Wellington Scoop

The council delivers a bargain: only a dollar a year for CBD land

Property buyers are being offered the chance to own two of the Victoria Street buildings that were beautifully restored as part of the Chews Lane redevelopment. It’s a sweet deal. The buildings are on city-owned land, and the Wellington City Council is a generous landlord – the ground lease is a dollar a year for 250 years.

Real estate agent Paul Hastings told the DomPost yesterday that this concession was needed to make the Chews Lane development viable for its developer Willis Bond.

But the council’s generosity benefits more than the developer. It now becomes an even sweeter deal for the family trusts or high net worth individuals who will become the buildings’ new owners and who will collect a net annual income of more than $900,000 a year. They could pay the entire 250-year lease from their petty cash.

Still, 250 years isn’t as long a time frame as the lease which the council gave in the 1990s to the developers who built the Queens Wharf Retail Centre (the huge waterfront building where no one wanted to go shopping and which was converted into offices.) The council was persuaded to sign a lease of 999 years for this public land. There was an outcry when the deal was discovered. Will there be a similar response to the news of the dollar-a-year 250-year lease for the Chews Lane land?

Last year, the New Zealand Portrait Gallery wasn’t given nearly as good a deal. The best it could get, as it negotiated with the council to lease the century-old Shed 11 on the waterfront, was 25 years, with one right of renewal. A national cultural institution might have expected the city to offer a peppercorn rental. But no. It had to pay the council a one-off sum of $1.45million. Evidently the council believes that cultural organisations have deeper pockets than property developers. And shorter lives.

1 comment:

  1. uke, 9. November 2011, 17:26

    Time for council executives and their cronies to move on.