Auckland Council’s whopping legal bill amid fight over Downtown Car Park

Monday, 16 September 2024

Hundreds of thousands have been spent on both sides in a futile dispute over the future of a downtown parking site in Auckland, which is set to be redeveloped by Precinct Properties. Amelia Wade reports.

At seven storeys high, the Downtown Car Park’s concrete labyrinth offers a prime location, Viaduct views and some of the most affordable parking in the city for a generous 2000 cars.

But despite all it has going for it, it’s only ever half full.

It’s also technically earthquake prone and needs $20 million of seismic strengthening, so in 2020 Auckland Council, led by Phil Goff at the time, agreed to sell off the asset.

Three years later it was announced Precinct Properties, developers of nearby Commercial Bay, would buy it for $122 million provided the council scrapped the previous conditions for a bike and scooter hub, and a street-level bus terminus.

It subsequently partnered with Ngāti Whātua Ōrākei on a plan to transform Tāmaki Makaurau’s skyline.

The car park would be demolished, and in its place would stand two 56-storey skyscrapers with offices and more than 200 apartments. At its feet would be shops, eateries and a connection between the east and west of the city centre - from Commercial Bay through to the Viaduct.

Iwi deputy chairperson Ngarimu Blair has called the project a 'generation-defining development'.

'This is our chance to share in the economic prosperity of Tāmaki Makaurau. A city that has hurt us so much, but a city that offers not only us, but all of you, an opportunity to thrive.”

But to a vocal group of downtown business owners and residents, the sale was anything but an opportunity.

Landlord and rival property developer Andrew Krukziener made a last-minute bid to the council as the secretary of the Save Queen St Society to stop the sale.

“Demolishing the Downtown Car Park damages the city. It makes it harder to shop, dine, attend events and access the gulf islands,” Krukziener told councillors in a tense council session.

“Businesses will close, buildings will be abandoned and the city will die.”

Krukzeiner is the founder of Krukzeiner Properties, and has owned and developed more than 70 buildings throughout Auckland's CBD, including the Old Magistrates Court Building at The Metropolis, the Contemporary Art Gallery on Lorne St and DFS Galleria on Customs St and 131 Queen St.

Right before the vote to finalise the sale and purchase of the building, Krukziener presented an alternative vision to keep the car park and for the council to instead sell the rights to build above; a plan he said would save the council between $200-250m.

The buildings should be “beautiful” and iconic, he said, before taking a swipe at Precinct’s proposal, calling its design “at best ordinary”.

The meeting got heated when councillor Chris Darby asked Krukzeiner whether he’d put forward a pitch for the site.

“I did not,” he replied, then said he was only interested in preserving public parking.

“Which I know you are diametrically opposed to but you are wrong and you will damage and have damaged and will continue to damage the city by trying to get rid of parking.”

His comments to Darby had to be interrupted with a point of order.

Krukziener also told the councillors that under the Local Government Act they had an obligation to seek and consider all reasonable options, which he claimed they had failed to do.

After councillors voted to continue with the sale, Krukziener and the Save Queen St Society took the council to court seeking a judicial review.

A Givealittle page was launched to raise $500,000 for legal fees. It got $2,170 from 50 people. Car park user Shery Gartner also launched a petition, which received 9,955 signatures.

But the petition failed, and the lawsuit was settled days before it was set to be heard in the High Court at Auckland.

The council is still tallying the legal fees but the Sunday Star-Times can reveal it now estimates it could end up costing ratepayers $300,000.

This is made up of lawyers’ bills and a “small contribution” to Precinct, said Max Hardy, the council’s director of the chief executive office.

“The latter acknowledges that this was a challenge to the council’s decision-making which impacted our development partner and resulted in withdrawal of proceedings, therefore avoiding ongoing uncertainty and further legal costs.”

No money went to Krukziener or the Save Queen St Society, the council confirmed.

Precinct Properties deputy chief executive, George Crawford, said the council’s payment was a contribution to the legal fees they incurred for being named as a second respondent and to look into how an unfavourable decision could impact their development.

The settlement is confidential and no parties spoken to by the Star-Times would confirm who got what - though the council said it “was not a party to any settlement other than that it consented to Save Queen St withdrawing its proceedings”.

Despite numerous attempts to speak to Krukziener, he did not respond to calls or emailed questions.

Calls to Gartner about why the settlement was dropped were returned by self-described community advocate Gael Baldock.

Baldock said the lawsuit was dropped by Krukziener on the advice of his lawyers, who said a similar case in Wellington had failed to change the council’s decision.

What was the point of spending all that money if the outcome could have meant the equivalent of a “slap across the face with a wet bus ticket”, said Baldock.

In a text message Gartner said the $2000 donated to the cause to save the car park had been spent.

“Andrew spent $400,000 on legal bills to get to the point of finding out if we had a good case.”

Save Queen St Society has now twice attempted to sue the council over its decisions.

The first was in 2021 to stop work to make Queen St more pedestrian-friendly, calling the plan a “disgrace”. The dispute was settled out of court after the council and Auckland Transport reportedly spent $500,000 in legal fees.

While the recent lawsuit proceeded, Precinct continued on with getting consent issued so there were no delays to getting spades in the ground. That’s still expected to be in 2026 after the car park closes next year, said Crawford.

It will then take about four or five years to build the skyscraper.

Already, Precinct is in exclusive negotiations with an occupier for 40% of the offices.

“That’s one of the key things we need to get underway with developing, will be significantly advancing the leasing so that shows a really good confidence in the city centre,” said Crawford.

The council has amended the sale conditions of the site and Precinct has agreed to ensure there will continue to be 200 public car parks.

At Commercial Bay, Precinct trialled valet parking but there wasn’t sufficient demand to keep it going, which it believed meant a lot of people who used the area did so because they worked nearby and caught public transport in.

By the time the tower is completed, the City Rail Link will be open with the potential to move 45,000 people per hour.

The new building will provide connections from the east to the west of the city, from Commercial Bay through to the Viaduct with shops and eateries, said Crawford.

“We think it’s going to be great for the city centre and for the waterfront and we’re just committed to having the best outcome here.”

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