Auckland Council looking to sell carpark buildings to pay for City Rail Link blowout

Auckland's Downtown Carpark with 2088 parks was valued in 2016 at $95.2m. Photo / Greg Bowker

Auckland Council is looking to sell or lease its four carpark buildings to help pay its share of the $1 billion blowout in the cost of the city rail loop.

But the Automobile Association is warning of potential price hikes for commuter parking if the parking buildings fall into private hands.

Mayor Phil Goff has pledged to fund the council's $500 million share of the extra cost without raising rates or breaching the council's debt limit - partly by selling or leasing the 4500 carparks in the four inner-city parking buildings.

He said they could raise $100m. But on April 4 SkyCity sold a 30-year concession to operate its 3200 central Auckland carparks until 2048 for $220m, suggesting that 4500 carparks might be worth around $300m.

About half the council's carparks (2088) are in the Downtown building near the waterfront. The others are in the Civic carpark under Aotea Square (1015), Victoria St (888) and Fanshawe St (497).

The four buildings had a book value in 2016 of $224m.

Goff said about $50m from the carpark sale would be earmarked for expanding park and ride facilities serving the rail network and main bus routes.

"We are looking at the sale or concession of some of our non-core commercial assets such as some of our carparks for around $100m, of which half of that we would invest in car park-and-rides," he said.

"Council officers are looking at four carpark buildings in Central Auckland - Fanshawe St, Victoria St, Downtown, and the Civic carpark, where we might be doing what SkyCity has done and letting out a concession for maybe 30 years."

He agreed that selling the parking buildings would reduce future council revenue, but he said it was worth doing to get the money up-front to fund the rail link.

Auckland Transport, the council-controlled entity that operates the carparks, raised its daily charges at the Downtown carpark by 67 per cent in January on the basis that the carpark was "frequently full".

Property Council Auckland president Michael Holloway said last year that "unsolicited offers" had been made to the council for the parking buildings, which could be redeveloped for more valuable uses.

Automobile Association spokesman Barney Irvine warned that selling the four council parking buildings could lead to more price hikes.

"Aucklanders will be pretty happy to see the council making better use of its assets, but we wouldn't want a situation where we have private parking companies having total control of off-street parking in the central business district, particularly if it's a case of just one private operator - a monopoly," he said.

"That is a recipe for price hikes. If it goes to any private operator, you automatically have a risk of price hikes. That is even more accentuated where it is just one company doing it.

"If that is the case, I'd want to see a tender process that provides for as much competition as possible."

SkyCity's carpark concession was won by Australian parking operator Care Park, on behalf of Macquarie Principal Finance. Care Park operates a carpark in Newmarket, but is currently well behind the Auckland market leader, Wilson Parking.

Goff said the proposal to sell or lease the carparks was part of a five-point plan suggested by council officials after the council was notified of the $1 billion increase in the cost of the city rail link on Friday night.

The other four proposals are:

• Renegotiating council debt to take advantage of falling interest rates, which could save $120m "probably for at least a 10-year period".

• Revaluing under-valued assets and over-valued liabilities, such as future bus contracts, to reduce the council's stated net debt, helping it to keep within a cap set last year of group debt being less than 270 per cent of group revenue.

• Halving the council's cash holdings from about $200m to $100m.

• Asking the Government to pay more of its half-share of the rail loop costs earlier in the construction period, allowing the council to pay more of its share towards the end of the period around 2024, by which time net debt will be falling because of higher depreciation allowances for assets built by then.

All proposals were considered by a workshop todayto which all councillors were invited, but they have yet to be formally approved by the full council.