LAWRENCE GULLERY
A Christchurch developer is selling the 96 units it owns at Te Pania Hotel to pay off "retired debt" it owes on some of its other projects.
Robert Brown Developments, which built Te Pania Hotel in 2002, has engaged property company Colliers International to sell the units by tender
before February next year.
The $22-million hotel, managed by Scenic Circle, has 114 units in total: 96 owned by the developer and the rest by independent owners, some from Hawke's Bay.
Developer Robert Brown said the sale of the units will be used for "retired debt" but did not want to elaborate further.
He said his company had its investment in Te Pania Hotel for "too long now" and it was time to move on.
Scenic Circle would continue to manage the hotel until 2012, when it will have the opportunity to renew its 10-year lease for another 20 years.
"Scenic Circle have done quite a good job managing the hotel and it is performing well today," Mr Brown said. "It didn't perform well at the beginning but it is trading a lot better now," he said.
Mr Brown said the sale of the units would end the company's involvement with Te Pania Hotel and with Hawke's Bay.
He said he had no plans to develop other sites in the region, although in 2003 Robert Brown Development had planned a megastore on Napier City Council-owned land in Tamatea Drive.
"We couldn't get the zoning for the plan ... but that option still exists," he said.
Scenic Circle Te Pania Hotel manager Kym Fell said he believed the developer had become "over committed" with other projects, which had led to the sale of the units. "This hotel is doing very well financially and has high occupancy," Mr Fell said.
Scenic Circle managing director Brendan Taylor said it was the developer, not the hotel, which had the financial problems.
He believed the four-star international hotel was a drawcard for tourism in Napier.
"If you look over growth statistics in tourism in Hawke's Bay for the last three years, a lot of that is attributed to the hotel and the new businesses its brought into the area," he said.
Mr Taylor said Scenic Circle had used business contacts from its network of hotels and 10 sites around New Zealand to influence new visitors to Hawke's Bay.
