Wellington City Council Reading Cinema deal cancelled, what happens to the building now?

The Reading Cinema building on Courtenay Place, Wellington; Wellington Mayor Tory Whanau (inset). Photo / Mark Mitchell

ANALYSIS

A controversial $32 million deal to reopen Wellington’s Reading Cinema is dead. City councillors who say the deal “just didn’t stand up to scrutiny” and amounted to corporate welfare are delighted. However, the building that has become an eyesore in the heart of the city remains a difficult problem to be solved.

If Wellington Mayor Tory Whanau’s previous predictions are anything to go by, the shut-up Reading Cinema building on Courtenay Place could now stay that way for many years.

The Wellington City Council announced yesterday afternoon that a deal to bring the building back to life was dead. Senior council staff have reached a point where they did not believe they could get the best possible outcomes for Wellingtonians and decided not to pursue the proposal further.

The council had planned to buy the land underneath the cinema for $32 million, money which the cinema’s multi-millionaire owners would use to redevelop the site. It sparked a fierce debate over whether the plan was visionary or corporate welfare.

Tory Whanau loses another key project

Whanau has spent a lot of political capital on this project, previously saying that not going ahead with the deal would further kill the city.

Returning the Reading complex to its status as an entertainment anchor in Te Aro was a “huge component” of revamping the area, she has said.

“This deal is a crucial step to creating the vibrant, safe Courtenay Place Wellingtonians deserve”, she said in February.

“The alternative is we walk away from this deal and leave the Reading Courtenay complex as a huge eyesore looming glumly over Courtenay Place for years to come.”

The axing of the Reading deal comes after the new Government cancelled the $7.4 billion Let’s Get Wellington Moving (LGWM) transport plan.

Whanau tied many of her transformational policy platforms to LGWM when she was campaigning for the mayoralty. She was keen on light rail and her flagship policy was to deliver a new major urban revitalisation project along the mass rapid transit route between Wellington’s waterfront and the hospital.

With this vision suddenly off the table, the Wellington City Council negotiated with the Government to take over the LGWM project to remove private vehicles from the Golden Mile.

This concession has since been affected by the council’s budget pressures.

The council is now proposing to progress with construction on Courtenay Place and defer $83m worth of work on Lambton Quay, Manners and Willis Streets.

Wellington Mayor Tory Whanau says the Reading Cinema deal outcome is disappointing, but the right one. Photo / Mark Mitchell

The full project is now proposed to be completed over five years. This will be done alongside a value engineering assessment to identify further cost savings.

These setbacks for Whanau should be weighed against recent wins in this part of the city, many of which were set in motion before Whanau became the mayor but she has still seen through.

These include the opening of the Tākina Convention Centre, changes to the District Plan that will increase height limits in the city to accommodate more housing, and Precinct Properties selected to redevelop key sites in Te Ngākau Civic Square.

Councillors in the dark about exactly what went wrong

Deputy Mayor Laurie Foon, who supported the deal, said she was disappointed because she had hoped Reading would be a “golden child” to help revitalise Courtenay Place.

Councillor Rebecca Matthews, who was also in favour, said the council wanted to get a good deal for Wellington and when it became clear that wasn’t going to happen, the right thing to do was to pull out.

“Our inner city still needs activation but that will need to be achieved through other means.”

Councillor Ben McNulty has somewhat reluctantly supported the deal, describing himself as a swing voter.

Councillor Ben McNulty expects the cinema building will remain vacant for the next decade. Photo / Mark Mitchell

He said the deal had noble intentions but was marred with excessive secrecy and ultimately the public was not on board with it

McNulty claimed Reading had approached multiple commercial property developers across Wellington but could never thrash out a deal.

“I think their terms were unrealistic and the fact they can’t even work with the council and we were giving them a sweetheart deal... shows that really their financial position or their expectations are well out of line.”

McNulty expected the building would remain vacant for the next decade.

Councillors the Herald spoke to said they did not know any more details about what the sticking point in negotiations between the council and Reading was.

Council spokesman Richard MacLean said senior staff were not prepared to discuss further details.

A ‘painful experience’ for everyone involved

Councillor Diane Calvert, who opposed the deal, said common sense had finally prevailed.

“We need an independent investigation because to a number of us on the council, and the majority of Wellingtonians, the deal never seemed right. So how did it get pursued for six months?”

Calvert said it has been a painful experience for everyone involved.

She and four other councillors were the subject of a code of conduct complaint alleging they had breached confidentially about the deal.

Whanau appointed high-profile lawyer and former journalist Linda Clark to investigate.

Clark found there was insufficient evidence to identify who leaked the confidential information.

But Clark did find the councillors had breached the council’s code of conduct. The probe cost $43,000.

Courtenay Place in Wellington is tired and in need of a revamp. Photo / Mark Mitchell

Less than two months ago, Councillor Iona Pannett unsuccessfully tried to revoke decisions the council had made on the cinema and said she was delighted the deal was not going ahead.

“It was never a good deal, it should have never come to council, it was never explained why Reading couldn’t afford it.”

The deal didn’t stand up to scrutiny, Pannett said.

“I think it just got too difficult to defend and there was so much public concern about it. There was no one coming out really and supporting it.”

Councillor Nicola Young said the council should never have contemplated putting ratepayer money at risk.

“It’s been a huge waste of time, money and professional fees but that amount is tiny compared to the cost if the deal had gone ahead.”

Young said the council needed to focus on core problems like water infrastructure.

“I think everyone was really outraged by the effort that went into bailing out a multinational company.”

Georgina Campbell is a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.