More than just Reading between the lines
Tuesday, 20 February 2024
Dave Armstrong is a playwright and satirist based in Wellington. He is a regular opinion contributor.
OPINION: Imagine you’re a struggling Wellington apartment owner. Your mortgage payments have skyrocketed and you’re struggling to make the council deadline for earthquake strengthening your building. It’s going to cost you half a million bucks which you don’t have.
Then you get a call from the local council who want to take you out for dinner and buy you expensive bottles of wine so they can buy the land underneath your apartment. This will allow you to pay for earthquake strengthening yourself and if you want to buy back the land years down the track, no problem, it will only cost you what you sold it to the council for.
I know this seems absurd, and yet it is exactly what happened to Reading Cinemas just days after Tory Whanau was elected mayor. The Reading deal wasn’t something anyone campaigned on, although Whanau did mention revitalising the inner city, but is something that the council management told its newly elected leader, who still seems to lean on them heavily, that it was crucial.
Usually, it would be the party wanting to sell the property doing the wining and dining, not the buyer. But this is Wellington, the town where limos were put on by John Key’s government to transport Hollywood executives during the Hobbit kerfuffle. It’s the town where in 2013 the council lent an Australian company $300,000 to set up a call centre. The company soon went bust having only paid back half the money.
The whole murky Reading deal has been cloaked in secrecy, which is why the council leadership were so furious when some councillors dared to publicly comment. Hell hath no fury like a bad plan uncovered.
The expensive code of conduct complaint revealed little. Most Wellingtonians are more concerned about the Aqualamity with Wellington Water, and proposed cuts to their libraries and swimming pools.
Wellingtonians should be asking hard questions about the Reading deal. The first is why can’t Reading pay their own strengthening bills like everyone else? Didn’t they get an insurance payout? Remember that they are a multinational company owned by millionaires who recently opened three cinemas in Australia.
If Reading are such a great company, concerned about revitalising Courtenay Place, why have they done absolutely nothing about renovating their building to the required level, apart from quaffing from free council-provided wine at Ortega and putting out their hands for over $30 million? Why are some councillors so worried about one of the ugliest buildings in the city? Old St Pauls the Reading Centre is not.
If a tornado were to flatten it tomorrow, Wellington’s heritage value would increase. Not decrease.
Why has the Reading Cinema been allowed to just stand there? Are they still paying rates on the land or are the desserts at Ortega not the only sweeteners being offered to Reading by council? A fairer land-based rating system would penalise owners of large unused properties and avoid land-banking, and give more breaks to developers wanting to intensify, and smaller property owners such as apartment owner/dwellers with a big earthquake strengthening bill.
If we do hand over $32m to the Americans, not including tips, can we guarantee that they will successfully carry out the restrengthening on reclaimed land which is greatly prone to liquefaction and not go belly-up? According to the Simply Wall St website, Reading International shareholders have endured a 87% loss over the last five years. And the stock price dropped 40% in the year ending in October 2023, while the overall market went up an average 13%. If it barks like a dog…
According to Simply Wall St, while Reading International is trading at good value compared to its peers, its debt is not well-covered by operating cash flow. No wonder they were keen to show up at Ortega with $32m on the menu.
Councillor Iona Pannett, hardly a raging, pro-austerity Thatcherite, has filed a “notice of motion of revocation” to nix the Reading deal. This time around few councillors, apart from Green councillor Nīkau Ni Weera and Independent Tim Brown, have confirmed they still support the deal.
And our Labour councillors with possibly the crucial votes? Unlike their colleagues at national level, I have noticed that Wellington’s Labour councillors have often outflanked the Greens on the left when it comes to supporting low-income people and protecting council assets from privatisation.
Will they vote against the neo-liberal madness of bailing out a struggling overseas company to possibly strengthen its central city eyesore, when water is continuing to leak and library hours and swimming pools are being openly touted for the chop?
Voting for Pannett’s motion would send a message that our Labour councillors did not just have the best interests of ordinary Wellingtonians at heart, but were also fiscally responsible.
As the Simply Wall St website said about Reading International, “some stocks are best avoided. We really hate to see fellow investors lose their hard-earned money”. I hope our councillors take the same advice about investing Wellingtonians’ hard- earned rates money into Reading.