NZ city deals seek the world’s investment in its small, forgotten corners

New Zealand rejected Michelle Excell. Both her parents were Kiwi but because she was born in Australia, a law change when she was aged 18 meant she could no longer be a NZ citizen.
So, she went and made her name as a tech entrepreneur in America. As an immersive technology consultant, she’s worked with brands and ad agencies to help them develop well-known products and campaigns, like Taco Bell’s famous metaverse wedding, and luxury car-maker Acura’s experiment in which celebs drove real cars blind, wearing virtual reality goggles and helmet.
“It was,” she says, “completely bonkers!”
Now, aged 42, New Zealand has welcomed her back. In particular, one small town.
Excell and her husband couldn’t buy a family home in overpriced Oakland, California. “It’s very tough in the Bay Area. The rat race is real, yeah. And I’m not getting any younger.”
So they made the unlikely move to the riverside town of Whanganui and, in November last year, bought a three-bedroom leasehold property for $323,000.
They love the community, its arts, its nightlife. “We heard rumours of a lot of secretive underground gigs. I don’t think I want to give away anything more!”
“It could not have been a warmer welcome into Whanganui. Unbelievable, because people are amazed and so happy that so many people are moving here.
“It feels that it’s the only time in my life I’ve ever moved anywhere where it’s on the up. Every other time I’ve moved, they say ‘oh, you just missed the good music scene San Francisco’. Or ‘oh, you just missed the crazy times in the agency scene in Melbourne, we no longer snort cocaine off the boardroom table’. I kind of missed every era!
“Now, we’ve moved to a place that just 100 percent feels like it’s on the up and up.”
They’re at the vanguard of what mayor Andrew Tripe plans to be a regeneration of the town driven by the first so-called “city deal” with the Government.
Next week, the Prime Minister is expected to announce the city deal framework to the big annual Local Government NZ gathering of mayors, chairs and councillors, in Wellington.
As Newsroom reported last year, the biggest hurdle to city or regional deals is not the money – it’s the lack of trust between central and local government.
At the conference, the keynote speaker on city deals will be development consultancy Arup’s global leader  for cities planning and design, Richard de Cani. A former Transport for London executive, he worked with mayors Ken Livingstone and Boris Johnson on transformative changes like London’s congestion charge.
He’s worked on projects like Auckland Light Rail, and is a firm champion of tools like the proposed time-of-use charging to move commuters from their cars to trains, buses and bikes. Solutions like these can be part of city deals.
He is visiting Sydney, when he speaks to Newsroom. “Politics can be an incredible force for good in making things happen, like in London with the mayors wanting to do bold things around transport,” he says.
“But it can also mean that projects change direction. So I don’t think the demise of Auckland Light Rail was a failure of the project, per se. I think there’s a recognition something needs to be done. I just think it was the wrong solution for the incoming government, and they wanted to rethink.
“I’m a big advocate of the devolution of powers to elected mayors to make those kind of local decisions.”
City deals, also known as regional deals or place-based agreements, are one of the few things that the coalition Government, its Labour opposition, and local councils all agree on.
What are they? According to last year’s Future for Local Government Review (whose recommendations have otherwise been scrapped by minister Simeon Brown), place-based agreements are “bespoke packages of funding and decision-making powers negotiated between central and local government and other local bodies as part of the exercise of kāwanatanga”.
City deals are designed to drive long-term, large-scale wellbeing improvements at place in a way that shines light on local priorities.
If this sounds to you like a nice new brand for the well-trodden practice of central and local government negotiating how to finance their regional priorities, you’re not entirely wrong.
But the key points of difference is that the priorities are set from the ground up. The city or region identifies where and how it can grow, and negotiates with the Government a concrete strategy to do so. That often includes housing, transport, infrastructure and skills.
And the rates revenue model isn’t sufficient for councils to action their plans on their own, they agree a longterm funding and financing model with the government, and private investors.
Typically a city deal, as finessed in Manchester and other UK cities, will have a timeframe of between 10 and 30 years, governed by a board comprising public and private sector leaders, and include clear performance metrics – central government, like the private investors, will expect a direct or indirect return on its investment.
Sometimes there are repayments or dividends built in, but more often, the metrics are around using growth and regeneration to increase the tax base, and reduce the need for bottom-of-the-cliff health and welfare expenditure.
“This isn’t just about government to government. It’s about the role of the private sector in contributing to this pot as well,” de Cani says.
“We expect the private sector to be actively involved in driving a city deal, because that’s ultimately where the investment is coming from.
“And therefore, you should have a governance structure that incorporates them from the outset. There’s a series of conditions around this in the UK that have made it very different to just getting a funding agreement. Ultimately, this is an expectation that you pay it back.”
In the case of Whanganui, Andrew Tripe heard Luxon’s enthusiasm for city deals when National was still in opposition, so he and the council got moving. Like de Cani and Luxon, he see private finance – perhaps through public-private partnership – as playing a big role.
He says he met with Luxon at a good local café, Maria Lane on Victoria Avenue, and told him what Whanganui would like to do. Then the council sat down to draft its city deal proposal, and got talking with neighbouring councils and Horizons regional council.
It’s early days, but there are six pillars to Whanganui’s proposal: super-charging housing, developing a future workforce (perhaps by taking a stake in the region’s struggling Te Pukenga institute); developing a 30 year pipeline of major infrastructure investment starting with replacing the Dublin St bridge; and providing infrastructure to support New Zealand’s energy security.
Critically for Michelle Excell and other entrepreneurs, the last two pillars are connecting Whanganui to the world for both people and freight, and attracting inward investment in start-up and scale-up businesses.
Tripe will be at the Local Government NZ conference in Wellington, listening to Luxon and Brown’s announcement. “Now, it’s just waiting for this new framework to be announced next week, so we’re beholden to that at the moment.”
For Tripe, this is urgent work – and as evidence of that, he points to what’s happened to Maria Lane, the café where he first pitched his deal to Luxon. “Like for many in the hospitality industry, it’s just really tough at the moment to survive. Lots are finding it tough out there.”
Maria Lane Eatery went into liquidation this year, owing at least $90,000 to creditors – and to Tripe, it seems like that should have been avoidable.
“We’ve got 75 percent of our second floors of our main street in Whanganui unoccupied. We could turn them into apartments really easily, through some kind of fast track legislation that would appease any fire and earthquake requirements.
“We could have a whole bunch of 20- to 35-year-old gig economy workers living in those, who would be up and down the stairs into the cafes and restaurants and helping the town to be even more vibrant than it is.”

As for Michelle Excell? She’s now reclaimed her New Zealand citizenship.