The Lakes subdivision in strife

The future of the Bay's biggest residential development is uncertain after The Lakes on the southwest outskirts of Tauranga went into receivership owing about $100 million.
Developer Grasshopper Farms, which started The Lakes in Pyes Pa west in 2005, has been hit by slow section sales and buyers pulling out after paying deposits in a sharp property downturn.
Four receivers from Auckland-based KordaMentha visited the 250-hectare site on Monday to understand the sheer size of the development, which has been used as a model for new urban design in the Western Bay.
One receiver, Grant Graham, said The Lakes was a development strategically important to the Bay, not just in size but in location.
"What we are trying to do now is get to the bottom of the issues including consents and compliance and then the options will be evaluated along with associated costs. We want to see it developed to its full potential."
Asked if the development would be on-sold as a whole or the unsold sections put on the market individually, Mr Graham said that was part of the evaluation.
"We will keep things moving along, but in what form I don't know that yet.
'The development is well established and well known and that's why it deserves appropriate consideration and understanding to fulfil its potential.
"I hope it goes from strength to strength, and when the sections come on the market there will be enough for everyone."
The Lakes, stretching from Route K roundabout along the Kopurererua Valley to Pyes Pa Rd at the crematorium, comprises 2100 sections and over 10 years would house about 6000 people.
The new suburb has parks, reserves, sculptural features, a 10km network of cycle/walkways, a 8ha man-made lake called Taurikura, and when completed the development would have an estimated value of at least $400 million. The area is already being well used by the public for walking, cycling, model boating, kayaking and dragon boat racing.
Grasshopper re-vegetated the hillside adjacent to the lake with 200,000 plants and retained 80 gum trees to maintain the herring colony.
A 3.5ha neighbourhood shopping centre, the size of Cherrywood and including a community centre, had not started.
Stage one of 370 sections was sold - most of them selling within the first 12 months of development - and Grasshopper was selling stage two of 250 sections, with prices ranging from $155,000 to $390,000 depending on size and location in the community.
It is understood only a third of the stage two sections had changed hands.
Grasshopper also spent money putting in the services for stage three, comprising 1480 sections, and it contributed $8 million to kickstart the NZ Transport Agency-managed Pyes Pa bypass, which will be completed in the middle of the year.
More than 100 houses have been built - some of them million-dollar homes - and the higher density town houses and Bridgewater retirement village, with its duplexes and villas, was well under way.
The first mortgagor Bank of Scotland International decided to call up its loan, estimated to be $80 million plus $20 million in late payment fees and interest.
The final straw, industry sources have said, was the default by a Chinese consortium which put down a deposit for up to 60 sections but failed to settle.
Grasshopper tried to on-sell the sections at a reduced price, but without success.
And the bank began making inquiries about the state of the property market in Tauranga before Christmas.
"Everyone is well aware that the market has been incredibly tough, all over the country," Mr Graham said. "It's not reflective on (The Lakes) development; there's no liquidity in the marketplace."
Grasshopper director Graeme Lee refused to discuss the receivership.