yields a positive benefit cost ratio (BCR) of for the project (see Table 1). Table 1: Business Case Assessment using Discounted Cashflow Analysis Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Costs Capex spend profile 100% 0% 10% 30% 40% 20% Capital expenditure $6,000,000 $0 $600,000 $1,800,000 $2,400,000 $1,200,000 $0 $0 Operating expenditure (% of capital) 5% $0 $0 $120,000 $240,000 $300,000 $300,000 $300,000 Total costs $0 $600,000 $1,920,000 $2,640,000 $1,500,000 $300,000 $300,000 Benefits Ramp up of benefits to maturity level in Y7 0% 5% 10% 30% 50% 75% 100% Value-add to region (no multiplier) $0 $88,574 $177,148 $531,445 $885,742 $1,328,614 $1,771,485 Cash flow $0 ($511,426) ($1,742,852) ($2,108,555) ($614,258) $1,028,614 $1,471,485 Business case metrics Discount rate 8% a) Net Present Value $4,503,058 b) Benefit cost ratio NPV of Benefits $11,250,604 NPV of costs $6,747,546 Benefit cost ratio 1.7 The benefit calculations are conservative with relatively low capture rates for extra nights and new visitors to the region as a result of the infrastructure developments. While the capital costs could also be considered conservative. This analysis is similar to that used by the New Zealand Transport Agency (NZTA) for transportation projects. It takes a wider societal view of costs and benefits across both the public and private sectors. In the current analysis the public sector is assumed to (mainly) make the initial investment in the light infrastructure. The benefits are expected to be principally received through increased wages, salaries and business profits. The benefits are estimated in terms of the direct value added in the region, assumed at an average of 40% of the initial visitor spend. This assumption accounts for a proportion of visitor spend that leaks out of the region in terms of the costs of goods. 10 In this form of analysis a project is worthwhile pursuing if it has a Net Present Value (NPV) of greater than $0 or a benefits to costs ratio greater than 1.0. The concept of NPV answers the question of what is a dollar s cost or benefit in the future worth in today s dollar terms. 16

26 6.2. Sensitivity and Risk Analysis This analysis examines scenarios where the capital expenditure and benefits are less or more than anticipated. In terms of the capital expenditure the single largest unknown is the potential construction costs for the river boardwalk. The following tables illustrate the effect on the BCR of increasing or decreasing the benefits by 25% and changes in the overall capital expenditure of the project. Table 2: Sensitivity Analysis Pessimistic scenarios. Expected scenario / base case Optimistc scenarios Assumptions BCR Assumptions BCR Assumptions BCR Decrease benefits 25%. All other assumptions base case. 1.2 Base case benefits (tourist spend increases) 1.7 $8.0M capex. All other assumptions base case. 1.2 $6.0 m capex 1.7 Increase benefits 25%. All other assumptions base case. 2.0 $5.0m capex. All other assumptions base case. 2.0 If the benefits decrease by 25% or the capital expenditure increases to $8 million for the development the project edges closer to that breakeven BCR point of 1.2. One of the greatest risks for the project as a whole is that certain components outlined in the concept are not completed. This would adversely affect the social and economic impact of the project. As it stands the impact is derived from the sum of all the parts to the project and needs a critical mass of sites and infrastructure to appeal to people to stay longer and spend more. This is equally true for the uptake by and support from local residents Economic Impact The economic analysis is based on Eastland s existing tourism market of 850,000 visits in 2008 (Appendix 3) and the assumption that the majority of impact will stem from existing visitor markets through greater spend and a percentage of additional nights in the region. These are the visitors coming to Tairawhiti anyway. Only a very small percentage of new visitors would be attracted, at least in the first 5 years or so. Assuming the project is successful and is implemented as designed, it is not unreasonable to expect a greater share of new visitors will be captured through greater national and international coverage and appreciation of the significance of the events that took place in Tairawhiti. The capture rates prepared for each market segment estimate the number of existing visits that could be influenced by the new light infrastructure developments and a very small percentage of new visitors (e.g. 1% or less). This equates to a direct output of $4.4 million in year 7. The overall economic impact anticipated for the navigational project would be $2.7 million in year 7 of the project. This assumes direct value added at 17

