Auckland Mayoral race: John Tamihere's $80m council building up-sell allegation rejected

Wednesday, 25 September 2019

The Auckland Council Civic Administration Building and surrounding area will undergo an up to $300 million redevelopment.

Auckland mayoral challenger John Tamihere claims a property developer who acquired council property for $3 million has tried to sell it on for $80 million.

Tamihere released a leaked email which seeks interest in three sites near Aotea Square just four weeks after a controversial deal including the former Civic Administration Building went unconditional.

'This is an extraordinary turn of events,' said Tamihere who has previously accused the council of selling the CAB and adjoining land at a fraction of their true value.

2019 images of the Auckland Civic Administration Building redevelopment with adjacent new buildings.

However, council property and development agency Panuku said it was aware of moves detailed in the leaked email, and said the developer's actions were in-keeping with the council's agreement to sell to Civic Lane Limited.

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Tamihere's allegations are just the latest twist in the five-year process to sell the building, unwanted by the council, which has heritage protection and is riddled with asbestos.

Auckland Council in 2016 agreed to sell the building to Civic Lane, along with with nearby development sites to offset the expected loss in refurbishing the city's first 'skyscraper', which opened 53 years ago, and converting it into apartments.

Tamihere released the email, dated July 4, which he says is from agents Ray White Commercial, seeking interest and putting an $80 million price tag on sites which formed part of the council 'bundle', once foundations and the podium layers were finished.

One is a 150-room hotel site on Mayoral Drive being offered for a suggested $30-35 million.

A larger site on Greys Avenue, which has consent for 95 apartments and shops, is suggested as being worth $30-40 million, and a smaller low-rise commercial building had a $5.5 million price guide.

'The developer contracted by Panuku - was looking to exit the deal by way of sale,' said Tamihere.

Stuff forwarded the email - which had both the sender and recipient blacked out, to Panuku for comment.

Panuku's response outlined how the eventual re-sale of several development sites was provided for in the sale agreement.

'The development or sale of the other sites, offsets the high costs of refurbishing the CAB,' said Clive Fuhr the project development director.

However, he said the sales could not be finalised until Civic Lane had completed refurbishment of the CAB, estimated to be in two years' time.

'We appreciate that the developer will be seeking to make a profit following what will be an investment - saving ratepayers over $80 million in restoration costs of a scheduled (heritage) building,' said Fuhr in a statement.

'In July, following the settlement earlier this year, the developer of the CAB tested the waters to see what the purchase interest might be.'

'Any future purchaser is obliged to comply with the agreed master plan for the precinct,' said Fuhr.

Stuff sent the leaked email to the person Tamihere claimed was the writer, Finn Hurst, a director of Ray White Commercial.

Hurst said he was bound by confidentiality and could make no comment other than to say 'Ray White have been appointed to sell down the CAB apartments by the developer'.

Civic Lane's John Love did not respond to calls, texts or emails from Stuff.

The agent's email showed 65 per cent of the 118 apartments planned for the CAB building had been sold as of early July.

The $80 million allegation is Tamihere's second attack on the way the council sold its former headquarters.

The Serious Fraud Office in July said it would not investigate a complaint laid by Tamihere over the sale process.

The SFO said it found no reason to suspect fraud, corruption or bribery on the part of Panuku or its agents.

However, it said a luxury trip to the Bay of Islands accepted by Panuku's chief executive Roger MacDonald in 2017, did risk 'creating a perception of impropriety'.

Panuku said MacDonald had not realised until the day of the trip that he would be flown from Auckland in the developer's private helicopter.

Following inquiries by Stuff, Panuku later found and released emails to MacDonald mentioning the helicopter trip in advance of the trip, but said the CEO had no recollection of them.