Wellington City Council has hit pause on its $139 million Golden Mile revitalisation project amid warnings it could balloon to $220m.

The new council met for its first proper meeting today, where it voted on the review, as well as giving itself pay bumps, signing off on committee chair appointments, and hearing maiden speeches of its new members.

Mayor Andrew Little, who campaigned on undertaking a review, said the council is “between a rock and a hard place”.

“We’ve now heard of significantly more cost increases,” Little said, calling for the council to be fiscally responsible in its constrained financial situation.

Little said undertaking a review may lead to alternative options for the area, but said agreeing to the review is not determining an outcome.

Wellington Mayor Andrew Little presiding over Wellington City Council's first meeting of the term. Photo / Mark Mitchell

It will be undertaken independently by a third party at a cost of between $200,000 and $400,000 and take three to six months. That cost would be funded by taking on further debt.

All but four councillors voted in support of the review, with Green councillors Rebecca Matthews, Laurie Foon, Geordie Rogers, and Jonny Osborne against.

Matthews urged the council to fast-forward the project, rather than press pause, while Rogers took aim at Little’s arguments for the review, warning the further delay comes as people flee Wellington for greener pastures.

Wellington City Councillors meet to vote on pausing the Golden Mile during their first meeting proper of the term. Photo / Mark Mitchell

Council officers warned councillors of further blowouts in the project’s budget.

The revitalisation project, which aims to spruce up the capital’s tired nightlife and hospitality strip, was expected to cost $78m when it was conceived in 2020.

In 2023 the cost was said to be $116m, with a built-in rise to $139m to include contingency.

The council is now including an additional $21.9m for work on water infrastructure on the stretch, funded solely by the council, taking the project to just over $160m.

The Herald revealed on Friday a $15-25m blowout had been found in phase two of the works, the Courtenay Place stretch, during recent contract negotiations.

Now, by extrapolating the phase two blowout to the rest of the project, which stretches through to Willis and Manners Sts and Lambton Quay, the full cost of the entire project rises to a forecast $200-$220m, officers said.

It comes after the council in August revealed another $20m cost escalation, which was able to be reduced after the project was scaled back.

Wellington City Council has released its new design for the Golden Mile on Courtenay Place. Image / WCC

The review has been set up to look into the project’s risks and costs to re-evaluate the cost benefit ratio, as well as economic analysis into the short-term and long-term impacts, with the aim of seeing if it remains a viable project and aligned with the council’s goals.

While the project is co-funded at 51% by NZ Transport Agency Waka Kotahi (NZTA), the agency has the power to withdraw its funding if the council seeks to change the design, even if changes are minor.

Council officers said they had three attempts to try to change the scope within current limits but have not been able to work around “significant cost escalation” of $15-25m for the Courtenay Place phase of the works.

To get the full NZTA funding, council officials said, it would have to complete the full project down to Lambton Quay.

Flyover footage was released in February, showing what the final design could bring to Courtenay Place.

It includes excluding private vehicles during daytime, a cycleway running down one side of the street, widened footpaths, new public seating and outdoor dining spaces.

There would be more trees and rain gardens that did not need watering and which were designed to filter rainwater before it entered the harbour.

It was previously part of the now-canned Let’s Get Wellington Moving transport package (LGWM). The Golden Mile component was passed over to the council, with the agreed NZTA funding, after a deal with the National-led Government, which campaigned on scrapping LGWM.

Following the review, council officers will present its findings to the council for next steps.

Ethan Manera is a Wellington-based journalist covering Wellington issues, local politics and business in the capital. He can be emailed at [email protected].