An Auckland building project on land being sold by Auckland Council will give a $500 million boost to the wider economy, says the developer.
In September when the four-building project on land between Mayoral Dr, Greys Ave and Aotea Square was originally announced, developer John Love of Love & Co put the value at $200m to $300m.
"Those numbers were our actual spend at that time," Love said this week. "But then we went away and talked to some people about the flow-on value into the economy and jobs in hospitality, apartments," he said.
"The early estimates is that the project could add up to $500 million into the economy. When you spend a dollar, it has a flow-on effect. The $500 million is the estimate of the overall economic benefit of the project."
Construction work is planned to start this winter.
Love cannot say how much is being paid for the public land alongside the square and an iconic office block: the Civic Administration Building and undeveloped land now used for about 50 car parks around its base.
The four-building project is:
* A $56m refurbishment of the existing ex-council civic building into 100-104 apartments, top-level penthouse marketed at $14m, cafes and retail on the ground level.
* A $20m four-level whare tapere or entertainment/performing arts/gallery planned on vacant land between the civic building and the Auckland Town Hall.
* A 150-unit $150m apartment block on vacant carpark at 1 Greys Ave (Mayoral Dr/Greys Ave corner) above Civic Carpark entrance.
* A 147-room $60m seven-level hotel behind the civic building on a sloping site off Mayoral Dr.
Love said carparking for about 300 vehicles is planned under the site, allocated across the entire four-building project.
Confidentiality surrounds the deal between Love & Co and the council, Love said, telling how the company he owned with wife Josephine had won the tender to buy the land where 55 parties indicated an interest and three companies were shortlisted.
"We've entered an unconditional agreement to buy 5300sq m to settle in June or July this year," Love said explaining how the development would enliven and activate an area now mainly used for carparking.
Love & Co had letters of support for loans from Westpac, ASB and ANZ and planned to borrow more than $100m.
Love is confident the first step - redeveloping the civic building now renamed The CAB - will go ahead despite issues with other Auckland apartment projects not proceeding.
"We don't have a problem with funding issues as long as we hit our pre-sale target to take deposits on 70 per cent of the apartments within six months," he said.
New Zealanders will need to pay 10 per cent deposits and non-New Zealand residents or foreigners 20 per cent due to bank lending restrictions, he said.
Around $150,000 has already been spent creating an apartment display suite on the ground level of the civic building, with large hanging pot plants, American oak flooring, granite kitchen bench top and large-format posters of views and how the apartments are planned to look.
Love said he is a chartered accountant formerly of KPMG so he had financial as well as development expertise, working with his father-in-law Tawera Group's Mike Mahoney.
Love, in his late 30s, is formerly of apartment development specialist Tarwera and said the civic project would transform a dull, lifeless end of the Aotea precinct.
Naylor Love will refurbish the civic building, starting in either June or July, stripping it back to its structure, then re-cladding it and developing 100 to 104 apartments selling from $600,000 to $14m, he said.
"We're planning to spend about $3000 to $4000 a square metre," Love said of the protected 14,000sq m civic block, owned and formerly occupied by the council.