27 40% of direct output and a type II multiplier of 1.5 (see calculations in Appendix 3). This would equate to approximately 44 full time equivalent positions for the region. Table 3: Economic Impact Assessment Components Year 7 Results Direct Output $4,428,712 Assumed direct value add as % of direct output (%) Value added at business maturity in year 7 Assumed type II multiplier of direct value added 40% $1,771, Total economic impact year 7 $2,627,227 This measure of the economic impact is a snap shot of year seven. It is difficult using this analysis alone to understand whether the project is worthwhile when significant investment is made in the prior years and the benefits will extend for many years after. For this reason, the business case assessment is likely to be a better tool for decision makers Social and Community Benefits The above analysis presents a business case and economic rationale for pursing the development of light infrastructure for the navigational traditions project. However, a strong case can also be made for doing this development for social benefits and the people of Tairawhiti regardless of its economic outcomes. This development is in many ways a community asset and should enhance the region as a place to live and work. 7. COORDINATING THE PROJECT A critical factor in the success of the Navigational Traditions Project will be the ongoing coordination of the project from within an entity that has the mandate, capacity and resources to undertake a management role. There are potentially three entities under which the project and a project manager (see Section 7.1) could sit: Tairawhiti Development Partnership Management Trust (TDPMT) Eastland Community Trust (ECT) Gisborne District Council (GDC) 18

28 Table 4: Comparison of Potential Lead Entities Lead entity Pro s Con s Tairawhiti Development Partnership Management Trust Eastland Community Trust Gisborne District Council Has mandate to undertake the work and is a priority project Framework in place Has a regional mandate Has the ability following the development of new policy to manage and contract work Strong connections to Port of Gisborne where much of the work will occur One step removed from political process Established systems in place for contracting and managing project Legal mandate to enable community development Uncertainty around TDP s future No existing capacity or resource within TDPMT No track record for managing projects Office and project management systems not yet set up, although heading in that direction Potential for project to get sidelined amongst other priorities Political boundary limited to Gisborne District Limited existing resources for this role Based on the consultation to date and the feedback from the Navigational Traditions Working Group meeting on the 3 rd February 2010, the preferred option is for the project and project manager to be positioned within the Gisborne District Council. Following agreement in principal from TDP for this approach the next step would be to obtain GDC approval to recruit, on a contract basis, a new project manager for the Navigational Traditions Project that would be jointly funded by TDP partners (20%) and NZTE (80%) and be located within GDC Navigational Traditions Working Group The Navigational Traditions Working Group would continue to play a key role in the process as the project moves forward. The Group would continue to include representatives from the key agencies who have senior positions and are able to make decisions and drive results. The individuals in the group would continue to use their expertise and influence to assist the development process and the project manager. The appointed project manager for the Navigational Traditions Project would update the Working Group on a monthly basis. 19

29 7.2. Project Manager The Navigational Traditions Project requires a project manager who is able to dedicate their time to coordinating all the elements of this project, especially over the next few years to ensure the site selection, design guidelines and development of the individual sites is undertaken in a coordinated and timely manner Role The project manager would be responsible for driving the overall coordination of the project and regularly update the Navigational Traditions Working Group on progress. On a day-to-day basis they would report to the Community Planning and Development Manager of GDC. Their role would include the following tasks: Project Management Reporting Manage day-to-day operational aspects of a project and scope Create and execute project work plans and revises as appropriate to meet changing needs and requirements Identify resources needed and assigns individual responsibilities to partners where appropriate Prepare and manage the request for proposals process for selecting the site planning and design team. Coordinate with key partners on the selection and subsequent development of their sites Develop protocol with GDC Maori Liaison for engaging with the individuals/groups who have manu whenua to ensure the stories they wish to share are shared with integrity Manage the site planning and design team workplan Enforce project standards Minimize exposure and risk on project Ensure project documents are complete, current, and stored appropriately Reports directly to the GDC Community Planning and Development Manager on a day-to-day basis and takes process and strategic direction from the Navigational Traditions Working Group Manages project budgets Identifies funding sources and business development opportunities as they relate to the project Plan and schedule timelines and milestones using appropriate tools. 20

