An Auckland iwi, Ngāi Tai ki Tāmaki, has agreed to buy the land under Macleans College in a $97-million deal that dwarfs any previous treaty-based school transfer.
The small iwi, which only 498 people said they belonged to in the 2013 Census, has decided to exercise a right to buy the land that was agreed under a Treaty of Waitangi settlement in 2015.
But the value of the prime site with uninterrupted sea views at Bucklands Beach has escalated more than seven-fold since the iwi and the Crown reached an agreement in principle on the settlement - from $16m to more than $120m.
The agreed sale price of $97m is based on a standard policy, used for all school properties transferred in treaty settlements, of first agreeing on a market value "based on highest and best use" of the site and then discounting it by 20 per cent because the land is locked into educational use.
A list provided by the Ministry of Education under the Official Information Act shows that 144 of New Zealand's 2114 state schools have been transferred or returned to iwi in treaty settlements since 1999 in transactions totalling $208m.
Macleans College, the country's fourth-biggest state school with 2647 students last July, will become by far the most valuable school transferred, at a price four times the previous record of $23.8m for Campbells Bay School which was bought by Te Kawerau ā Maki last year.
All the transactions return only the land underlying the schools to iwi. The Ministry of Education continues to lease the land, paying the iwi owners $13.5m a year in ground rentals last year, and owns the school buildings and other improvements.
The Ministry of Education has a perpetually renewable lease so the iwi cannot do anything else with the property unless the ministry gives up the lease.
The Macleans deal provides for a ground rent of 6 per cent of the purchase price, or about $6m a year.
Ngāi Tai ki Tāmaki chief executive Tama Potaka said the ministry would pay the rent and the ownership change would make "no real difference" to the school.
Clevedon School and Maraetai Beach School, which is close to the iwi's marae at Umupuia, were transferred to the iwi in 2018.
"What it does do is another added bonus reason for people to get NZ history into their curriculum like they should have done 40 years ago, Potaka said.
"It gives a school an added incentive if they know there is an iwi owner for the land."
The $97m price tag has forced the iwi to bring in six other iwi as partners through the Hāpai Commercial Property Limited Partnership, which was formed in 2019 on the initiative of Tokoroa-based Raukawa Iwi Development Ltd to spread the risks of iwi property investments.
Hāpai, managed by Christchurch-based Koau Capital, will own 80 per cent of the Macleans partnership. Ngāi Tai will own 20 per cent initially, with rights to buy out part or all of the Hāpai share over time.
The two parties will invest $37m in cash and borrow the remaining $60m.
An information package for iwi members who voted to support the deal on February 21 described it as a "passive investment" and said Hāpai was "ready to partner over many generations".
Macleans is a decile-9 school with a predominance of NZ-resident Asian students (49 per cent of its 2020 roll) and international students (12 per cent), plus 31 per cent European students and just 3 per cent Māori students.
Potaka said it was chosen simply because it was one of the Crown properties in Ngāi Tai's tribal area which the Government was willing to return to the iwi to compensate for the loss of almost all the iwi's traditional land in the nineteenth century.
"There was a number of properties in our area that we would have liked access to, but the Crown denied us access to those properties," he said.
"We chose a couple of schools. That enables the Crown to secure a bit of release of value and enables us to have good reliable long-term income."
Most iwi which have already acquired school land also treat them primarily as commercial investments, using the rental income to finance benefits for their people such as educational scholarships.
Greg Stebbing of the Tūwharetoa Settlement Trust which owns the land under all nine state schools in Taupō, said: "Apart from dealing with the ministry when there's a rent review, we don't really need to talk to the schools at all."
However, some iwi, including a Te Arawa hapū Te Roro o te Rangi on the east side of Rotorua, have formed deep relationships with the schools whose land they own, including seats on the schools' boards of trustees.
Richest 10 schools transferred to iwi so far
$23.8m: Campbells Bay School to Te Kawerau ā Maki, 2020
$21m: Hutt Valley High School to Tai Hekenga Limited Partnership, 2019
$15.9m: Wellington Girls' College to Tai Hekenga, 2019
$12.8m: Henderson Primary School to Te Kawerau ā Maki, 2020
$10.6m: Waterview School to Te Kawerau ā Maki, 2020
$10.4m: Matipo Rd School, Te Atatū, to Te Kawerau ā Maki, 2020
$10.1m: Te Aro School, Wellington, to Tai Hekenga, 2019
$8.4m: Waimea College, Waimea Intermediate and Henley School, Richmond, to Rangitāne Investments Ltd, 2014
$5.2m: Awatapu College, Palmerston North, to Rangitāne o Manawatū Investment Trust, 2019
$4.5m: Marlborough Girls' College and Bohally Intermediate, Blenheim, to Te Hoiere Asset Holdings, 2016
Source: Ministry of Education. Excludes Macleans College deal which is still in progress.