$32m in ratepayer money tied up in Reading deal
Wednesday, 18 October 2023
Wellington City Council is considering spending $32 million to buy the land under the Reading Cinemas complex on Courtenay Place, leaked details from a private council meeting reveal.
Multiple sources have confirmed the $32m figure. It is understood that the deal would mean Reading uses the $32m of council cash to strengthen the building, which abruptly closed in 2019 after a report raised quake fears. It is also understood councillors voted to start due diligence on the deal.
Sources have also confirmed the deal, discussed in a public-excluded council meeting, would mean Reading International has the option of buying the land back from the council at the same price it sold the land.
The exact time frame for the deal was not immediately clear though is thought to be about a decade, after which Reading could buy the land back at market value if it chose.
Mayor Tory Whanau — who this month launched an investigation into five councillors after a related alleged leak — would not comment on the $32m deal on Monday. The council also declined to comment.
The figure comes amid a grim time for the council coffers. It was recently revealed the cost of strengthening the Town Hall could jump from $182m to $329m. This followed reports showing the council-owned Michael Fowler Centre and Opera House were quake prone and, while safe to use, will need to be strengthened within 7½ years.
Wellington rate payers were already digging deep with big rates rises the past three years as the council faces a blizzard of charges including failing pipes, rising insurance, and inflation, while spending on a revamped central library and new events centre.
Property files from 2022 show Reading NZ owns three property parcels in the Courtenay area that, on 2021 ratings values, were worth $64.3m. Reading NZ is eventually owned by Reading’s international arm, which lists the Courtenay Place complex on its website.
Reading International’s online statements show it took in $187.6m in revenue in the six months to June though ended up posting a $23.3m loss in the half-year.
The Reading Cinemas complex on Courtenay Place, which housed a food court, retail, and cinema complex, was suddenly closed in early 2019 due to a report into its ability to withstand a earthquake. It has been empty since with many bemoaning the dead-zone it created in Courtenay Place night life.
Lambton/Pukehīnau ward councillor Iona Pannett in 2022 labelled it a “blight on the city”. Various plans for a resurrection of the site have been floated.
Reading International president and chief executive Ellen Cotter in late 2022 said the company planned 'a top to bottom renovation of this theatre with full luxury recliners, beautifully renovated lobby spaces and an elevated [food and beverage] experience'.
But it remains virtually unchanged and earlier in October the Wellington City Council discussed a “city activation project” in a public excluded session, which turned out to be about the council buying the land under the cinema. The extent of the planned purchase has not been confirmed.
The leak of the deal led Whanau to start an independent review to establish if councillors had breached the council’s code of conduct in releasing the details.