Former Kāinga Ora boss Andrew McKenzie behind Parnell redevelopment for affordable housing

• Former Kāinga Ora head Andrew McKenzie is now a director at Global Optimisation Partners (GOP).
• GOP plans to buy and redevelop 160 terraced homes in Auckland into affordable apartments.
• Homeowners express concerns over low offers and potential displacement from the redevelopment.

The former head of the Government’s social housing agency has popped up as a private sector developer of affordable homes.

Weeks after stepping down as chief executive of Kāinga Ora in October last year, Andrew McKenzie became a director in a company trying to buy about 160 terraced homes in central Auckland and replace them with apartments.

McKenzie oversaw New Zealand’s largest housing construction programme at Kāinga Ora, but resigned after the Government announced a shake-up of the state housing agency after a report found the debt-laden organisation was facing annual deficits of $700 million.

Now McKenzie, also a former finance manager at Auckland Council and Fletcher Building, has teamed up with Bay of Plenty businessman Addison Curd as the two directors of Global Optimisation Partners (GOP). The company is negotiating to buy three townhouse complexes off The Strand in Parnell, known as Parnell Terraces, Dovedale and Cotesmore.

Former Kāinga Ora chief executive Andrew McKenzie.

Neither McKenzie nor Curd has responded to multiple messages from the Herald for comment, but the real estate agent handling the offers, Wayne Maguire, has.

He said the plan was to secure all the properties in the three complexes and build one apartment building combining the Cotesmore and Dovedale sites, and a second apartment building on the Parnell Terraces site. The plans were for affordable housing, he said.

Maguire said there were issues with the integrity of the floodplains along The Strand for homeowners, and it needed redevelopment – “it can’t stay as it is”.

One homeowner at Parnell Terraces said that GOP initially offered $100,000 for each property, and after a low uptake, offered $120,000 and then $150,000 in quick succession.

Many of the townhouses, built in the early 2000s, have been reclad after leaky building issues, were flooded in the 2023 Auckland Anniversary Weekend storms, and have plummeted in value.

Properties at the three complexes have council valuations of about $1 million, but have been selling for far less. One three-bedroom unit at Parnell Terraces with a CV of $970,000 is on the market for $139,000, and a three-bedroom property at Cotesmore with a $1m CV is priced at $275,000.

Townhouses in the complexes have been selling for a lot less than council valuations.

The terrace complexes are on former railway land owned by Ngāti Whātua Ōrākei.

Parnell Terraces homeowner Natalie Vincent, who bought her three-bedroom home off the plans in 2000 and has lived in it with her family since 2016, has no desire to sell after learning about GOP’s offer a month ago.

“We call it our shoebox. It’s tiny, but it has been full of fun and laughter, good friends and family, so we feel very sentimental about it.

“The idea of [a company] swooping in, putting us under pressure, because that’s what it is, it’s pressure to sell at a ridiculous price… so they can knock all the houses down and build something taller is simply driven by greed.

“People will be displaced. People will lose their security. It’s appalling,” Vincent said.

Parnell Terraces homeowner Natalie Vincent bought her three-bedroom home off the plans in 2000 and has lived in it with her family since 2016. Photo / Finn Little

Michael Rehm, chairman of Parnell Terraces’ body corporate, said GOP plans to purchase and bulldoze 81 houses and build something like a 12-storey apartment building.

“The thinking from our lawyers is if they get a majority, they will effectively take over the body corporate and gobble up the rest over time, and if they have to, they can go to court,” he said.

Rehm said homeowners have been through a lot, including legal action over leasehold ground rent and more than $3m in repair costs from the 2023 floods.

Global Optimisation Partners, whose directors are Andrew McKenzie (inset) and Addison Curd, want to put affordable housing in at the Parnell Terraces site.

Rehm said he paid $250,000 for his property, but the value has continually dropped after leaky building issues and repairs, a 2018 ground rent review, which took it to $16,000 a year, and another review this year.

Leaky building repairs cost about $450,000 per property, of which Rehm said he paid about $340,000 from his pocket, taking the total cost of his property to about $600,000.

“It’s a nightmare. But many people are looking at $150,000 being better than zero, and zero is a potential figure we are looking at when Plan Change 78 comes in [allowing greater intensification] and Ngāti Whātua jacks up our rents again. That’s why some people are oddly excited about the offer as a way out,” he said.

GOP has plans for a single apartment building on the site of the Cotesmore and Dovedale terrace house complexes.

David Russell is chairman of the Sudbury complex of terrace properties next to Cotesmore and Dovedale, for which GOP made an offer on each of the 32 properties that was later withdrawn.

He said two offers were made, the first for $150,000 and a second one for $250,000 as a deposit towards a property in a new building on the site.

“I don’t mind that they have pulled out,” said Russell, who believes there’s a bigger picture behind GOP’s plans not being shared with property owners.

The Cotesmore body corporate chairman Martin Newby declined to comment, and the Dovedale body corporate chairman Anthony Bahm said all he could say was that there are offers on the table and referred inquiries to GOP.

On Thursday this week, Auckland councillors voted to support Plan Change 78 changes for greater intensification in the central city. In the area of the townhouse complexes, the existing 20m height limit rises to between about 40m and 60m.

But while height limits have increased, new builds are still subject to “special height controls” from the Auckland War Memorial Museum volcanic viewshaft.

Grant Kemble, the chief executive of Ngāti Whātua’s commercial arm Whai Rawa, said it was aware of GOP’s interest in the terrace properties but had no relationship with it and was not party to discussions.

An artist's impression of the proposed Te Tōangaroa stadium. Image / Supplied

GOP played a role in Auckland Council’s project to decide the “Main Stadium” for the city, which led to the waterfront proposal losing out to Eden Park in March this year.

In a feasibility report for the waterfront stadium, Te Tōangaroa, dated February 4 this year, GOP was listed as managing the financial and commercial arrangements to deliver the project, including more than 2000 apartments.

A council-led review of the feasibility studies for Eden Park and Te Tōangaroa said GOP was “a newly formed company of little financial capacity and no track record with projects of this size and type”.

Maguire said the latest GOP plans had nothing to do with the waterfront stadium.

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