City weighs up billion dollar asset sale plan

A Britomart deal between the council and developer Cooper and Company could be only months away. Photo / File

Britomart, airport shares and artworks under review.

Auckland Council is reviewing its ownership of the Britomart precinct alongside an asset sales programme canvassing everything from airport shares to the city's art treasures.

Council chief executive Stephen Town said there was no "hocking-off strategy", but will not pre-empt a review of council assets by two private advisory firms.

Last week's revelation by the Weekend Herald that golf course land could be sold to ease the city's chronic housing shortage has been followed by other potential asset sales.

The Weekend Herald has learned the council is preparing to sell the freehold title to Britomart and had received approaches to buy the council headquarters in Albert St, which cost $130 million to buy and fit out.

Mr Town said the advisory firms might raise privatising the city's water and wastewater assets, but doubted if there was a political appetite to go down that path.

As well as the council's airport shares, valued at $1.4 billion, the review is considering the council's 100 per cent stakes in Ports of Auckland, valued at $1.079 billion last year, and $2 billion of Vector power shares not due to be handed to the council for 58 years.

Asked if the review would look at the city's artworks and manuscripts, which include the first collected edition of Shakespeare's plays valued at more than $6 million, Mr Town said: "Who knows?"

The idea, he said, was for the advisory firms to interpret the terms of reference as broadly as they can and provide factual, free and frank advice to Mayor Len Brown and councillors in November.

Mr Brown, who has campaigned on a promise not to sell strategic assets, has an open mind about the review but made it clear he will not lead any debate on the sale of port or airport shares.

The council's airport shares are valued at $1.4 billion. Photo / File

Planner and former Auckland Regional councillor Dr Joel Cayford said there appeared to be a mad rush to sell assets.

"The rhetoric is to make Auckland the most liveable city, but the actions are the opposite to that and won't deliver that vision," he said.

The asset review comes as the council looks to free up capital and find new revenue sources to stimulate development in housing and transport. It follows an ambitious asset disposal target of $600 million in the new 10-year budget.

Mr Town said the council was in a superb financial position with an AA credit rating, but faced growth pressures.

Asked about the council's ability to fund infrastructure for special housing areas, Mr Town said: "We are okay for the next three years but okay is not a permanent and long-term strategy if growth keeps going at the current rate."

The freehold sale of Britomart is outside the council review of assets, but indicative of a strategy to take cash out of successful public-private developments and invest the money elsewhere.

The Weekend Herald understands that a Britomart deal between the council and developer Cooper and Company is only months away.

The deal involves a complex set of negotiations and valuations, including the council's right to a 50 per cent stake in the Britomart carpark and compensation to the developer for emptying out workers from the Central Post Office during construction of the City Rail Link.

Cooper and Company chief executive Matthew Cockram said freeholding the site would be a positive for the company and provide certainty of ownership.

Councillor Chris Darby has reservations about freeholding Britomart.

"What is the future need of the council and Aucklanders in that area that we are at risk of being shut out of if we don't have control," he said.

Mr Darby said the council should be focusing on new alternative financing systems being developed by markets with huge sums of money to invest around the world.

He said he had heard of an American pension fund offering one such system to buy the council's new headquarters in Albert St for significantly more than its current value in return for a high-yield, long-term lease.