The city is preparing to walk away from a $25 million asset on the cusp of a $180m growth vision.
Hamilton City Council is the sole owner of a 17-hectare property at Ruakura that is tenanted to the Waikato Innovation Park. It plans now to walk away from the investment after 15 years and a solid return.
Council executive director of special projects Blair Bowcott said the park is at a point where it needs to grow and it's time to set it free.
Waikato Innovation Park looking at a $180m growth plan.
"We've fulfilled our role of helping to establish the park and getting it to critical mass, but now it's time for us to step out and for someone else to come in," Bowcott said.
The innovation park was established with public money to research and develop technology in the environment, food and beverage, ICT and agritechnology sectors.
Hamilton City Council executive director of special projects Blair Bowcott says it's time to get out of the Waikato Innovation Park.
Hamilton City stumped up with $2m in 2002 and another $2.4m in equity in 2008.
In 2002 the Ministry of Economic Development gave a $2m grant and another $3.95m in 2008. WEL Energy Trust pitched in $2m in 2003 and Industry NZ/MRI granted $4m to help fund the cost of a building in 2008.
Council lacks the free capital to take the park to the next level, Bowcott said.
"We believe the park probably needs a minimum of $10m to $15m of equity injection, now, to grow. Whilst the city could afford that, the city has demands which are of a higher priority."
"We are prepared to work and get the right purchaser, a purchaser who will ultimately deliver the master plan and has the capital to move in and move along fast."
Developed from bare land, the innovation park, independently valued at $25m, boasts the base for Tetra Pak New Zealand, a spray dryer and NZ Food Innovation Ltd and is 98-percent tenanted and has businesses lining up to relocate to Ruakura.
Waikato Innovation Park chief executive Stuart Gordon said that in the early stages of the business, risk was high and private investors stayed away.
Those days are gone, he said.
"We are beyond that," he said. "We've got critical mass. It's successful.
"We've got an opportunity to grow and grow wealth right across New Zealand Inc."
Expansion of the park would see space for 2500 staff. Currently, there are four buildings with 46 tenants. That would grow to 16 buildings within 20 years.
Staff numbers would grow, too, from 562 to 2500, clustering more like-minded people together to "solve the value chain", Gordon said.
"Innovation is solving the value chain. People in the garage might have the idea about the product, but how do you get it to market, how to solve the logistics? That is just as important in the value chain and that's where the cluster effect can happen."