Wellington council looking to sell land to fund Reading deal, sources say

Thursday, 22 February 2024

Ellen Cotter, pictured top right, heads her family's entertainment empire with sister, Margaret. The pair met with mayor Tory Whanau, bottom right, more than a year ago. (Composite image)

The Wellington City Council is considering selling its own land to fund a $32 million deal bankrolling the millionaire-owned Reading cinema empire, multiple council sources say.

Council chief financial officer Andrea Reeves on Wednesday sent a statement: “So long as the matter of commercial negotiations for Reading remains ‘public excluded’, council staff cannot comment on it, including the speculation surrounding it.” The council a day earlier denied there was any such deal.

The $32m Reading deal was to be debt-funded but multiple council sources now say that the council is looking at what it can sell to buy the Courtenay Pl Reading land. They say the current thinking is of selling council ground leases, where the council owns land and leases it to private building owners.

“Why the f… would you do that?” one councillor remarked on Tuesday.

The council has spent years trying get Reading to reopen its Courtenay Pl complex, which was closed after an engineer’s report in 2019 and has been a blight on the city’s party district since. The Post previously revealed that the millionaire Los Angeles-based Reading owners flew to Wellington four days after Tory Whanau became mayor and were wined and dined at a top-end restaurant, racking up a $1400 bill.

Leaked details earlier showed the council planned to borrow money to buy the land under the cinema for $32m, which Reading would spend renovating and eventually have the option of buying the land back at the sale price.

Leaked details of the key commercial terms with Reading, from October, show the council was to pay $6m on signing the final deal.

The Reading complex in Courtenay Place has been closed since a 2019 engineer's report.

Reading then has to meet a number of conditions within two years to get the remaining $26m, including getting consents, having a construction programme, confirming funding, and having plans for things including an “active frontage” and public ground floor toilets. The full payment is to be made before most physical work begins.

But the council is nearing its debt ceiling while facing billions of dollars in costs to fix failing pipes on top of big spends such as a $147m cost blow-out to strengthen the Town Hall.

The council was this week asked what conditions were placed on Reading getting the money, what would trigger payment, whether there was a time limit for work to be done, and whether there was any concern that Reading was building Australian multiplexes yet needing ratepayer money here.

“We’re not willing to answer your questions given we’re in a live negotiation,” council spokesperson Richard MacLean said. “We’ve got confidentiality clauses in place and there’s the issue of timing – with a debate to come next week on the notice of motion.”

That notice of motion, put forward last week by councillor Iona Pannett, would essentially derail the whole deal and is expected to be voted on by the council in late-February or mid-April.

“There needs to be full transparency about how public money is supporting private owners, for whatever reason,” Pannett said this week.

The council also this week refused to say what powers the council had to get the cinema demolished and whether Reading was paying reduced rates.

Public relations firm Acumen, which is handling enquiries for Reading, would not comment.