Dita De Boni 's Opinion

Business columnist, with a political twist, for NZ Herald

Dita De Boni: The deal's off, but at what cost?

14 comments

Maybe, just maybe, carpark sale could have been made a winner for everyone.

The council is staunch for now but what about in five years time?
The council is staunch for now but what about in five years time?

When the Auckland Council comes out with this decision or that, you tend to think with the amount of professional advice it receives, it has to know what it's talking about.

When it says property owners must cut their own verges, you think "oh well, our rates pay for less and less, so what's one more 15 minute job?" When it says its inner city rail loop will cost $2.86 billion and not a cent more, you say to yourself "that's probably bollocks, but hopefully the next left-wing government - whenever that eventuates - won't mind making up the shortfall".

And maybe the council knew what it was doing this week when it refunded two fairly high profile entrepreneurs, Simon Rowntree and James Brown, the $7.5 million deposit cheque they wrote by way of an offer for its 1900-space Downtown Carpark, saying it wasn't for sale (yet, was the implication).

The offer valued the property at $75 million, at least $15 million less than many observers believe it could be worth.

Rowntree and Brown, aka Tournament Parking, claim the deal would have allowed the Council to retain ownership of Queen Elizabeth Square (which it is currently looking to flog off in a dubious manner) and keep rate rises at bay for Aucklanders, at least for a while.

This could be spin. It would have been a spectacular deal for the two canny investors, and a boon for their company, which is moving further into prime commercial redevelopment. Even though it pledged reasonably-priced parking and public access to surrounding streets, it's hard to imagine the building would not have become another glass skyscraper with prime waterfront views.

There are two other reasons to retain a healthy scepticism about Tournament's bleeding heart.

First, the fact that about a year ago it sold a swathe of carparking assets to what must be the most reviled parking company in New Zealand history, Wilson Parking. And second, that the Tournament name is the one that continues to come up whenever people complain about car clamping and eye-watering inner-city parking costs.

But then again ... even if you are someone who does not believe in selling public assets, like me, there are reasons to suspect that Tournament Parking just might have done something really awesome with that area of downtown Auckland - something the council is going to struggle to do in the coming years, given that it is so committed to other high-cost projects.

Tournament has already successfully transformed the City Works Depot. With the right caveats - some public access and use in perpetuity, perhaps some more added to the purchase price - could the council have achieved a similar transformation for the carpark from the tried-and-true developers?

The council is staunch for now, but what about in five years time, when the government has successfully shoved every last spending responsibility on to the Auckland ratepayer and the council is on its knees?

No doubt then the carpark will be on the chopping block at a discounted price and no onerous conditions attached, with a 20-year rate freeze kicked in for good measure, in the typical arse-about-tit Kiwi way.

- NZ Herald

Dita De Boni

Business columnist, with a political twist, for NZ Herald

Dita De Boni is a columnist, commentator and TV producer/journalist. She first wrote columns for the NZ Herald in 1995, moving to daily business news in 1999 for four years, and then to TVNZ in Business, News and Current Affairs. After tiring of the parenting/blogging beat for the Herald Online she moved back to her first love, business (with a politics chaser), writing a column for Friday Business since 2012.

Read more by Dita De Boni

Have your say

We aim to have healthy debate. But we won't publish comments that abuse others. View commenting guidelines.

1200 characters left

Sort by
  • Oldest

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_a4 at 22 Sep 2014 19:34:35 Processing Time: 900ms