30 Track milestones and deliverables. Develop and deliver progress reports, proposals, requirements documentation, and presentations. Communications Maintain relationships with the key partner organisations at the operational and strategic levels Build, develop, and grow any relationships vital to the success of the project. Regularly communicate the status of the project to partners and periodically to the community Concept design, site planning, and costing work The next phase of work to follow on from the pre-feasibility study will lay the foundation for the construction phase. The concept planning and design work will ensure that the sites are developed in a consistent manner that enables unique stories to be told under a broad navigational theme. The success of the project rests on getting the planning and design phase completed to a high standard to ensure the quality and consistency of experience. The project will require a multi-disciplined team including: a landscape architect, architect, interpretive specialist, engineer, heritage, tourism and Maori advisors to complete this work. The team should be retained for both the concept design and planning and the subsequent detailed costing and design to ensure consistency. The stories are a key component of the project. The use of an interpretive specialist working closely with manu whenua and other stakeholder groups to clarify appropriate stories to be shared and help put these into physical form on a story panel is key. The interpretive work undertaken in the Waioeka Gorge is an example of the process and quality of interpretation needed for this project Funding Determining the funding sources for various aspects of the proposed infrastructure development is critical. Funding will be needed to not only cover the cost of developing the six sites, but also fund the initial concept and site planning work and overall coordination of the project at a regional level. The funding sources include but are not limited to: New Zealand Trade & Enterprise (NZTE) potential 80/20 funding for the project manager role and initial design and site planning work contingent on 20% from regional commercial stakeholders. 21

31 Gisborne District Council (GDC) the council could look to fund aspects of the development on council lands around the inner harbour. GDC would also have a role in other sites within the region in their jurisdiction. Wairoa District Council (WDC) in a similar capacity to GDC the WDC would potentially look after funding relating to site development on their council lands including Pilot Hill. Eastland Community Trust the ECT owns the port and much of the land in the inner harbour precinct. It also has funding available for community based transformational projects that can benefit the Tairawhiti region. Eastland Group funding from the Group could be encompassed within the ECT funding above. However, scheduled maintenance work on the retaining wall and slipway between the port and Turanganui River if tied into the development of the boardwalk could lead to cost savings and the use of engineers for design. The Eastland Group may also play a role in the enhancement of the Cook Landing Site. Department of Conservation (DOC) funding for development of the Cook Landing Site, linkages to Titirangi Reserve and potentially other regional sites on the DOC managed estate (e.g. Anaura Bay). New Zealand Transport Agency (NZTA) NZTA could be a potential funding source for the Cook Landing Site Airbridge because of the road safety concerns and possibility through their pilot Gisborne Integrated Planning Project. 22

32 8. ACTION PLAN 8.1. High Level Project Workplan ( ) The following workplan provides an overview of the key tasks to develop the infrastructure for the navigational traditions project. 23

33 8.2. Action Plan # Recommended Actions Tasks Roles Timing Potential Funding Source(s) 1 Tairawhiti Navigational Traditions Project (NTP) Prefeasibility Study, Finalise navigational traditions project coordination 3 Prepare NTP project for year 3 regional application for NZTE 4 Finalise 6 regional sites to be developed 5 Use report as a vehicle to advance Cone of Vision discussions TDP approve Final Report in principal GDC to approve project manager role within council Application to NZTE for project manager funding support (see below) GDC to prepare NTP project application to NZTE for project management, concept design and planning work Confirm funding of 20% from regional commercial partners for NTP Coordinate finalising the regional sites for initial funding Coordinate meeting with Historic Place Trust, Eastland Group and GDC 6 Refine funding partners Meet to determine roles and funding for Inner Harbour infrastructure projects TDP February 2010 NA GDC February 2010 NA GDC, NZTE Navigational Traditions Working Group GDC, HPT, Eastland Group GDC, Eastland Group and ECT By start of March 2010 March 2010 March 2010 March 2010 NA NA NA NA 24

