How the project started

In 2019 we began investigating options for the Te Aroha spas as the existing Te Aroha Mineral Spas hot pools were operating at capacity and had potential to grow. The background work showed that a larger, more modern facility offering a range of experiences would have the ability to draw in more customers. This would have major benefits for the whole district, create jobs and act as a catalyst for other developments and business growth.

Preferred concept design

A Project Governance Group (PGG) was established in 2021 to move this project forward and geotechnical and risk assessment works got underway to assess the physical feasibility of a larger spa facility. During 2022 three concepts for a future facility were developed that incorporated the design principles. The largest and most expensive option was preferred by the PGG when taken to Council in October 2022.  More information on the concept design options is here.

Investment case

Council approved that the preferred $37m concept be taken to the next stage that would see an investment case being developed and potential investors being approached. This capital raising process had the aim of emerging with one or more interested parties who would like to engage further in the spa project.

The investment case went out to the market in 2023 in a very different economic climate compared to when the PGG was established in 2021. Some parties that were initially interested were no longer in the same position and ultimately the appetite for the $37m option was not there. However, through this process two interested parties did emerge that would like to explore different ways to scale up the hot pools operation.

Next steps

We are currently in a challenging economic environment and while the interested parties are not embracing the $37m concept, Council is still committed to the growth and development of Te Aroha. In October 2023, Council agreed to continue engagement with these interested parties and asked the PGG to arrange visits to Te Aroha. These visits will be a chance for the interested parties to start scoping things out and explore their vision for the project and/or the existing facility.

If the parties are still interested after their initial visit they will need to carry out due diligence and explore the possibilities further. This process is expected to take up until the end of June 2024, when Council will re-assess options for the Te Aroha Spa project.