Councillor Mike Lee says the planned sale of the Civic Administration Building by Panuku Development Auckland should be referred to the Auditor General.
Panuku, a Council Controlled Organisation, is planning to sell the historic Grey’s Ave building to Civic Lane Ltd, which wants to turn it into apartments. The wider $200 million to $300 million development is expected to include new commercial office and retail space, as well as a hotel built on Mayoral Drive itself.
Auckland Council voted to approve Panuku’s proposed sale of the building last Thursday after excluding the public from a briefing and to vote on the issue. But the details regarding how much it has been sold for remain under wraps and councillor Mike Lee is threatening to take the issue to the Auditor General.
“All the debate went on behind closed doors. The more I think about this the more appalled I am by the whole process,” Lee says. “It’s really a metaphor for the whole Super City and the complete lack of focus on the public interest.”
'The price isn't good'
Lee put forward a motion, which was seconded by councillor John Watson, calling for Panuku to suspend any sale or transfer of ownership of the historic property until the Council had been provided with a full report of the commercial details of the proposed transaction, including the price. And they also wanted more information on how the outstanding heritage concerns relating to the Category A listed building had been resolved.
The motion was defeated, but Lee says it doesn’t take away from the fact it’s a bad deal. Lee says he’s unable to divulge the price the building’s being sold for, but it isn’t good.
“The price that the building is being sold for on behalf of the people of Auckland is disgracefully low. And the ratepayers are giving them half a hectare of land in the central city as part of the deal. The whole thing is a disgrace.”
He says when the Council first announced it was looking at selling the building in 2016 Tawera Group was expected to buy it. But now, almost three years later, it’s now being sold to a different company, Civic Lane Ltd, which is owned by Tawera Group’s chief financial officer John Love and his wife Josephine Love.
Mayoral candidate John Tamihere agrees the deal should be referred to the Auditor General.
Tamihere says the fact the building, which he claims is being sold for $3 million, will sit right above the underground Aotea Station being built as part of the City Rail Link project means its future value is only going to increase.
“If they sat on it until 2021 it would be one of the most expensive pieces of real estate in the country. So why would you want to sell it for $3 million?” he says.
“I think Mike’s right. I think this has to go to the Auditor General, or there has to be an independent inquiry by a QC.”
Councillor John Watson has similar concerns and says Panuku's brief is to optimize the commercial return to council it makes from property sales. But Watson says that's hardly the case with the Civic Administration Building. He questions the accuracy of some of the information given to councillors on the cost of refurbishing the building and removing asbestos, which was used to justify the sale in 2016.
"It appears that those figures were totally inaccurate," Watson says. "My other concern is also with the way the council delegates to Panuku the authority to dispose of property like this without knowing the price."
He says while councillors were told in confidence how much Panuku is planning to sell the building for, they had no idea what it was worth when they gave Panuku delegated authority to sell it in 2016.
"How can councillors make an informed decision without knowing the potential price?"
Neither Panuku nor Civic Lane Ltd director John Love have responded to requests from interest.co.nz for comment for this article. However, when contacted last week about the upcoming council decision, Panuku's director of development Allan Young said he couldn’t dislose any details about the sale.
“Panuku is continuing to work through the details of the development agreement with Civic Lane Ltd, we are unable to provide an exact date but we hope to conclude an agreement very soon.
“The development agreement between Panuku and Civic Lane Limited for the regeneration of the Civic Administration Building (CAB) is confidential and cannot be discussed, this includes the price. Panuku is continuing to work through the details of the agreement to regenerate the CAB and surrounding land into a mixed use development featuring retail, commercial, hospitality, and accommodation, breathing new life into a key part of our city centre," Young said.
“The redevelopment of the CAB will meet Council’s heritage and design requirements for this iconic building and will deliver on the desired outcomes for the project, as outlined by Council when it was given the green light.”
'A good outcome for Auckland'
And despite the criticism of the planned sale, Mayor Phil Goff says it's a good outcome for Auckland.
“Due to the significant costs of remediation and preserving the heritage of the building, the deal put to council is the best deal for ratepayers.”
The Civic Administration Building was designed by Hungarian architect Tibor Karl (TK) Donner and was officially opened in 1966. It is recognised as New Zealand’s first skyscraper and building the structure required the use of, what was at the time, cutting edge construction techniques.
The building has been vacant for the past five years following the Auckland Council’s 2012 decision to buy the ASB building in Albert Street for $104 million.
A council report from 2015 stated that the property was unsuitable for long term use without significant refurbishment, including removing asbestos from the building. The council voted to seek interest from the private sector to refurbish the Civic Administration Building while maintaining its heritage value, as far as practicable. The council also said it would consider the sale of the building and surrounding land to a selected development party on a freehold or long term leasehold basis.
In September 2016 former Mayor Len Brown announced that Panuku had selected Tawera Group to restore the historic building. At the time the Auckland Council said it was working through the resource and building consents, particularly in terms of the refurbishment works. While some media reports at the time even suggested the Civic Administration Building had already been sold, it appears now that’s wasn't actually the case.