34 # Recommended Actions Tasks Roles Timing Potential Funding Source(s) 7 Review project title Finalise navigational versus voyaging as a title and scope for sites and interpretation 8 Councils prioritise NTP work streams into 2010 Annual Plan 9 Recruit project manager for Navigational Traditions 10 Commission concept and planning work 11 Develop protocol for engaging with iwi and stakeholders GDC to incorporate relevant NTP work stream into annual plan WDC to incorporate relevant NTP work stream into annual plan Navigational Traditions Working Group GDC WDC March 2010 March 2010 Advertise for and recruit a manager GDC April 2010 NZTE Prepare an RFP for the Concept and Site Planning including engineering of structures Prepare RFP for the detailed site design and costings Select contractors Project manager to oversee this work Develop protocol with GDC Maori Liaison for engaging with the groups who have manu whenua to ensure the stories they wish to share are done with integrity Develop IP protocols 12 Engaging with Iwi "kanohi ki kanohi" discussions with Iwi, Hapu and whanau at a very practical level about the project Project Manager, Eastland Group GDC (project manager, Maori liaison) GDC (project manager, Maori liaison) June 2010 June 2010 July 2010 NA NA NZTE, GDC, WDC NA GDC 25

35 # Recommended Actions Tasks Roles Timing Potential Funding Source(s) 13 Contractor to complete Concept and Site Planning 14 Contractor to complete detailed site design and costings Complete site plans for all regional sites and Gisborne harbour Develop design guidelines and standards for all sites Prepare interpretation plan for region Engineering reports for structures - boardwalk and bridges Work with community and iwi to develop site stories 15 Resource consents Obtain any consents required at key sites 16 Turanganui River Trails Quick wins project Titirangi Reserve enhancements Complete river trail sections including Peel Street bridge to Tairawhiti Museum Gisborne Inner Harbour Master Plan. Walkway alignment on Esplanade (Wharf Café and Sport Fisherman s Club) and Rail bridge upgrades 17 Trail to Kaiti Beach Build new trail from Kaiti Beach along foot of Kaiti Hill to Williams Cottage site 18 Upgrade and realign Kaiti Hill Summit trail Realign and form a new trail from Williams s cottage to Cooks Plaza Project Manager, contractors Project Manager, contractors GDC, WDC, DOC August 2010 November 2010 NZTE, GDC, ECT NZTE, GDC, ECT GDC GDC GDC GDC 2010 GDC GDC 2012 GDC 26

36 # Recommended Actions Tasks Roles Timing Potential Funding Source(s) maintaining a gradient of 5-7%. 19 Upgrade Cooks Plaza Upgrade the Cooks Plaza monument GDC, ECT 2013 GDC 20 Begin development and Pilot Hill WDC 2011 enhancements at regional sites WDC 21 Mount Hikurangi GDC, Ngati Porou GDC, ECT 22 Whangara GDC, iwi GDC, ECT 23 Tolaga Bay GDC, iwi, Tipuna GDC, ECT Tours 24 Anaura Bay DOC, GDC, iwi DOC, ECT 25 Mahia Pennisula WDC, iwi, 2012 WDC, ECT community 26 River Boardwalk Work with Eastland Port to coordinate with their maintenance schedule 27 Bridge over Turanganui River from Slipway Engineer report to be included in concept design brief Work with Port to link into maintenance schedule and boardwalk Engineer report to be included in concept design brief 28 Cook Landing Site enhancement Commission landscape design and interpretive plan for the site Eastland Group. ECT, GDC Eastland Group. ECT, GDC DOC, Eastland Group, HPT ECT, Port 2012 ECT DOC 29 Airbridge to Cook Landing site Work with key partners to construct DOC, NZTA, ECT, NZTA, DOC 27

