Council offers rich-lister’s company support to secure tenants

Saturday, 16 September 2023

The Lambton Quay building once home to Kirkcaldie and Stains and David Jones is owned by Robert Jones Holdings Ltd.

Wellington City Council has failed in its attempts to woo tenants to take space in the iconic David Jones building, owned by property tycoon Sir Bob Jones’ company.

The council was proposing a swanky dining destination on Lambton Quay, along the lines of Auckland’s Commercial Bay or Ponsonby Central, and offered to pay for a consultant to develop the idea.

The prime Golden Mile spot is owned by Robert Jones Holdings Ltd. Luxury international retailers Tommy Hilfiger and Calvin Klein, which both have stores at Outlet City in Tawa, are due to move into the ground floor before the end of the year.

It was expected the second floor would be shared by several smaller retailers and the top level would become offices.

However, emails released under the Local Government Official Information and Meetings Act (LGOIMA) show council economic wellbeing manager Anna Calver was keen to get a “Commercial Bay-type dining destination” into the vacant space.

Harbour Eat in Auckland's downtown Commercial Bay is one of the city's newest and most popular spots.

“[It] would be incredible and a real draw card for the building and the CBD … Perhaps there is a way Council could help here in terms of paying for a consultant to develop the idea and sound it out with potential tenants? It would definitely be a win for Wellington,” Calver wrote.

The back and forth communication between Calver and RJH’s Wellington asset manager Matt Gibbs and general manager Aaron Leech took place across several months last year.

Calver suggested approaching Wellington foodie mecca Moore Wilsons and its Auckland-based counterpart, Farro Fresh.

There was also mention of a live music venue as another option, and an “informal catch up” was held in September.

However, it seems the council was snubbed, with Gibbs confirming this week there had been no support or introductions by the council that had any bearing on lease arrangements.

“WCC have been supportive of what we are doing and did make a couple of introductions – none of which got anywhere. I can also confirm the offer to provide design concepts was never provided either.”

Claire Terry closed her Madame Fancy Pants store in Cuba St in February, after 17 years in the city. She said it was galling the council would step in to help a wealthy property developer, yet repeated calls for assistance from small, independent operators who make the city tick fell on deaf ears.

Council spokesperson Richard MacLean said it was not unusual for senior staff to have discussions with developers and other businesspeople about their proposals and to look at how the council might be able to offer help.

“We’ve been doing deals with developers since, as far as I recall, at least the mid-1990s.”

The David Jones building was home to high-end department store Kirkcaldie & Stains for 153 years before it closed in 2016. It was replaced by the Australian retail giant which, at the time, said the “appetite” for luxury goods and big spending habits of Wellingtonians was a catalyst for attracting it to the capital, as was the cruise ship market.

First Retail Group managing director Chris Wilkinson said Wellington City Council was also involved in that company’s decision to occupy the building, by appointing a dedicated case manager to deal with consents and red tape issues.

Despite that, David Jones pulled the pin after just six years in the capital, shutting its doors in June 2022. It still has a store at Westfield in Newmarket, Auckland.

Moore Wilsons was among a group of central Wellington businesses who wrote an open letter to Mayor Tory Whanau in June opposing the Let’s Get Wellington Moving (LGWM) proposal to remove private vehicles from the Golden Mile, saying it would “suck life from a city still reeling from the pandemic”.

Councillor Diane Calvert suspected major construction work being carried out as part of the project, due to start early next year, would be a major deterrent to any potential tenant.

“Anecdotally that’s the bigger issue – whether a tenancy would be a viable proposition.”

Wilkinson said the business environment continued to be a challenge, especially for the food and beverage sector, with property owners cautious about entering into major commitments.

“We were working in Sydney CBD last week and food and beverage spaces have the greatest vacancy while many of the independents and chain have been struggling to attract customers since the pandemic has changed consumer behaviour.”

Another disincentive for food operators in Wellington was the development, and recent opening, of Willis Lane, he said.

“That has been under way for some time and because of its blended and experiential hospitality and entertainment mix would have eclipsed what would have been possible in the former department store site.”

MacLean said the council’s Economic Wellbeing team would be happy to talk to any businesses, including smaller operators who were struggling, about possible support options.