Sold - for a loss

By Carmen Hall


ACC has sold the Fashion Island retail hub in Papamoa for less than the $15.6 million it paid in February 2007, saying it has been "disappointed" with the way the complex has performed.

But two key details of the deal remain secret with the Crown organisation refusing to say how much the centre was sold for and who bought it.

The sale comes nine months after this paper reported the beachside suburb had been predicted to outstrip all of Tauranga City by 50 per cent by 2028 and business leaders said it was posed for a commercial development boom.

ACC senior media adviser Stephanie Melville said in a written statement the organisation had "been disappointed with the operational performance of the asset and with the returns we have achieved ... it resulted in a capital loss".

She confirmed the sale was settled on March 31 and the centre sold for less than what ACC paid but refused to name the buyer or sale price, citing confidentiality.

ACC sold Fashion Island because "the intensive management requirement was not consistent with our property strategy".

The investment represented a small portion of ACC's $33 billion investment portfolio and "our experience with this investment has informed how we would evaluate similar investments in the future".

Fashion Island opened on May 17, 2006, to much fanfare and had 20 retailers, including Hallensteins, Glassons, Hannahs Shoes, Overland Footwear, Meccano Men's Clothing, Colorado, Nevada Denim Surf-Skate, BB's Espresso, and Sounds Music store - all of whom were no longer there. Papamoa Plaza was undergoing a multimillion-dollar revamp and manager David Hill told the Bay of Plenty Times Weekend this week the sale of Fashion Island was "fantastic" news for the suburb.

"It looks like some professional shopping centre owners have bought the place and they will bring added emphasis into a quality offer that will complement what is going on at the plaza. So we are really excited."

The plaza was one-third of the way through its $20 million redevelopment. It was anticipated it would open a new food court and bring in another 15 retailers by October 25, he said. "That is the day we are targeting and it's really exciting ... if Fashion Island comes and gets started and upgrades there as well then the whole of Papamoa will be sparkling by Christmas time."

Mount Maunganui/Papamoa Ward councillor Steve Morris said he hoped the new owners would approach their acquisition with the same enthusiasm demonstrated at Papamoa Plaza because "that is something the community is really proud of".

He said in his opinion Fashion Island was a "poorly designed space".

"You have a 12-metre roadway and carparks either side. It's quite far apart and you don't have that village feel at present around Fashion Island ... I just hope someone is able to take it and run with it and improve it as it needs a bit of help and vision."

Mount Maunganui resident Jocelyn Reynolds said in her opinion Fashion Island was "soulless" and had "no atmosphere". She made her comments while visiting on Friday and said it was "just a big street of shops and could have an outdoor place for kids and be more family friendly, it's a shame".

Papamoa resident Karen Odwyer said she did not know it had sold but said it could possibly do with a revamp. "I like it because it's convenient and it's got a few shops I like to go to but it's really for women, isn't it?"

Fashion Island businesses approached for comment declined. ACC Minister Nikki Kaye said she was not involved in ACC investment decisions.

- Bay of Plenty Times

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