37 # Recommended Actions Tasks Roles Timing Potential Funding Source(s) bridge Engineer report to be included in concept design brief 30 Information/bookings/retail kiosk Determine an appropriate site or existing building for the kiosk RFP for potential joint venture interest to operate visitor services along with retail and bookings 31 Capacity building program Create a program to assist businesses and individuals in developing experiences around the site Contract advisors with tourism business startup experience 32 Develop interactive website Develop a website that highlights the key sites with an interactive map 33 Create navigational traditions collateral 34 Develop marketing campaign and collateral Create stories and links to key sites Produce a navigational traditions brochure with map for the key sites Develop marketing campaign around Tairawhiti heritage and culture Create cultural packages (e.g. accommodation and a cultural activity) Eastland Group, GDC GDC, Tourism Eastland, operator TPK, GDC, NZTE, Tairawhiti Polytechnic Tourism Eastland Tourism Eastland Tourism Eastland, operators 2014 GDC, ECT, private business NZTE, TPK 2013 Tourism Eastland, ECT 2013 Tourism Eastland, ECT, private businesses 2013 Tourism Eastland, ECT, private businesses 28

38 APPENDIX A1. Consultation List Name Andrew Gaddum Andy Bassett Annie McGuire Apirana Mahuika Awhita White Barney Tupara and other representatives Brian Wilson Chris Lankshear Clare Radomske Dale West Dame Anne Salmond Dame Sheryl Sotheran David Hatfield David Lee (Jackie Blake) Denise Elers Dr Monty Soutar Duncan Rothwell Frank Murphy Gary Alexander George Kenton Graeme Butts Graham Breckell James Baty James Blackburn Jason Morgan Joan Gerritise John Clarke Katie Thomas Liz McMaster Mark Davies Matt Todd Meng Foon Mere Pohatu Michael Muir Michael Spedding Company Eastland Port, GM Logistics DOC Area Manager Tipuna Tours Chairman Te Runanga o Ngati Porou DOC Ngati Oneone Councillor, Gisborne District Council Go Gisborne, Tourism Eastland Board Chamber of Commerce Gisborne District Council Historian NZTE Gisborne District Council NZTA Gisborne Integrated Planning Project NZTA Napier/Gisborne CEO Te Runanga o Ngati Porou Gisborne District Council Motu Lodge/Cruise Ships Chair Eastland Community Trust Emerald Hotel Director Tairawhiti Museum Tourism Eastland Wairoa District Council Historic Places Trust New Zealand Transport Agency Portside Hotel, GM Director Eastland Community Trust/President Gisborne grape growers society/ex Mayor Casablanca Motel NZTE DOC Eastland Infrastructure Ltd/Eastland Port Mayor of Gisborne Te Puni Kokiri Business Representative/Owner Gisborne Herald Te Umga Mai/Historic Places Trust 29

39 Nadine Thatcher Nick Tupara Paku Kingi Pam Bain Peter Freeman Phil Wauchop Rangi Manuel Ronald Nepe Sherry Reynolds Steve Nayda Yvette Kinsella Gisborne District Council Maori Liaison Officer - Gisborne District Council Waka Toa DOC Archaeologist CEO Wairoa District Council Gisborne District Council Kahungunui ke Te Wairoa CEO Te Runanga o Turanganui-a-kiwa Historic Places Trust BDO Spicers Gisborne District Council 30

