Today's (12 November) Christchurch City Council meeting has voted to fund the development of a new building for the University of Canterbury at the Arts Centre.

Council will borrow up to $24.355 million and advance the funds to the Council-controlled trading organisation, Civic Building Ltd, to manage the development and own the University's National Conservatorium of Music. The full cost of the development will be paid by the University not the ratepayer.

Funding of the building is subject to a number of conditions, including a resource consent being granted. The Christchurch Arts Centre Trust Board also needs to issue a separate certificate of title for the land on which the new facility will be built and Council needs to be satisfied the cost of borrowing the funds required to complete the project will be rates neutral over the complete term of the proposed lease.

Council's decision follows a Special Consultative Procedure.

Christchurch Mayor Bob Parker said the project, while not core Council business, was well aligned with Council strategy.

"The School of Music will further enhance the character and visibility of the Cultural Precinct area and contribute to the revitalisation of the central city. It also aligns with several community outcomes as outlined in the LTCCP."

He said the proposal also benefited the Arts Centre by providing it with additional revenue from the lease to be used for maintenance and protection of the heritage buildings at the Arts Centre.

Mr Parker said importantly, the long-term lease payments by the University would make the proposal rates neutral.

The lease payments will: Recover the whole construction cost of the building over 50 years. Meet all maintenance and refurbishment costs. Pay the interest on the required loan. Repay the debt. Maintain solvency. Ensure the structure is cashflow and rates neutral to Council. "If at the end of its 50-year lease the University wished to terminate its lease, the Council would own the building and be able to lease it to another occupier."

Mr Parker said it was a remarkable historic moment for the city. "What could be more appropriate than a building which celebrates the young people to this city? Young people are essential to everything we want achieve for this city and this building helps give our community and our city a future."

He said issues associated with the scale and size of the building, as well as the appropriateness of the use of the site in context with the historic Arts Centre buildings, would be debated through the resource consent process. Submissions on the resource consent have closed and hearings will be held in early December.