Foodeast

Five years after the project was announced, the Foodeast food innovation hub is still incomplete and without a single confirmed tenant.

The $18 million facility in Hastings was funded through the Ministry for Business, Innovation and Employment ($12 million), the Hastings District Council (HDC) and the Hawke’s Bay Regional Investment Company (HBRIC), along with a $1 million investment from Progressive Meats.

HBRIC is in layman’s terms the Regional Council’s investment arm.

Construction at Foodeast was due to have finished in March, but chief executive Michael Bassett-Foss says furnishing one of the two buildings at the hub and installing wifi might take another four to eight weeks.

In a media release, dated January 31, Foodeast said new businesses would be settling into the premises by June “if not earlier’’. In an interview with BayBuzz on June 13, Bassett-Foss indicated that finding tenants remained tricky.

“We’re talking with quite a few and they’re just working through their own due diligence,’’ Bassett-Foss said. “You’ll know the economy as well as I do; it’s a pretty tough environment out there at the moment so we’re just seeing that businesses are taking a little bit longer to consider their options and they’re being more conservative.

“But we are seeing some churn because there’s tenants out there that are downsizing and they’re looking for other space so the opportunities are real and we’re just working through them.’’

But he was clear that no tenant had signed an agreement, nor was there any deadline to secure one. “No, not at all,’’ said Bassett-Foss.

In its draft statement of intent for 2024/25, under the heading performance measures and targets, Foodeast said it planned to achieve or exceed 65% average occupancy at the hub for the year ending June 30, 2025.

“Tenants is only part of it, right,’’ Foodeast board chair Nicky Solomon said. “Tenants is the tangible bit, but then it’s what do you build and wrap around that. The programmes, the workshops and, for example, we’ve been talking to some people who run an innovation entrepreneurship programme for young people so, this could be the home of that.’’

BayBuzz spent 40 minutes interviewing Solomon and Bassett-Foss, without gleaning exactly what this hub is about, who might tenant it and how it will result in the innovation that’s been promised for food and beverage in Hawke’s Bay.

Words such as “cross-fertilisation’’ and “ecosystems’’ were used liberally about a site that comprises four warehouses on one side — that will need to be fitted out by tenants — and meeting rooms and offices on the other.

In the end, BayBuzz’s attention was directed to the Waikato Innovation Park, which is situated 10 minutes out of Hamilton. “It is slightly more innovation fullstop, as opposed to food and beverage innovation,’’ Bassett-Foss said.

“Being based in heartland Waikato, it’s definitely got a strong agri-flavour to it. But its flavour is made up of heartland Waikato which is different to Hawke’s Bay in its look and its feel. So, it’s got companies supporting dairy farming, but it’s also got medicinal cannabis places and it’s got accountancy firms, law firms, as well as IP protection firms and it’s a different scale to what this will ever be, but it just provides a useful model for what an innovation hub can look like.’’

Foodeast has been promoted as a facility that will add $100 million to the Hawke’s Bay economy in the next 15 years and create 500 fulltime jobs.

BayBuzz contacted one of the ratepayer investors, HDC, for comment on Foodeast was achieving its stated aims.

“Council acknowledges that Foodeast is operating in a difficult economic climate,’’ an HDC spokesperson said. “We are pleased with progress on construction and understand positive discussions are being had with potential tenants. Council continues to closely monitor the progress of Foodeast and is in regular contact with the board chair and chief executive.’’

At the same time as HDC responded to BayBuzz on June 14, Solomon also forwarded details she and Bassett-Foss were unable to provide when interviewed. In Solomon’s follow-up email, she stated that a tenant had indeed been secured, subject to that tenant “obtaining approval from a government agency.’’

Hastings biotech company Mara Bio has been touted as a potential tenant. Mara Bio co-founder and director Steve Boggs said, “We can’t shed any light on that unfortunately’’ and that there were “still some discussions to be had”.

HBRIC board chairman Dan Druzianic said “time will tell’’ if Foodeast is a success, while also being at a loss to describe what the complex hopes to become.

“There’s been frequent questions about what is it? I’ve been to visit – along with the HBRIC board – the Waikato innovation hub. Before you sort of see a successful one it’s quite hard to describe one,’’ Druzianic said.

“If there’s a lesson from the other hubs around the country, it’s that these things do take time. It’s not a quick journey. The Waikato one took a number of years to really get going and hit its straps.

“As a shareholder, HBRIC was presented with an opportunity a few years ago. HDC were promoting it and said, ‘We’ve got a grant organised from the crown which is very significant’.

“So the offer to investors was you guys put $6 million in and the crown will put $12 million in and we’ll build this facility … The crown will write off its grant of $12 million back to the entity over a period of six years.’’

Druzianic said there was some frustration within HBRIC about how long it’s taken to get Foodeast off the ground, not least because ‘’the first set of plans came up over budget, so they had to start again.’’

Overall, though, he’s relatively satisfied with this use of public money. “There’s a challenge ahead to turn this into something successful for the region and I’m hopeful that that’s going to be the case. But it’s going to be challenging in this environment to do it quickly,’’ said Druzianic.

“But the HDC guys, they came up with the case and we bought into it for the sake of the region. We thought there was low financial risk for us, so we got in behind it. Time will tell.’’

Public Interest Journalism funded through NZ On Air

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