City's sale of the century

By ANNE GIBSON

A new precinct of apartments, cafes, bars, restaurants, offices and shops could spring up around Auckland's derelict Britomart waterfront area with the imminent sale of land and historic buildings.

As part of the $200-million-plus Britomart project, Auckland City Council has put a cluster of historic waterfront buildings and land up for grabs, seeking expressions of interest from investors and developers.

The request for proposals to develop some of the most valuable real estate in New Zealand opened yesterday. The council wants ideas before December 18.

Already, consultancy services manager Peter Beckerleg has been flooded with inquiries about the land and buildings.

"Calls have come from New Zealand companies, some listed on the Stock Exchange, some not, but a lot of calls from private investors as well as some from overseas," he said.

But the properties, to be marketed in Hong Kong and Australia, come with a few riders.

Most date back to the late 19th and early 20th centuries, so have historic classifications, and cannot be significantly altered. (For much of the 19th century, this part of Auckland's waterfront was home to merchants and shipping agents whose businesses prospered because of their proximity to the city's port.)

Many of the buildings are in relatively poor shape and in need of careful and sensitive renovation. Some are also leasehold, though some are freehold.

Investors will not be able to bid for individual buildings - the properties are being sold in blocks. "We don't have individual titles to be able to offer the properties on a building-by-building basis," Beckerleg said.

The properties are in 10 blocks - five "external" blocks fronting the streets and five "internal" vacant blocks ready for development.

These last five blocks are surrounded by the historic buildings and directly above the Britomart train station. Developers can put up new buildings of between eight and 12 levels on them.

The council's finance and corporate development committee chairman, Doug Armstrong, is adamant about choosing the best proposals for the area.

"This is the front door to the city and it's got to be done properly. The city is making some financial sacrifice making sure that the whole development is done tastefully for the betterment of the city," he said.

So the council has definite ideas about how the area should be transformed and has stipulated that it wants "a rich use of activities, vibrancy on a 24-hour basis, upgrading and revitalisation of the area, a people-dominated and safe environment".

Just how much housing and how much commercial space this equates to is yet to be determined, although Labour councillor Richard Northey tried to force through a "mixed residential development" proposal at a council meeting on October 24.

He wanted the council to foster "the encouragement of creative industry, arts and cultural activities" on the land. He was defeated.

Instead, investors are being invited to achieve the delicate balance of serving commercial interests and fostering preservation, urban renewal growth and change for the city.

When the best ideas are presented, the council will initiate a plan change to ensure development fits its objectives and the above-ground master plan for Britomart.

An evaluation committee will select a shortlist of proposals by the end of January.

Developers and investors will then have until March 31 to prepare final, binding proposals. The properties will be sold by the end of June to coincide with the completion of the Britomart construction contract.

Aucklanders got a first-hand look at the Britomart development on October 20 when the gates were opened to allow people to walk through the new Downer Construction tunnel.

Auckland City's heritage manager, George Farrant, chose the best spot when he volunteered to talk to visitors at the Britomart open day.

As 14,000 visitors poured out of the impressive new underground tunnel, Farrant stationed himself at the end of the walk. He stood in the pit at the back of the newly cleaned Central Post Office, its Oamaru stone now returned to creamy white.

He wore an Auckland City volunteer badge introducing himself simply as "George". Most of the tunnel walkers would not know of his role as guardian to the city's heritage.

Farrant talked eloquently of his dream for the historic buildings and sites around the area to be converted into a vibrant, thriving heartland of shops, restaurants, apartments, cafes and offices, all within easy reach of other parts of Auckland by underground trains and above-ground buses.

Property developers and investors are excited about options for the buildings. But Beckerleg noted that members of the Property Council were giving little away when they met the city council team to discuss proposals for the area last month.

No questions were asked, Beckerleg noted, speculating that the investors did not want to let their competitors know of their dreams for the area.

The Property Council serves the interests of multi-million-dollar property investors and landlords such as AMP, Kiwi Income Property Trust, ING and Trans Tasman, which are expected to put forward ideas for the area.

So how much cash is the council expecting to get for the properties?

Valuer Telfer Young said in a report early last year that the value of 20 council-owned heritage buildings in the Britomart precinct had halved in less than two years, from $54.5 million in June 2000 to $26.7 million last year.

Admittedly, the difference took into account the sale of two buildings. But the council said at the time the fall was because of "the increased protection afforded heritage buildings, the vastly increased area consumed by the [Britomart] project's roading network and the reduced intensity of development".

Council staff close to the deal expect the land and buildings to sell for far more than last year's valuation, given the healthy state of the property market, demand for inner-city living and the intense interest in the area.

Britomart project