Polytech seeks rationalisation funding

Otago Polytechnic needs to find up to $15 million to wrestle its property portfolio into shape, as a blow-out in one of its leases puts on the pressure.

Chief executive Phil Ker said yesterday the polytechnic had worked out it would cost between $12 million and $15 million to rationalise its properties.

While the amount the Government would be asked to fund was not finalised, it could be a substantial part, Mr Ker said when approached.

In the end, we are going to make a case that if you were in Cabinet, you would want to support, Mr Ker said.

The case would be ready by about June, he said.

An unexpected $500,000 blow-out in a land lease has provided extra impetus for the polytechnic to centralise its operations at its Forth St campus, but such plans have been made previously.

In 2001, then chief executive Wanda Korndoffer tried to make a start, but came unstuck as the budget blew out.

Mr Ker said achieving that now would make the institution extraordinarily efficient from a property point of view.

In looking to the Government for help, the polytechnic was not doing an Oliver Twist, and accepted its job was to manage the institution, but some factors were conspiring against it.

The polytechnic has been buffeted by Government funding decisions in the past two years, as well as hit by falling enrolments due to a strong job market. Those problems, on top of the prospect of higher lease costs, meant the polytechnic was battling an operating deficit this year.

In the end, the Government owns us. It is a Crownowned operation, so it is incumbent on us to put together the sort of case that says, ‘if you are a prudent owner, this is what you would invest in your asset’, Mr Ker said.

The property causing the polytechnic difficulties is L Block, which sits between Anzac Ave and Parry St, and is the base for architecture, building, horticulture and engineering courses.

Deputy chief executive Dr Robin Day confirmed the polytechnic faced a potential $500,000 lease hike at L Block, where the lease has come up for renewal for the first time in 20 years.

Dr Day said the lease was under negotiation, so he did not want to comment further.

However, he said the polytechnic had enough room at its Forth St campus to accommodate all its Dunedin operations, including those in L Block and its Tennyson St catering programmes.

It is not just an issue of our leases, it is also an issue of our other properties, he said.

Other factors include pressure on space from the polytechnic’s fast growing design school, which is using office space in Great King St on a short-term lease, and a shortage of quality studio space for students at the School of Art.


This article was taken from the Monday 10th April 2006 edition of the Otago Daily Times with the express permission of the writer, Tom McKinlay.