Investor in heritage battle expects $6.5m after-sale loss

Stuart Galloway. Photo / Dean Purcell

An Auckland property investor whose companies own buildings at the centre of an Environment Court heritage battle say he faces a $6.5 million loss - if he can quit his real estate.

Stuart Galloway, who owns buildings in the block bounded by Albert, Federal, Wolfe and Fanshawe Sts, yesterday told the court headed by Justice Craig Thompson that even if he got $16 million for the Yates Building and Link House, he still stood to make a huge loss.

"So after seven years of significant effort and costs, the best outcome that I can achieve is a loss in excess of $6.5 million," he said.

He said the two buildings had already cost him $22.39 million.

Holding costs were $8.47 million on Yates at 13 Albert St and $1.12 million on Link House, he said. Yates was bought for $11.2 million and Link for $1.6 million, he said.

"If the Yates buildings are scheduled, I stand to lose significantly more money than I already have and I doubt that I could even sell the properties," he told the court.

Mr Galloway, represented by Sue Simons, is fighting the Auckland Council and the Auckland Society for Amenity Protection, both of which want to schedule three buildings the highest heritage category A which would prevent major demolition or alteration.

Mr Galloway has been trying for some years to sell the properties without historic classifications so the entire street block, except the West Plaza Tower, could be redeveloped and a tower put up.

A 300-room international hotel is planned for the site where once a scheme for a tower of above 60 levels was planned.

Mr Galloway said the buildings in the block were extremely run down.

"One of the reasons I wanted the buildings demolished was because even in 2005 the buildings were unsanitary and subject to vandalism and were becoming increasingly unsightly," he said.

Before the Rugby World Cup, the Auckland Council painted the buildings after neighbourhood protests over graffiti.

Mr Galloway said that in 2005, the council proposed to schedule Yates a Category B building, "without consulting the owners".

Architect Duncan Dempsey said the old buildings had been altered significantly.

The Yates' facade had been changed, a verandah added, a roof erected above the facade, a new shop front built and windows removed and replaced with window spandrels, he said.

"The comprehensive redevelopment proposal is for ... construction of a 65-level tower structure that will incorporate a 300-room international hotel with appropriate amenities and street-level retail boutiques, galleries, cafes and restaurants ... [which] will contribute to a vibrant precinct and premium office accommodation above the hotel from level 25 upwards,"Mr Dempsey said.