Probe into civil servant's $1.6m land buy

By JAMES GARDINER

A Government employee who prepared a block of prime Crown-owned land in central Auckland for sale has emerged as the only buyer - at a price nearly $1 million below the $2.5 million the land was valued at two years ago.

No one else was given the opportunity to bid for the property, which could realise $11 million to $13 million from 22 multi-storey townhouses being marketed by the civil servant's private company.

The Institute of Environmental Science and Research (ESR) is refusing to discuss what occurred, but Crown Research Institutes Minister Pete Hodgson, who approved the sale in October 2000, has had an apparent change of mind, and this week ordered officials to review the file.

The ESR's acting chief executive, Tom Robinson, said there was nothing wrong with the sale process legally or commercially, but took exception to Weekend Herald questions about the involvement of its former chief financial officer, Neil Wanden, and refused to say more.

Mr Robinson would not even say whether Mr Wanden had been an employee - although that is not in dispute. Mr Wanden held his senior role from about 1992 until 2000, when he suddenly resigned after arranging for the air-quality business to be broken up, partly privatised and for remaining staff to be made redundant or moved to another site.

He now works as Courts Department general manager corporate services.

Mr Wanden, of Wellington, and his wife Heather-Anne, are the sole owners of a company called Glenstone, which has a conditional sale and purchase agreement with the ESR to buy 17 Kelly St, Mt Eden, a 4558sq m property that was once Auckland's dental nurse training school, and later the Health Department, then ESR's air-quality science laboratory.

A spokesman for Mr Hodgson said he had received advice from officials on the matter "but he doesn't feel he's got enough yet to form a view on it or to comment on it."

But in letters to Auckland woman Rae Wilkin over the past two months, Mr Hodgson said he was satisfied the ESR board had acted in the best interests of the company and met statutory requirements.

"I understand the board received legal advice and followed due process in relation to the disposal of the property to a company owned by a former employee of ESR." It had not been under any obligation to advertise the sale of the property.

Ms Wilkin is one of dozens of local residents concerned about Glenstone's plans for the site, and the process that saw it emerge as buyer when others who expressed interest were ignored.

Several scientists who worked for the ESR air-quality unit before it was broken up and partly sold off to Watercare Services under Mr Wanden's supervision expressed astonishment that Mr Wanden was now trying to buy the property.

Along with Dr Craig Stevenson, who is still an ESR scientist, they questioned the ethics of someone so intimately involved in the ESR business now being allowed to buy land without a competitive tender.

When Glenstone applied to the Auckland City Council in October to build 25 townhouses on the site, there were 135 submissions, mostly from neighbours, all but one opposed. That was before the residents learned the site was contaminated with mercury from the dental school.

In December, the ESR applied for council consent to remediate the contaminated site by removing 5800 cubic metres of soil. Hearings on the Glenstone application were planned and commissioners appointed, but in February Glenstone lodged a second application - a new plan for 22 townhouses, which could be granted without public notification.

Before it refused to answer further questions from the Weekend Herald, the ESR said four other parties had expressed interest in the site, although it did not identify them.

Ficino School board chairman David Farrelly said the private primary school was "very interested" in buying the property to set up a secondary equivalent, but despite a face-to-face meeting and sending in a formal proposal, "we never heard a dickiebird back".

Documents obtained under the Official Information Act show Mr Wanden was involved in getting the land cleared from Maori claims and obligations to offer it back to original owners under the Public Works Act and that he was aware it had a valuation in March 2000 of $2.475 million.

The ESR has refused to say who commissioned that valuation, who performed it or what it cost. It will not discuss the sale price or the conditions, but information released late yesterday by Mr Hodgson's office showed Glenstone had offered in July last year to pay $1.61 million plus $40,000 towards remediation costs - exactly the same amount as the $1.65 million three independent valuations indicated was the market value at the time.

The ESR responded to initial questions, and business development manager Jeremy Wah said the Glenstone offer was significantly more than the $1.1 million Government valuation.

Companies Office records show Mr Wah and Mr Wanden are the directors and part-owners of Eclat Holdings Ltd.

When Mr Wah was asked what the nature of that business was and whether it was appropriate for him to be commenting on the Glenstone situation, the next response came from Mr Robinson, who said he was very concerned at any suggestion of "some form of impropriety in the sales process". He said if anyone suggested process had not been followed or that any member of ESR staff had acted inappropriately it would be "taken very seriously".

It is understood the sale is conditional on consents being gained for the housing development and the excavation of contaminated soil.

The cost of that is another question the ESR refused to answer, but it now appears it will be considerably more than Glenstone's $40,000 share. Dumping charges alone for the contaminated soil could be $170,000.

The extent of excavation planned for the development and how much of that is required to clear the contaminated soil is not clear.

Additional reporting: Mathew Dearnaley

james_gardiner@nzherald.co.nz