40 A2. Estimated Project Capital Costs Navigational Traditions Project Rough Order of Costs - Initial Guestimates Only Amount Project Coordination and Planning $ 700,000 1 Project Manager (5yrs at $80k) $ 400,000 2 Concept Plan $ 100,000 3 Detailed design & Costings Plan $ 200,000 Gisborne Sites $ 3,110,000 4 Boardwalk $ 1,500,000 5 Bridge $ 500,000 6 Cook Landing Site $ 250,000 7 Airbridge $ 170,000 8 Kaiti Beach Trail $ 60,000 9 Realign summit trail $ 100, Upgrade Cooks Plaza $ 200, Inner Harbour Sculptures $ 250, River trails $ 80,000 Other Regional Sites $ 1,000,000 Marketing & Capacity Building $ 190, Interactive website development $ 50, Brochure $ 40, Capacity building program $ 100,000 Grand Total $ 4,300,000 NOTES: Why we have used a figure of $6 million in the analysis. 1) The higher figure will help manage expectations and avoid conflict when actual costs are higher than expected 2) If it can be completed for $4.3 million the cost benefit ratio will be considerably more favourable (e.g. greater than 2.0) 3) Cost estimates for the Boardwalk are a best guess it is difficult to know what this component might cost including the design and engineering work. 4) The overall cost estimate for the regional sites are considered reasonable given that many of the sites have current infrastructure in place and further discussions are needed with local partners. However, cost for new walking tracks, car parking and toilets (can range from $20,000 to $200,000) can significant increase the per site cost of development 5) Inevitability there will be cost increases and price fluctuations for materials 31

41 A3. Business Case, Economic Impact and Visitor Market Assumptions Key Overall Product Development Assumptions! The six infrastructure projects (e.g Gisborne and five other key sites) could cost something in the order of $5-7 million to complete.! The infrastructure projects at the six key sites would all be completed successfully within 5 years.! The benefits could be largely maximised by year 7 given that the majority of the market is existing visitors.! The stakeholders within the region would work together effectively and agree to share/tell their stories.! The project has a strong lead entity with the resources to coordinate the development of the infrastructure and keep all players informed of progress.! The key sites are linked through a common theme/brand that connects Gisborne and the other sites. The sites are developed in a consistent style.! Tourism Eastland develops a strong cultural/heritage sub-brand to further promote the navigational project.! The Cone of Vision is resolved to enable the enhancement of the Cook Landing site.! Over the first five years visitor growth will be very gradual. However, if the national importance of the Gisborne Inner Harbour sites is recognised over time the region. could begin to attract significant numbers of new visitors. Estimated/Projected Total Yearly Visits to Tourism Eastland region! The estimated number of total visits to Eastland was 850,000 in 2008.! The 2008 actual figures have been used as the base case for the calculations. This figure has not been adjusted in the calculations to reflect the 0.6%pa growth rate forecast for the region to 2015.! The majority (91%) of visits are domestic, of which 443,000 are overnight and 327,000 are day visits.! Visiting Friends and Relatives (VFR) for domestic visitors has been estimated at 35% of overnights.! International visitors account for 9% of total visits, of which 64,000 are overnight and 16,000 are day visits.! Visiting Friends and Relatives (VFR) for international visitors has been estimated at 30% of overnights, the national figure is 36%.! The majority of domestic and international visitors to the region are FIT.! There is a growing backpacker market travelling through the region with Kiwi Experience, Magic Bus and Stray. 32

42 Estimated Capture rates and uptake for the proposed Navigational Traditions infrastructure developments! The majority of the economic and visitor benefits should come from the existing visitor markets. This would likely be in the form of additional spend or an extra night's stay by those already visiting the region.! The developments could attract a small portion of new visitors to the region. Approximately 1,700 new visitors or around another 5 vehicles a day over the Dec-Mar period.! The development of new infrastructure can encourage visitors to spend more time in the region and as a result spend additional dollars or stay another night.! Daily and overnight expenditure figures have been scaled back from the Ministry of Tourism national figures obtained from the International Visitor Survey (IVS) and Domestic Travel Survey (DTS).! TRC have developed % estimates of potential additional spend by various markets. These are based on the likelihood of increased expenditure on food and activities as a result of the increased number and availability of products and services.! Capture rate for visitors' additional spend range from 10% for domestic day visitors to 30% of international overnights. The estimated value of additional expenditure ranges from $10 for VFR to $40 for international overnight visitors.! Capture rates for visitor types spending an extra night in the region ranged from 1% to 5%. The extra night expenditure figures also factor in the potential additional spend for each market segment.! The capture rates for attracting new visitors to the region range from only 0.1% to 1.0%.! Long term there is potential to attract larger numbers of new visitors. If the significance of the Cook Landing site and supporting infrastructure can be positioned in New Zealanders minds as an important part of our nation's history on a similar level to Waitangi. Note: numbers above are for visits NOT visitor nights Source: Ministry of Tourism New Zealand Regional Tourism Forecasts , Eastland RTO) Key Tourism Statistics, December 2009 Tourism Sector Profile - Maori Cultural Tourism, March 2008 International Visitor Survey (IVS) Key Data, September 2009 Domestic Travel Survey (DTS) Key Data, September

