River deal big on cost, short on detail
It must have come as a great relief to the Hamilton ratepayer back in July when an Audit New Zealand report exonerated its mayor, its chief executive and a pair of local developers of collusion or favouritism.
Andrew King, Richard Briggs, Matt Stark and Leonard Gardner were the respective players in the farce, accused of getting a little too cosy when discussing King’s plan to knock down a slew of buildings on Victoria St.
The end goal was to further the opening up of the city to the mighty Waikato, complementing the existing Victoria on the River development, one initiated by Stark.
Mr Briggs’ conversation with Stark and Gardner, a polite inquiry exploring the possibility of the pair selling property to council, was deemed to have in no way given the pair a ‘‘material advantage’’.
Discussions were held behind closed doors – if not in smoke free, back rooms – because of the ‘‘urgency and commercial sensitivity’’ of issues involved, especially given that the proposed Waikato Regional Theatre site is just up the road.
News last week that the Hamilton City Council has paid $6.49 million to purchase four buildings adjacent to the Victoria on the River development must also ease concerns the proverbial ratepayer might have over impropriety.
It is true that the figure paid was marginally over that of current market valuation. The differential was a mere $2.2 million, or thereabouts. Chicken feed, really, especially for a city that’s flush with funds. If the coffers do happen to run dry there’s always that old standby, the out-of-the-blue rates hike. Hamiltonians are an understanding lot, especially when treated as cash cows. Well, not understanding as such, more indifferent.
Next to nobody votes in local body elections so I guess we’ve got ourselves to blame. Mayor King’s winning majority was 6 – that’s a cost to the city of just over a million dollars per deciding vote.
Lest we be concerned about the expense of implementing his grand design, Mr King reminds us that ‘‘the value for the city is more than just money’’ and ‘‘it’s about ensuring future generations and future councils have options’’.
An unusually philosophical position for someone who in civilian life sells used cars, furnishes finance to the desperate and develops property. If nothing else, our mayor is a deal maker.
The surprise about this deal is that, officially at least, the plan is so vague. Council has no set date for demolition or timetable to keep. It does rather beg the question as to why the sale was so urgent, especially at what at first glance appears to be an inflated price.
Rental income, we are told, will ‘‘largely offset the cost of purchasing the property’’. Really? If so, why were the existing owners so keen to offload such prime real estate? Two of the four properties were sold by Matt Stark, a gentleman, it is safe to assume, well known to all the major players.
News that he was ‘‘approached by council’’ will surprise no one. Stark’s motivations for selling, as volunteered to Stuff, were entirely altruistic. He and his partners ‘‘are not the type of people to stand in the way of a greater vision of the city’’.
Stark says he sold one property ‘‘at cost’’. The other, acquired in a liquidation sale, he has presumably realised a profit on, though claims he let go at ‘‘significantly under market value’’. His opinion of market value is at odds with official figures. Such is entrepreneurial high finance.
No doubt the same commercial sensitivities alluded by Audit New Zealand in July would preclude any closer examination of the sale.
The public and the press were certainly excluded from negotiations on these grounds. Almost a month elapsed between the closing of the deal and its announcement. Commerce was done but it was not seen to be done.
Mayor King has spent a good deal of his tenure telling us how unexpectedly broke the city is. Those invested in destination playgrounds, to name but one project axed under his belttightening regime, have been denied their swings and roundabouts. Yet money is miraculously found when it suits him.
Personally, I am concerned more with the opportunity cost to adults of musical discernment.
Nivara Lounge is the city’s prime live music venue, a godsend to performers across a wide range of genres and age groups. If, as looks to be the case, we are to lose Nivara as a consequence of this back room deal, Hamilton will be the poorer for it.
Hamilton Mayor Andrew King