Property deal no longer needed

Government funding to help build a new library and art gallery in Blenheim means the council can keep the proceeds from selling one of its most high-profile commercial properties.

The Marlborough District Council had planned to sell its Queen St property, housing the health hub and Noel Leeming, to help pay for the $20 million riverside project.

But the government announcement on Wednesday meant the council could put the money from the sale into council coffers.

The council called for proposals to purchase the health hub and Noel Leeming building prior to Covid-19. The close off date was April 3, but no responses were received, a council spokesman said.

The council would revisit the sale in the future, he said.

The council decided to sell the property in early 2019 to help fund the new library and art gallery project.

That was before a national health system review in June proposed district health boards stop contracting out to primary health organisations (PHOS).

The council was not worried about new buyers being put off by the prospect that PHOS might cease to exist in coming years, as Nelson Marlborough Health had a long-term lease, the spokesman said.

‘‘We will keep an eye on the commercial building market to inform our decision-making on the timing of this [sale],’’ he said.

Bayleys commercial and industrial agent Grant Baxter said a building was ‘‘far more attractive’’ to investors if it had tenants.

‘‘It’s a better return on their investment, compared to say bank interest rates . . . People aren’t going to buy an empty building,’’ Baxter said. ‘‘A wellmaintained, well-tenanted building will sell in any market.’’

Baxter said an Australasian retail company made an offer on the building several years ago, which he presented to the council, before it decided to turn down the offer in favour of the district health board.

Board member and councillor Gerald Hope said a government decision on the health system review was ‘‘a long way off’’, and was unlikely to affect the building, which would still have health services.

The council also planned to sell the old Blenheim library in 2024, two years after construction on the new project was expected to finish, in September, 2022.

Proceeds from the sale would go into council reserves. The council was unsure where to put the proceeds from the sale of the Queen St property.

The new library and art gallery was one of 150 projects approved as part of the Government’s ‘shovel ready’ initiative, and one of 12 to be announced on Wednesday. The Government had allocated $85m for the top of south, with the project the only project announced so far.

Marlborough mayor John Leggett said the funding was a win for the region.

‘‘We know the Covid-19 emergency will have a serious impact on our tourism, retail, hospitality and construction sectors. This project will help support new, local jobs here and provide a destination for visitors to Blenheim, drawing them into our town centre,’’ he said.

The tender process to determine who builds the new library and art gallery closes on July 15.