New 'city' in Albany delayed by paperwork

A corporate deal enabling a $3.5 billion city to be built at Albany has been delayed.

Malaysian-owned Neil Group was due to get $250 million at the end of last month after entering an unconditional deal to sell a 50ha block of land behind the North Harbour Stadium to Rick Martin's Cornerstone Group.

But Neil Group managing director Dick White said the sale, due to go through last week, had been delayed slightly, mainly by the transfer of titles to the properties.

"That time has been put back. Settlement is as at March 31 but payable at the end of May," he said.

Martin has hired Rob Hutchison - a former valuer-general, former chief executive of North Shore City Council and former chief executive of waterfront landowner Viaduct Harbour Holdings - to head the project.

Hutchison said the deal would go through next month and Cornerstone was buying the company that owned the land, Neil International.

But the deal had been delayed by paperwork surrounding two subdivision consents on parts of the land. The subdivisions had been granted by North Shore City Council "but parts of it were subject to subdivision appeals and we wanted to get those tidied up. It's nothing fundamental or significant."

In January, Martin said the project would see 30-level office towers on Auckland's northern outskirts, 2000 apartments, housing for 6000 people and office space for 15,000 workers.

But Martin has also been at the centre of the leaky buildings controversy lately, after developing 41 units north of Auckland at Gulf Harbour's Oyster Cove. Owners are preparing to sue after discovering extensive leaks.

Hutchison said other developers would work on the Albany land to enable the project to go ahead.

"This is too big for one developer," he said. "It's building a city and it will take 10 years."

Hutchinson said the Wellington-based Strategic Group was acting as Cornerstone's broker on the deal and had brought Australian-listed funder Babcock & Brown in to help finance the deal.

Cornerstone would retain ownership of the land but, due to the amount of infrastructure and work, other developers would build there. Land would be leased perpetually on five- to seven-year rent reviews.

The trend for developers to lease rather than sell land under development was picking up.

Other leasehold deals include:

* Auckland's waterfront area - land owned by Viaduct Harbour Holdings but sub-leased short-term to apartment and office developers, which then sell those leasehold interests to the building owners.

* Former railway land in downtown Auckland, owned by Ngati Whatua but leased to developers.

* Princes Wharf on Auckland's waterfront, which includes a chain of leases: the seabed owned by the Crown; the under-wharf and deck structure owned by Ports of Auckland; the wharf and the Hilton Hotel leased to the hotel chain.

* Carter Holt Harvey's announcement early last month that it would sell 30,000ha of forestry land but separate the trees from the real estate.

* Tenon, the former Fletcher Challenge Forests, selling its estate last year to property investors Ross Green, Adrian Burr, Trevor Farmer and Mark Wyborn, most of whom are also involved with Viaduct Harbour.

The vision

* A 10-year plan for a new $3.5 billion city on Auckland's northern boundaries.

* High-rise offices for 15,000 workers, homes for 6000 people.

* Cornerstone wants to get other developers involved.

* It plans to buy the land next month, then lease it out in perpetuity.

* Strategic Group and Australia's Babcock & Brown are involved in funding.