Ratepay­ers’ group com­plains to SFO over buy-ups

Hamilton News - - NEWS - Nikki Pre­ston NZ Her­ald re­porter

Hamil­ton Res­i­dents and Ratepay­ers As­so­ci­a­tion has com­plained to the Se­ri­ous Fraud Of­fice over the coun­cil spend­ing $2 mil­lion more than mar­ket val­u­a­tion for river­side prop­er­ties.

Hamil­ton City Coun­cil con­firmed last week it had paid $6.49m for five prop­er­ties be­tween 242-266 Vic­to­ria Street — spend­ing up to 56 per cent more than the rec­om­mended mar­ket val­u­a­tion for most of them.

Hamil­ton Res­i­dents and Ratepay­ers As­so­ci­a­tion pres­i­dent Mis­chele Rhodes said on be­half of the group she had ap­proached the Se­ri­ous Fraud Of­fice about the pur­chases.

“The ques­tion re­main­ing is how and why HCC paid $2m well over mar­ket rates us­ing hard­earned pub­lic (ratepayer) money?,” she said.

The coun­cil paid $3.75m, or 56 per cent over mar­ket val­u­a­tion, for 242-254 Vic­to­ria Street; $1.95m, 56 per cent over mar­ket val­u­a­tion, for 266 Vic­to­ria Street; and $790,00, 21 per cent over mar­ket val­u­a­tion, for 260 Vic­to­ria Street.

In a state­ment at the week­end, Rhodes said the de­ci­sion was hard to fathom when coun­cil had re­cently ap­proved a mas­sive 9.7 per cent rates in­crease this year fol­lowed by a 3.8 per cent rise for the next eight years and peo­ple were strug­gling to make ends meet. “All coun­cils should seek to get the best pos­si­ble rate when pur­chas­ing prop­er­ties with ratepay­ers funds.

“This was also a deal that was sub­stan­tially sub­mit­ted against at the re­cent con­sul­ta­tion on the 10-year-plan.”

Hamil­ton City Coun­cil chief ex­ec­u­tive Richard Briggs has de­fended the pur­chases.

The coun­cil went through a ro­bust process to pur­chase the prop­er­ties, which started more than 12 months ago and was con­firmed through coun­cil meet­ings and res­o­lu­tions, he said.

“I don’t know what fur­ther in­for­ma­tion the res­i­dents and ratepay­ers as­so­ci­a­tion may be seek­ing, but I in­vite them to con­tact me and re­quest it.”

The cri­te­ria the SFO uses to de­ter­mine whether it wil in­ves­ti­gate, ac­cord­ing to its web­site, in­cludes look­ing at the num­ber of peo­ple af­fected, whether it un­der­mines pub­lic con­fi­dence in New Zealand as a safe place to in­vest or the in­tegrity of the fi­nan­cial mar­kets, the com­plex­ity of the case and the level of pub­lic in­ter­est and whether prose­cu­tion would have a pre­ven­ta­tive im­pact.

Hamil­ton mayor An­drew King last week de­fended pay­ing well above the mar­ket val­u­a­tion pro­vided to the coun­cil by in­de­pen­dent prop­erty val­uer Telfor Young be­cause they were pre­mium prop­er­ties that would help progress his dream of open­ing up the cen­tral city to the river.

As part of the coun­cil’s 10-year­plan in June, the coun­cil ap­proved spend­ing $7m to­wards strate­gic prop­er­ties, but no fur­ther pro­vi­sions were made or plans adopted. With $6.49m al­ready spent within two months of the fund­ing be­ing ap­proved, the coun­cil on has just $510,000 left to buy any other prop­er­ties in the des­ig­nated strip.

Ear­lier this year and prior to the prop­erty pur­chases be­ing made, an Audit NZ re­port found there had been no ma­te­rial ad­van­tage given to de­vel­op­ers and prop­erty own­ers Matt Stark and Leonard Gard­ner when it gave them the heads-up about a pro­posal to buy and bowl the build­ings be­tween cen­tral city park Vic­to­ria on the River and Em­bassy Park.

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