Hamilton City Council has secured three properties on the city's main street as part of its long-term vision to expand the central park and further open the city to the river.
The council has bought 254 Victoria St, tenanted by Mexico restaurant, 250 Victoria St, tenanted by Dough Bros and 246 Victoria St which is at the rear of the site.
The properties have a capital value of $2.0750 million and a estimated market valuation calculated by council last year of $2.586m.
The purchases are part of the council's plans to future-proof properties between the existing Victoria on the River central city park and the soon-to-be-built Waikato Regional Theatre.
Property investor Donald Fraser, who co-owned the properties with Peter Morton, confirmed he had sold them to the council for what he considered to be a "fair price".
The existing leases with the current tenants would be honoured, he said.
Fraser, who has owned the buildings for 30 years, said he had always wanted to sell them to council to because he shared its vision to open up the city to the river.
He would not say how much they sold for, but said he had a family trust which had reinvested in Frankton for a better return on investment.
Hamilton City Council declined to comment about the purchases because the chief executive was bound by a council resolution.
Earlier this year the council set aside $7m to buy buildings in the area in case it decided to continue with mayor Andrew King's vision of expanding it to a large park in a bid to better open the city to the Waikato River.
Council staff have wasted no time approaching property owners in the area and securing the first two.
Last year staff supplied council with an estimated market value of the properties, valuing 250 Victoria St (Dough Bros) at $825,000, 254 Victoria St (Mexico) at $1.33m and 246 Victoria St at $431,250.
250 Victoria St has a CV of $660,000, 254 Victoria St has a CV $1.07m and 246 Victoria St a CV of $345,00.
The council's initial plan was to put aside $12m to buy properties between Sky City and Embassy Park to demolish and build an extension of Victoria on the River, but it was dismissed following public consultation.
To fulfill King's vision to develop a grassed park setting between the two existing public spaces the council would need to buy 220 to 266 Victoria St.
Council instead voted in June to spend $7m on just buying some strategic properties in year one of the 10-year plan.
It gained the majority support of councillors with some commenting at the time they supported the plan because staff had told them there would be no rates impact on the proposal.
"The chief executive said the rental income would match or be better than the outgoings and interest costs," councillor Dave Macpherson said at a June meeting.
"The question is do we want to future-proof the central city area for the expansion of the central city park into that area or not."
Hamilton chief executive Richard Briggs told the Herald in December last year it was irrelevant who was given the heads up over the council's plans for the park as the council would only ever pay market valuation for a property.
"There's no advantage to anyone in knowing this because when council buys these properties we are going to pay valuation for them.
"I suggest any good businessman won't be paying over the odds for them anyway, but that's their call and anyone selling the properties will be selling them at market. The market is going to drive all this out."