Auckland Council's former HQ sold for $3m, sparking SFO complaint
Friday, 7 June 2019
The long-running sale of Auckland Council's former headquarters is complete with a developer settling the $3 million deal.
The 53-year-old 16-storey building on Aotea Square was the city's first 'skyscraper' and was provisionally sold to developer Tawera Group in 2016.
The sale has sparked a complaint to the Serious Fraud Office by mayoral challenger John Tamihere, who said the developer got a 'sweet honey pot deal.'
'This deal stinks and is either incompetence by officials, or worse corruption within the council,' he said in a statement.
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Tamihere in 2016 represented the Independent Maori Statutory Board on the council's Finance and Performance Committee which approved the sale.
Major refurbishment of the vacant, asbestos-riddled building is expected to begin in a month, and is due to reopen as an apartment block in 2021.
The Civic Administration Building (CAB) was deemed too small, costly and surplus to requirements after local body amalgamation in 2010.
'The settlement means that an A category heritage building can be restored and refurbished without burdening ratepayers with more than $80 million in restoration costs,' said Mayor Phil Goff in a statement.
'We wouldn't want to underestimate the complexity and challenge of getting this to where we've got it,' said Clive Fuhr, the development director at the council agency Panuku which has handled the sale.
The sale has been controversial with a councillor briefing on the state of the sale lasting five hours behind closed doors last Thursday.
Councillor Mike Lee had wanted the sale process halted, pending assurances about the price and heritage protection, but his move was defeated 13-4.
The sale price had never been disclosed but reflects the high cost of removing asbestos, strengthening floors, and with facades that must be replaced while retaining its current look.
'In the property industry it's recognised as a challenging project,' Fuhr told Stuff.
'This building will have it's challenges to develop,' said John Love of Civic Lane Limited.
'Not every developer would have taken it on, but the location and complete refurbishment will make it truly desirable.'
A slowdown in Auckland's apartment market soon after sales at the CAB began, contributed to the drawn-out sale process.
The CAB was Auckland's first skyscraper, opening in 1966 as the headquarters of the Auckland City Council, and now has Category A heritage protection.
When the council outgrew it, its future was clouded by the need to remove asbestos from its interior, and replace its facades in the original style.
Estimates in 2014 suggested refurbishing could cost $80 million, and demolition $24 million, for a building council officials said was surplus to requirements.
The 2016 sale to Tawera, prior to Phil Goff's election as mayor was for an undisclosed but nominal sum, and at the time the developer expected conversion to apartments, and construction of a new adjacent building could cost $300 million.
Tamihere said the price of $3 million, didn't reflect the rising value of such a strategically-located building.
Tamihere wanted the deal to go back to the market to see what other offers might be made, but the council said the agreement could not be broken.
The developer, now trading as Civic Lane Limited, will first build 110 apartments in the CAB, and then construct three adjacent buildings.
These include a 140-room hotel facing Mayoral Drive, an apartment complex with 90 dwellings, and a community and cultural building facing Aotea Square.
Major work is expected to start in about a month.