43 Economic Impact - assumptions and notes Direct output. Value of tourist purchases or business turnover. Direct value-added as a percentage of direct output. This is the value-added in businesses selling directly to tourists. 'Value-added' includes wages, salaries, self employed income, interest, depreciation, tax and profits and excludes the costs of goods and services sourced for sale. While estimates of the ratio of value-added to total output are available (Statistics New Zealand 2002 New Zealand Inter-Industry Study 1995/96), national averages may have significant variability at the local level. Comparisons from other economic impact studies suggest a range of 34% - 53% shown in Table 1 below. An average of 40% has been employed, similar to Rotorua. Table 1: Comparisons of direct value-added to output ratio and total value add to direct value-added 34

44 Total economic impacts are the sum of: direct impacts above. indirect economic impacts or flow on effects. The spending in businesses selling directly to tourists creates spending in other supporting businesses such as the local garage, electricity company and plumbers. induced impacts. As wages and salaries are spent, there are further increases in business turnover. A type II multiplier calculates the ratio of total impacts or value-added (direct + indirect + induced) to direct impact or direct value-added. For the purposes of this desktop analysis, comparisons of the ratio of total value-added to direct value-added have been identified in Table 1 and an average of 1.5 selected as not unreasonable. Table 1 shows comparisons of the amount of tourist direct spending (output or business turnover) indicated to support a full time equivalent employee after allowing for direct, indirect and induced employment. 35

45 Business Case, Economic Impact and Visitor Market Calculations Market Type Visits (2008) Daily Spend ($) Potential Additional Spend Potential Extra night spend Domestic Day 327,000 $ $ n/a TRC estimate! The six infrastru 287,950 $ $ $ Ministry of Tourism - domestic average spend per day trip $103 (Dec 2009) VFR 155,050 $ $ $ TRC estimate that approximately 35% of domestic overnights are VFR International Day 16,000 $ $ n/a TRC estimate Overnight 44,800 $ $ $ Ministry of Tourism - international average expenditure/person/day $124 (Dec 2009) VFR 19,200 $ $ $ TRC estimate that approximately 30% of international overnights are VFR TOTAL visits 850,000 Source: Ministry of Tourism Regional Forecasts Eastland RTO Note: Visits based on Ministry of Tourism actuals for ) Capture rates for existing and new visitors after infrastructure developments completed Source Existing visitors Market Visitor Type Additional New Visitors Extra Night Spend Domestic Day 10.0% n/a 0.1% Overnight 20.0% 2.0% 0.2% VFR 20.0% 1.0% 0.2% International Day 10.0% n/a 0.1% Overnight 30.0% 5.0% 1.0% VFR 25.0% 2.0% 0.2% 2) Numbers of Existing and New Visitors that would spend more, stay longer and be motivated to visit Existing visitors Market Visitor Type Additional New Visitors Extra Night Spend Domestic Day 32,700 n/a 327 Overnight 57,590 5, VFR 31,010 1, International Day 1,600 n/a 16 Overnight 13,440 2, VFR 4, TOTAL 141,140 9,934 1,715 3) Additional Expenditure of existing and new visitors Market Visitor Type Existing visitors New Visitors Additional Extra Night ($) Total ($) Spend ($) ($) Domestic Day $ 490,500 n/a $ 16,350 $ 506,850 Overnight $ 1,727,700 $ 691,080 $ 69,108 $ 2,487,888 VFR $ 310,100 $ 108,535 $ 21,707 $ 440,342 International Day $ 24,000 n/a $ 800 $ 24,800 Overnight $ 537,600 $ 291,200 $ 58,240 $ 887,040 VFR $ 48,000 $ 30,720 $ 3,072 $ 81,792 TOTAL $ 3,137,900 $ 1,121,535 $ 169,277 $ 4,428,712 36

