Fonterra paid $4 million for four hectares of industrial-zoned land at Horotiu, north of Hamilton, to bolster its objection to a big housing development plan.
The dairy cooperative bought the land, comprising three adjoining blocks neighbouring its Te Rapa factory late in 2017, during the financial year for which it posted an historic first net annual loss of $196m.
Latest rating valuations for the blocks, as at September 1 2018, are for $700,000, $720,000 and $720,000 respectively, a total of $2.1m.
• Premium - Andrea Fox: Fonterra has a bigger problem than red ink
• Andrea Fox: New chairman - same old Fonterra song
• Premium - Andrea Fox: Transparency missing in Fonterra director elections again
• Premium - Commercial 'disaster': Can it get any worse for Fonterra?
Fonterra said it paid $4m for 40, 50 and 58 Hutchinson Rd land to "future proof" its Te Rapa operations.
"The land was purchased to enable us to have a say in a proposed residential development, classed as a special housing project. Under special housing regulations, we would need to be an immediate neighbour to be confident that we could provide feedback into these plans."
The housing development is called Te Awa Lakes and is planned by Waikato's Perry Group.
The family-owned company's bid to fast-track its $1 billion housing and recreation project, which included 400 affordable homes, as a Special Housing Area has since been rejected by the Government.
Fonterra formally objected to the application.
Perry has now reverted to its original plan, first lodged with the Hamilton City Council in July 2017, to apply for a private plan change to allow its land, a former quarry north of the Fonterra Te Rapa site and bordering the Waikato River, to be rezoned from industrial.
Perry chief executive Richard Coventry said Perry had been negotiating a private sale in 2017 to secure the blocks for a proposed buffer zone between Te Awa Lakes and the Fonterra site.
Perry had been negotiating around the market value of the land at the time, which was between $1.6m and $2.8m, he said. It had been talking to Fonterra as part of its planning for the buffer zone.
Curiously, the $4m including GST Fonterra says it paid for the three blocks does not tally with official property records, which state the farmer-owned cooperative paid $5,058,625.
The original record of the sale price is held by Hamilton City Council, which says the figure was supplied by a law firm for the transaction.
It is from this council record that property data specialist CoreLogic has taken its public information about the sale for its website Property Guru.
In response to Herald inquiries, Fonterra produced a letter from its law firm Russell McVeagh, written this week, stating the sale price was $4m including GST.
Hamilton City Council told the Herald that on Thursday it had been contacted by lawyers for both the seller and Fonterra that the $5m-plus figure supplied to the council was "incorrect" and the record should be changed.
As for challenging Perry Group for the land, Fonterra in a statement said "it's a real shame we had to take these measures to engage but it's important we fit comfortably into the communities we operate in.
"Our Te Rapa site is a 24/7 operation and we feel strongly that having residential properties so close would be disruptive to residents not used to living next to an all-hours operation.
"We received independent advice on this purchase, which was a private sale and involved another interested party.
"The property is currently rented out, but we are open to discussions for this land, provided it won't be used for activities that have the potential to either adversely affect local residents or the operational hours of our Te Rapa factory."
CoreLogic's head of research Nick Goodall said the value of 40 Hutchinson Rd was currently estimated at $771,000.
The block, which last year had a rating land value of $425,000 and an improvements value of $275,000, has a 1980s two-bedroom house on it.
The other two blocks are bare land.
Fonterra, New Zealand's largest company, recently declared a net loss of $605m for the 2019 financial year.
Independent commissioners will begin hearing Perry Group's application for a plan change to develop the 85ha Te Awa Lakes project on November 25.
The Perry plan is for a "live-work-play" community to be the northern gateway to Hamilton. On land between the Waikato River and the Waikato Expressway with bisecting natural waterways, the five-stage development would incorporate 1.5km of river edge housing, areas of medium- and high-density housing, an adventure park, village centre, commercial accommodation and tourism outlets.
Later stages would incorporate a retirement village and neighbourhood centre.
Part of the development would be in Waikato District Council territory. The council is currently changing its district plan to support more residential to integrated industrial and commercial nodes, adjacent to the river, including at Horotiu.
Te Awa Lakes would be in the north Hamilton growth node for the Government's Hamilton-to-Auckland growth corridor initiative and could be the first mixed-use community to leverage the area's emerging rail, expressway, Waikato River and river cycleway network.
Meat processor Affco and the country's second largest dairy processor Open Country have processing sites on the other side of the river at Horotiu, and along with Fonterra, have objected to a zone change to allow for housing.