Reading breaks silence after Wellington council deal falls flat

Wednesday, 24 April 2024

The Wellington City Council is looking to buy the land under the cinema, with the $32m it will give to Reading being used to fix it.

The multimillionaire owner of the Reading empire has made her first public statement on the now-failed $32m Wellington City Council plan to reopen the long-shuttered eyesore.

“The Reading team were told by council staff just ahead of a meeting which Reading understood had been organised with key principals of both parties in order to bring the deal to a close,” Ellen Cotter said in a lengthy written statement to The Post. It is the first public statement the company has made about the deal.

“There was no prior notification or indication council was terminating. To say we are disappointed is an understatement.”

She confirmed she was told the deal was over on April 16 ― a week before Wellington City councillors and the public were told.

“The redevelopment in collaboration with the Wellington City Council would have delivered Wellingtonians a 100% [new building standard] building, including a top to bottom transformation, recreating a world-class cinematic experience and a diverse mix of hospitality,” she said.

“It would have generated up to 200 employment opportunities when open. Based on significant pre-development work that Reading had done pre-pandemic, Reading’s plans would have ensured an accelerated re-launch of Courtenay Central.”

The 10-screen Reading cinema and shopping complex shut after a structural report in 2019 and has been a blight on the popular entertainment strip since. In an effort to get it reopened the council had hammered out a deal with the NASDAQ-listed Californian owners, in which the council would buy the land under the complex and Reading would use that money to help reopen the building.

The Reading complex on Courtenay Place in Wellington has been closed since 2019.

On Tuesday the council confirmed the deal had been cancelled and on Wednesday refused to confirm if Reading was taking legal action as a result. Reading has been asked for comment.

Cotter on Wednesday sad the decision to close in 2019 was to “avoid risk to our people and customers” but reopening was complicated by Covid-19 high inflation and rising interest rates.

“We nevertheless remained committed to Wellington. We have a significant presence in the city. We have the Courtenay Central site and two adjoining sites,” she said.

Reading’s investment would have been more than double the $32m the council would have spent, she said.

A week in the dark

Meanwhile, it was revealed on Wednesday that Wellington mayor Tory Whanau invited councillors to a workshop to clear the air over the Reading deal three days after it had been canned but four days before they were told the deal was off.

Even now, eight days after the council informed the owners of the eyesore Courtenay Place property that it was withdrawing from a $32 million deal, and a day after councillors and the public were told, councillors Iona Pannett, Ray Chung and Diane Calvert confirmed they haven’t been able to find out what specifically soured the deal.

A message to councillors on Tuesday confirmed that Reading’s owners were told the deal was dead on Tuesday last week. The Post has seen an email from Whanau three days later inviting councillors to a meeting on April 30 to clear the air over leaked information about the Reading deal.

Councillor Iona Pannett: “I reckon it is too hot politically.”

Pannett, Calvert, and Chung ― all investigated but cleared over the leak ― confirmed they were not told the deal was off until Tuesday this week. They all confirmed that staff were specifically asked what had changed but did not give adequate answers.

Wellington Mayor Tory Whanau said there were a week of discussions with Reading, even after the $32m deal was cancelled.

“I reckon it just got too hot politically,” Pannett said.

Whanau on Wednesday confirmed she and deputy Mayor Laurie Foon met with senior council management last week and were told the advice was to not proceed. She could not immediately say what specifically had changed in the deal but said the final decision was made by council chief executive Barbara McKerrow.

The week between was taken up with ongoing talks with Reading, though she could not say if Reading was threatening legal action. The final decision was made on Tuesday this week. The council got legal advice on withdrawing from the deal, she said.

Chung had previously asked the Office of the auditor-general and Ombudsman to investigate the deal. He said the investigations should still go ahead so the council could avoid similar future stuff-ups but Whanau said the suggestion was “ridiculous”.

Pannett said it was also unknown how much the ordeal had cost the council, including external advice. The council has been asked to provide costs but those previously reported on included a $1400 meal for the Reading owners and others in Wellington and $43,000 to investigate five councillors accused of leaking information about the deal.

Chung, who said he was yet to get confirmation if his complaints to the auditor-general and Ombudsman would be investigated, said he was still awaiting crucial information about the deal from council staff.

“The buggers [have] given me a copy of the valuation or the due diligence,” he said.

“All the information they are basing their information on, they are not giving me.

“Who the hell is running this ship?”

Calvert said it was “surprising” the council kept the deal cancellation secret for a week ― especially as the invitation to the clearing-of-the-air meeting came during the week.

Attempts in a councillor-only meeting on Tuesday to get specifics of why the deal was canned were unsuccessful, she said.

“We got pretty much what was in the press release.”

That release said: “Senior council staff reached a position where they did not believe they would be able to reach the best possible outcomes for Wellingtonians and the decision was made this week to not pursue the proposal further.”