Council selling off unwanted properties (+video)

Almost two years after the Victoria St Arterial Project was scrapped, the council is selling the properties it had planned to demolish.

It is hoped the council will make a profit from the sales, enabling it to pay off some of its debt.

A Rotorua Lakes Council spokeswoman said the local authority was gradually selling off all properties deemed surplus to requirements, including those bought to make way for the Victoria St Arterial.

Plans for the road - which was to have linked up with the proposed Eastern Arterial (also now scrapped) and run from Te Ngae Rd, down Victoria St behind the mall and across Pererika St to Pukuatua St and the Tarewa Rd intersection - were cancelled in 2014.

The council spent more than $6 million buying properties along the proposed route.

The 11 residential properties that cost the council $2.3 million are all being sold back to the public.

"Four of these residential properties have been sold at auction with another one under contract and a further property expected to go under contract.

"These four properties were purchased by council for a total of $875,000 and sold last week for a total $882,000," the spokeswoman said.

The council's chief financial officer Thomas Colle told councillors at today's Strategy, Policy and Finance Committee meeting market value was being sought and while there had been a loss on one of the four properties already sold, the total for all four was more than it had paid for them.

The spokeswoman said the remaining residential properties would be marketed during the coming months with three, which were adjoining properties in Elizabeth St, likely to be marketed as a development opportunity.

She said the council would work on a strategy to sell the five commercial properties - on Te Ngae Rd near the recycling centre - next year.

Councillor Charles Sturt told the Rotorua Daily Post he was not allowed to take part in the decision-making process as he was a real estate agent, but he could put his views forward.

"They have got lucky with the timing, from my experience things are booming. I don't think they should flood the market with them though. It would be counter-productive and could cut some of the returns they could get.

"We paid quite a bit for them in the first place and it was over a period of eight to 10 years that we purchased the properties and there have been highs and lows in the market in between."

He said selling the properties was a good thing.

"In the current market the council could get quite a substantial return, which would be great, but even if they just get a 10 per cent return that's money coming off council debt."