Auckland's $20m bill for lost carparks

Proceeds from the sale of Queen Elizabeth Square are earmarked for the development of several waterfront areas.

Revelation overshadows city council’s big harbour-transformation announcement.

Auckland Council may have to pay Precinct Properties $20 million compensation for the loss of underground carparking in its Downtown Shopping Centre redevelopment to make way for the city rail link, says a planner.

The revelation comes as the council is today set to conclude the privatisation of Queen Elizabeth Square to Precinct Properties for a giant mall and skyscraper.

The square is valued at about $60 million. The proceeds are earmarked for at least two of three improved waterfront spaces forming part of an ambitious wishlist of 16 projects for the downtown area.

Last month, the Herald revealed ratepayers face a $40 million bill to repair the downtown seawall and yesterday it emerged that tens of millions of dollars could be spent extending wharves for cruise ships.

These issues are part of a new 10-year budget, which includes $7.5 billion of proposed cuts in capital spending and running costs, including less money for parks, swimming pools and libraries.

Planner Dr Joel Cayford said the compensation to Precinct is because the former Auckland City Council pushed through a non-notified resource consent for 471 basement carparks on the site in 2008 without considering the rail link.

What's more, he told the Herald, in 2011 the Auckland Council extended the original consent by Westfield when there was a lot of information known about the rail project.

There were many good reasons for not granting an extension, he said, but the final decision ran to less than one page and was signed off in minutes.

The result was that when Precinct purchased the shopping centre from Westfield in 2012 it was entitled to compensation, he said.

Dr Cayford said compensation of $20 million was a sizeable chunk of the proceeds from the square's sale.

Last night, a council spokesman said any compensation arrangement with Precinct was being addressed by Auckland Transport and the council's property arm, Auckland Council Properties Ltd.

He said the "compensation" component for the land taken for the tunnels was one factor within wider commercial arrangements currently being negotiated within the Precinct development.