Offer not enough to sway council from cinema deal At a glance
If everything goes according to plan between the Wellington City Council and Reading Cinemas, the cinema complex could reopen in three years, staff told councillors at yesterday’s meeting.
In doing so they rejected an eleventh-hour offer from Sir Mark Dunajtschik, who said he was prepared to enter negotiations with Reading and use his own money to get the complex back open. The offer would have seen him invest his own money to help Reading redevelop the complex, with lease payments flowing back to charity.
The majority of the council decided to proceed with the deal, which had already been 80% agreed between staff and Reading Cinemas.
After the vote Dunajtschik said he was “distinctly disappointed” the council had voted in favour of proceeding with its own deal. “They will use our money, ratepayers’ money, and from then on we will have no control.”
Chief financial officer Andrea Reeves noted that Dunajtschik had made offers to Reading before, which the cinema company had not accepted.
“Reading has entered into these negotiations with us to redevelop the site. They still want to own the site and redevelop it. I'm not sure that what their other intent would be with other developers.”
Business relations manager Phil Becker noted that none of the previous offers from Wellington’s developer market had interested Reading.
Around the council table the supporters of the deal did not believe anyone other than the council could kickstart a redevelopment, thanks to the low borrowing costs from the Local Government Funding Agency.
Councillors in support of the deal were optimistic at the meeting yesterday that the 2027 opening date suggested by Reading could be a reality.
“I hear so many complaints about, what are you going to do about Courtenay Place?
How they voted on stopping the deal For: Nureddin Abdurahman, Diane Calvert, Ray Chung, Sarah Free, Iona Pannett, Tony Randle, Nicola Young. Against: mayor Tory Whanau, deputy mayor Laurie Foon John Apanowicz, Tim Brown, Rebecca Matthews, Ben McNulty, Teri O’Neill, Nīkau Wi Neera, Geordie Rogers.
By not going ahead with this deal, it kills it further,” said mayor Tory Whanau.
The area was getting worse each week, she said.
Nīkau Wi Neera joked that a time traveller from 2027 had visited him at breakfast and told him how fantastic the reopened complex was.
For him, it was an “outcomes decision” that came down to the fact that the city needed revitalisation.
“I think there has been a tragic loss of youth in our central city ... If you’re a 16year-old, looking for that first little fledgling flight out of the nest to go see a movie with your high school girlfriend. Just to take that first little step of independence, that doesn’t exist anymore.”
New information released yesterday outlined the terms of the deal, which included safeguards allowing the council to sell the land at the higher of market value or the $32 million purchase price after 10 years. Before that Reading would have the right of first refusal at the $32m sale price.
The payments would also be staged into two phases, with the council making a $6m deposit backed by a bank guarantee, before seeing design and construction details and paying Reading the further $32m.
John Apanowicz, who has an accounting background, described the deal as a straightforward land purchase and “a really little deal”.
He suggested that there were more deals “coming down the road” – in previous comments about Reading he has identified the Amora Hotel as another prominent abandoned site that he would like to see reinvigorated. “We can actually be a real enabler for this city.”
Iona Pannett, who brought the failed motion to stop the deal, said she was “obviously disappointed” and had wanted to win the vote. “In a way I consider it progress. Anything like this will have to be public in the future.” Council staff said there was a new policy in the works for how to handle commercial deals like this one.