Ratepayers subsidising waterfront office buildings, claims Taxpayers’ Union

Press Release – New Zealand Taxpayers’ Union
The Taxpayers’ Union is criticising Greater Wellington Regional Council for not bothering to find out how much ratepayers have lost in CentrePort’s property developments damaged in July’s Cook Strait earthquake.

The Port’s borrowing is underwritten by the Council, which means that ratepayers will foot the bill if CentrePort can’t cover any shortfalls in its property investments. Jordan Williams, Executive Director of the Taxpayers’ Union, says:

“We’ve long been concerned that CentrePort has a privileged position of having a debt guarantee from Greater Wellington Council. The guarantee allows the Port to borrow at a cheap rate to fund property development, while ratepayers underwrite the risk. It subsidies the Port’s property development to the detriment of Wellington’s CBD.”

“We asked the Council earlier in the year how much last year’s Cook Strait earthquakes cost, the lost income and any impairment of assets. Amazingly the Council and its investment company, which is supposed to provide oversight of CentrePort, didn’t have the information.”

“We understand from BNZ that its staff are still not fully occupying the BNZ building, some 8 months after the Wellington shake. Despite that, the Regional Council has still not taken the prudent step of finding out how much the Council’s investment company has lost or continues to lose. It may be that insurers are taking the financial hit, but the Council do not appear to have even asked.”

“It’s bad enough that ratepayers are subsiding Wellington office property, but the Council should at least be keeping an eye on what are obvious risks.”

Content Sourced from scoop.co.nz
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6 comments:

  1. City Lad, 6. May 2014, 13:19

    The request from the Taxpayers’ Union to the Regional Council is reasonable and should be answered. But unlike the Wellington City Council which virtually gives away public waterfront land to private developers, often in secret, Centreport has retained all of its developments (land and buildings). So the region’s ratepayers receive consistent income. Not annual $1 nonrenewable peppercorn rents like WCC does.

     
  2. andy foster, 6. May 2014, 21:42

    City Lad – Urban myth. WCC doesn’t give away land. In every situation Council or the Waterfront company has gone to the market and sought to negotiate the best possible outcomes, including financial. What that has meant in I think every single situation is a large payment ($ millions) to Council/Waterfront Company up front. Because the deals have been structured as very long term leases there is thereafter a nominal ($1 type) amount paid from then on – but the reality is the sum received up front is equivalent to a sale value. Have a look at some Waterfront Company Annual Reports and you’d see capital income sums.

    Last point to make is that we may not always go for top dollar. There will be times when it is worth sacrificing some $ amount to get a better outcome in terms of amenity, urban design, heritage retention, public access etc. Classic example would be Chews Lane. Not waterfront but still we went to the market, and opted for a proposal that gave an excellent outcome in revitalising this important part of the city, heritage restoration and strengthening, public access etc, but was slightly less than the highest price proposal. I can say that Council still received an 8 figure sum for the site.

    This was covered at length in a recent article and subsequent series of posts on Eye of the Fish.

    So no, we definitely don’t give away land ! The Port Company has taken a different approach which has clearly got rewards – and risks. The Taxpayers’ Union is quite right to ask questions.

    Regards

    Cr Andy Foster
    Transport and Urban Development Chairman
    Wellington City Council

     
  3. CC, 6. May 2014, 22:33

    Cr. Foster seems fixated with his new urban myth line. City Lad no doubt well knows about the 30 pieces of silver sale to a favoured cartel but made a more pertinent point.

     
  4. Ellie, 7. May 2014, 14:57

    Andy: could you publish accounts of the profits and losses clearly, instead of bland losses for Wellington Council companies, and can they show how much rates the new Kumototo building will really earn in order to compete with ratepayers in other city centre buildings. (Pike – a million $ in rates …. Yeah right)

     
  5. Nora, 7. May 2014, 20:06

    At the Urban and Transport meeting on the 8th April it was reported that Wellington Waterfront Ltd owed $17 million to the City Council. Also the Annual Plan report says savings will be made by bringing the company back into council. But where can we find what the savings will be?

     
  6. CC, 8. May 2014, 7:00

    Nora – seemingly the savings will result from having the WWL CEO answerable to the Council CEO instead of to a well paid and underworked board. Supposedly, this is to retain the skills of the WWL executive – you know, the guys who have run up a $17m debt, failed on legal appeals (how many?) and managed to put a jump/dive structure over a cesspit.

    Some cynics surmise there are a few suspect deals and skeletons in closets that stop the Council from making real savings by disbanding the waterfront privatisation squad completely.

     

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