Backers wanted for $100m Orewa tower

By ANNE GIBSON

Orewa developer Rick Martin wants $15 million from the public so he can buy land at Orewa for a $100 million 37-level apartment tower that does not have planning permission.

His aim is to transform the Hibiscus Coast into the Gold Coast.

Martin, of Cornerstone Group, is about to begin building his $65 million 12-level Nautilus apartment block, a widely promoted Orewa project with 150 units.

He has pre-sold about 100 Nautilus apartments through a high-profile advertising campaign, allowing him to begin clearing the site ready for building to start this month.

Now he wants to do the same 300m away, but on a grander scale.

Yesterday, Martin announced that he was planning another Gold Coast-style tower, to be called Everest at Hillary Square, in Orewa's town centre.

He is asking the public for minimum deposits of $5000 by March, promising to pay 11.7 per cent annually before tax. He will keep the money for three years, perhaps four, depending on how the project goes.

After a visit to Surfers Paradise, Martin decided building tall towers was better for neighbourhoods than building sprawling units. So he wants to break Orewa's 10-level height restrictions and hopes to apply for resource consent next year.

But Tower Trust general manager Glenn Clark raises questions about the risks involved in the Everest share issue. As trustee for out-of-pocket Metropolis junk bond holders, Clark is concerned that the preference shares will rank behind any first mortgage on the development.

Metropolis developer Andrew Krukziener is yet to pay about $24 million back to investors who helped to fund his 40-level central Auckland tower.

Martin hopes to borrow about $65 million and ANZ Bank is his preferred source of funds.

He agreed that people might wrongly associate Everest with Metropolis.

"But the Metropolis junk bond issue was for debt and this issue is for equity. The risks for investors are that we don't get resource consent for the tower or we don't make enough pre-sales. But we won't take a cent out of this project in management fees or directors' fees until we get resource consent. We pay our bills," Martin said.

If he fails to get resource consent, Martin will instead build three 10-level blocks and pay the $15 million back to investors.

The shares, to be issued by Hillary Square Orewa, cannot be traded on the sharemarket and people will not be able to get out of their investment before 2005 or 2006, depending on the success of the building.

The 8000sq m Everest site is bounded by Florence Ave and George Lowe Place. A Bayleys Real Estate office, travel agency, Automobile Association and Hammer Hardware operate from the site. Martin said six owners had agreed to sell the block for $12.7 million.

He said Cornerstone was an Auckland developer involved with 20 building projects since 1991, bringing to the market 688 commercial, industrial and residential units worth more than $160 million.

Construction on Everest is due to begin in May 2004.

Martin also wants to transform Orewa by doubling the size of Hillary Square and changing it from a car park into a pedestrian mall.

Corner Stone Group

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