46 ECONOMIC ANALYSIS - two methodologies a) Economic impact assessment - in year 7 when facilities have assumed to have reached their Direct Output Assumed direct value add as % of direct output (% $ 4,428,712 40% For discussion of economic Value added at business maturity in year 7 $1,771,485 concepts and asumptions - see Assumed type II multiplier of direct value added 1.5 Notes sheet Total economic impact year 7 $ 2,657,227 Possible Employment impacts FTEs / $ direct ouput $ 100,000 Possible employment impacts - year 7 44 Note: The economic impact assessment above does not account for the timing of capital investment costs and the visitor spend benefits The business case analysis below using discounting of costs and benefits from a wider societal viewpoint is a methodology that may better assist decision makers answer the question, "do the benefits to the region over the life of the investment make the initial investment worthwhile"? In this form of analysis a project is worthwhile if the Net Present Value is greater that $0 or the benefit cost ratio is greater than

47 b) Business case assessment using discounted cashflow analysis Visitor expenditure begins in Yr 2 and ramps up as tourism development and marketing efforts take effect and facilities are developed Visitor expenditure will largely be driven by the facilities on the Gisborne waterfront - expenditure increases more rapidly as these facilities are developed 100% visitor expenditure will occur from the second year (Yr 7) of all visitor facilities being completed Value added to region acknowledges that 60% of additional expenditure flows out of the region as for the economic impact assessment above No economic multiplier is applied to the value added to the region. These are the direct benefits. Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Yr 12 Yr 13 Yr 14 Yr 15 Yr 16 Yr 17 Yr 18 Yr 19 Yr 20 Costs Capex spend profile 100% 0% 10% 30% 40% 20% Capital expenditure $6,000,000 $0 $600,000 $1,800,000 $2,400,000 $1,200,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Operating expenditure (% of capital) 5% $0 $0 $120,000 $240,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300, , , , , , , , , , ,000 Total costs $0 $600,000 $1,920,000 $2,640,000 $1,500,000 $300,000 $300,000 $300,000 $300,000 $300, , , , , , , , , , ,000 Benefits Ramp up of benefits to maturity level in Y7 0% 5% 10% 30% 50% 75% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Value-add to region (no multiplier) $0 $88,574 $177,148 $531,445 $885,742 $1,328,614 $1,771,485 $1,771,485 $1,771,485 $1,771,485 $1,771,485 $1,771,485 $1,771,485 $1,771,485 $1,771,485 $1,771,485 $1,771,485 $1,771,485 $1,771,485 $1,771,485 Cash flow $0 ($511,426) ($1,742,852) ($2,108,555) ($614,258) $1,028,614 $1,471,485 $1,471,485 $1,471,485 $1,471,485 $1,471,485 $1,471,485 $1,471,485 $1,471,485 $1,471,485 $1,471,485 $1,471,485 $1,471,485 $1,471,485 $1,471,485 Business case metrics Discount rate 8% a) Net Present Value $4,503,058 b) Benefit cost ratio NPV of Benefits $11,250,604 NPV of costs $6,747,546 Benefit cost ratio

48 A4. Other related Navigational Traditions ideas, initiatives and stories There have been numerous stories, initiatives and ideas associated with the navigational traditions theme that have been discussed over the years. This table attempts to acknowledge many of these and illustrate how they fit into the process of development. As mentioned in the body of the report, the goal has been to simplify the concept and identify a practical and achievable starting point to getting things going. While many of the initiatives listed here have merit and will in time add significantly to the cultural experience in Eastland, there is a need to start somewhere. In the short term the focus will be on the development of light infrastructure at key sites. This development would also include interpretation and the stories directly related to the sites. 39