With the new Library and Community Hub, museum and civic whare now taking shape, Council today considered an update on how the wider Te Manawataki o Te Papa programme will be funded, as discussions continue ahead of the 2026/27 Annual Plan.
Council confirmed that the priority use of potential asset realisation net proceeds will be to offset new debt and rates-funded interest associated with Te Manawataki o Te Papa. No changes were made to the programme scope or overall budget.
The Council also decided not to implement funding approaches that would rely on redirecting existing funding streams, such as parking revenue or airport surpluses, because these would only shift ratepayer funding sources and would not meet the Council’s transparency expectations.
Tauranga Mayor Mahé Drysdale says the decision was about keeping the funding approach simple, clear, disciplined and easy for the community to understand.
“As the people of Tauranga start to see this project take shape physically, it’s important they can also see how it’s being paid for,” says Mahé.
“Changes in the original funding assumptions for the Te Manawataki o Te Papa project mean that ratepayer-funded debt will exceed the previously-communicated level of $151.5 million, but Council’s previous decision to move away from Infrastructure Funding and Financing (IFF) and back to our traditional funding source will result in significant savings in interest costs. And if other potential construction contingency costs are not required, the net impact on ratepayers may be negligible.
“The decision to fund the $151.5 million on balance sheet, at today’s interest rates, would allow us to fund $77 million more debt than we could have through the IFF arrangement, at no additional cost to ratepayers. Effectively then, the changes made to the overall project funding approach would add around $29 million to our initial debt-funding expectation,” Mahe explains.
“This decision keeps things simple and transparent. If assets are sold, the proceeds will be used to reduce debt and interest costs, rather than adding pressure to rates. It’s a straightforward, responsible approach.”
The Council also noted that the national funding environment has become more constrained, reducing the likelihood of some earlier external funding assumptions being realised. As a result, locally-led philanthropic support will become a more important part of the final funding mix.
The decisions confirmed today will now feed into the development of the draft 2026/27 Annual Plan, which will be consulted on in the new year.
To find out more, visit: Civic Precinct – The Heartbeat of Te Papa