Reading’s annual rent would cover the council’s costs making it fiscally neutral to ratepayers but Reading could buy back the land for the council’s original purchase price within the first 10 years.
The council is then free to sell the land to someone else at a higher price thereafter.
One of the key criticisms of the deal is that the council is only covering its costs and getting no capital gain from its investment if Reading buys the land back within 10 years.
The case for and against
Councillor John Apanowicz, who supports the deal, told On the Tiles - Local Edition there were a lot of assets owned by the council which did not deliver capital gains.
There were three key objectives for the Reading project, he said.
“One is that Reading completes the redevelopment at the earliest reasonable practical opportunity and this lease is structured so that they do that early, which is really key that they complete things early.
“The second one is that the initiative must be fiscally neutral to us ... we don’t have to make money out of it but we don’t lose money out of it.
“And the third one, which is the key one that the mayor is fully focused on, is redevelopment to promote the realisation of the civic outcomes - create a premier significant entertainment destination.”
Councillor Nicola Young, who does not support the deal, told the podcast it was corporate welfare for a multinational company based in the US.
The secrecy of the deal has led to enormous speculation and distrust in the council, she said.
“We’re elected to represent Wellingtonians but we operate in the dark sometimes.
“I think people are outraged, certainly judging by listening to Nick Mills [Newstalk ZB’s Wellington Mornings host] this morning and the emails I’ve had, people are outraged that the council is involved in this corporate welfare.
“It’s a terrible look for the council.”
Young and four other councillors were the subject of a code of conduct investigation last year after deputy mayor Laurie Foon essentially accused them of leaking confidential information relating to the Reading deal.
A $43,000 investigation funded by ratepayers and led by high-profile lawyer and former journalist Linda Clark failed to find the leaker.
Young said it was a public witch hunt and maintained she was not the leaker.
She also believed the other four councillors who were investigated did not leak the information.
Listen to the full podcast of On the Tiles - Local Edition to hear more from John Apanowic and Nicola Young about the deal that has divided Wellington.
On the Tiles is available on iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts. New episodes are available on Fridays.
This episode was hosted by Georgina Campbell, 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, and has hosted On the Tiles - Local Edition since 2022.
