Thirteen bids to redevelop and operate the near derelict Chateau Tongariro, on the slopes of Ruapehu, have been winnowed down to one “preferred proposal”.
The mercurial developer Nigel McKenna is tipped to fully restore the hotel to an international five-star luxury lodge, Newsroom has learned. He’s promising a level of “architectural flair and sensitivity” to ensure the building is seen to embrace the mountains, and the surrounding buildings, land and golf course.
But even before the Department of Conservation has confirmed McKenna’s bid, officials have expressed nervousness because of his company’s involvement in another hotel project: a grandiose 25-storey on the banks of the Waikato River in central Hamilton, that’s been stalled for more than two years now.
They’ve warned of “some concern as to when they might be able to deliver the Chateau”, given the Hamilton delays. Hamilton City Council, which is selling McKenna’s Templeton Group the Victoria St land block for the hotel, says it’s yet to receive an application for consent.
McKenna declines to talk about the Chateau bid, while it’s still working its way through the official request-for-proposal process, but he does say he’s expecting to announce progress on the Hamilton high-rise hotel on June 11.
He’s scheduled that day to meet behind closed doors with the council’s growth and economic development committee, to update progress.
McKenna is also a discharged bankrupt. The developer, who worked on projects including Auckland Viaduct’s Lighter Quay, put himself into bankruptcy in 2011 when he was unable to pay up to $150 million in debts, including to Fletcher Construction.
He was one of several New Zealand property developers caught up in the near-collapse of the Bank of Scotland in 2009. When Bank of Scotland International called in loans, after the US government-engineered bailout of its parent bank Halifax, then McKenna was left in the lurch.
Seventeen years on, three of McKenna’s companies are still lingering on in receivership or liquidation, listed as owing $169m in connection with his Melview development at Kawarau Falls in Queenstown.
But he has rebuilt his career since being discharged from bankruptcy in 2014, with the Hamilton and Tongariro projects his grandest yet.
At Ruapehu, the evaluation process for the six-project shortlist has been extended a couple more weeks, but the Department of Conservation, which owns the Chateau, has already designated the Templeton Group bid as the “preferred proposal”.
McKenna wants a 30-year operating concession, with three subsequent 30-year rights of renewal.
Conservation officials are dealing with a lot of moving parts ahead of this year’s ski season: the degrading building, addressing the Hamilton and bankruptcy concerns to ministers’ satisfaction, liaising with severely disaffected iwi who say they were cut out of the process, and cleaning up bungles by the property company contracted to run the process.
That company, CBRE, got rapped over the knuckles for misleadingly advertising the Chateau as “Hotel for Sale” on its website and Trade Me. The building’s title, in the National Park, will remain with the Department of Conservation; it would be operated under a concession.
Then this week, Natasha Sarkar, director in CBRE’s structured transactions team, initially stated there was no “preferred proposal” and that Newsroom was incorrect. In a subsequent call, she changed her story. “I retract everything I’ve said to you,” she said. “I’m saying, the evaluation process is still running and we have not announced a preferred bidder.”
It’s thought the department will lead the process from here. Last month it set up a panel to focus on assessing the commercial viability of the bids, identified Templeton Group as the preferred proposal, and has now invited feedback from some stakeholders.
Newsroom understands the redeveloped and restored Chateau Tongariro would feature a conference and meeting centre, and potentially a health and wellness spa. Its garage could be redeveloped to become a gastro pub and wine bar with an Italian restaurant.
It would also include a cultural centre created in conjunction with iwi, that would tell the story of the local hapū, their association with the land and the true history of the local community and its land. Templeton Group has been engaging with iwi, though officials note it demonstrates a “lack of understanding of cultural values”.
Ruapehu mayor Weston Kirton welcomes, in particular, Templeton Group’s plans to “activate” the wider Whakapapa Village as a year-round tourism destination through infrastructure renewal, upgraded visitor amenities, curated retail, cultural programming and improved public spaces.
In its heyday, he says, the Chateau employed 100 people – and he has high hopes that there’s a new heyday to come.
The district has been hard-hit by job losses, with the liquidation of ski fields operator Ruapehu Alpine Lifts, then the closure of the Winstone pulp and sawmills, then the abandonment of the rundown Chateau Tongariro by its former Malaysian operator.
“It came at the worst time with other closures as well,” the mayor says. “You know, we’ve been hit around the ears a little bit, but you’ve got to fight back and look after what we’ve got, that’s why we promoted the fact that we needed to have this reinstated. And it’s a long way off yet, but baby steps – we’re just going to take one step at a time.”
It had been closed since February 2023, after being deemed “very high risk” in a seismic assessment – and one of the attractions of Templeton Group’s bid is that it had experience working with seismic-risk heritage buildings and has engaged a heritage architect.
“I know McKenna and the Templeton Group, and they’ve been proactive in the last year or two to engage with myself and others, including Iwi. They’ve actually walked the talk,” Kirton says.
McKenna is committed to taking iwi and the community along with him, the mayor adds. “The funding and the design and the project will be under the Templeton Group, but it’s very much a shared responsibility in terms of how he actually operates. He’s got form, he’s got credibility in other parts of the country, and so we are really confident that he will deliver.”
“It obviously needs modernising to the expectation of his customers, and we want to do whatever we can to promote it as best as possible. I think New Zealanders, and our community, will be excited that this is on the radar, and we really appreciate the efforts of central government to actually see the merits of this heritage building being reinstated.”
Kirton notes that Chateau Tongariro is coming up to its centenary. “It needs a birthday.”
It was built in 1929 by Fletcher Construction Company. According to a history of Fletcher’s by historian-cum-minister Paul Goldsmith, the building was completed in record time and opened for guests on 1 August 1929, even though it was still unfurnished.
The official opening ceremony was three months later, even though Fletcher was still owed £28,000 – in a certain irony, given its likely new operator also has a history of unpaid debts to Fletcher.
Department of Conservation communications adviser Intisar Muketar says the agency is still progressing through the Chateau proposals evaluation process, so it is unwilling to front anyone for an interview at this stage.
