Joint venture subdivision under way in Cromwell

A subdivision in Gair Ave, Cromwell, takes shape. Sections from the joint venture development, which is a first of its type for the Cromwell Community Board, will be released on the market next week. Photo: Pam Jones

A joint venture residential development that is the first of its type in Cromwell will reap benefits for ratepayers, Cromwell Community Board chairman Neil Gillespie says.

The 78-lot subdivision in Gair Ave is on 3.5ha of Central Otago District Council-owned residential land and sections will be released for sale next week.

The joint venture, between the board and AC/JV Holdings Ltd, owned by Queenstown men Alistair Hey  and Clark Proctor,  was a first for the board and possibly the council, Mr Gillespie said.

The board had previously sold land to residential developers, and been part of joint ventures in industrial developments, but Gair Ave was the first joint venture residential development for the board.

Under the joint venture, the council will be paid for the land and receive 50% of the profit from the development. The developer is developing the land and selling all sections.

There are minimum price levels the developer is required to meet to maximise return.

The value of the investment and profit made would not be made public until all the sections had been sold, but the profit for ratepayers would be greater than if the land had just been sold to a developer, Mr Gillespie said.

"It's a better investment. That's the only reason we're doing it - getting a greater return on the rate of investment for ratepayers."

Mr Hey said the section sizes ranged from 420sq m to 860sq m and prices started at $280,000. He praised the community board for entering into the joint venture and said he thought "it's how all property should be developed".

Both Mr Hey and Mr Gillespie said the joint venture reduced the risk to both parties, and Mr Gillespie said the board would "absolutely" consider entering into similar joint ventures again.

Mr Hey said the Gair Ave development was significantly ahead of schedule and under budget.

Pre-sale discussions have been held with a group home company and sale contracts are soon to be signed for 10 sections. The rest will be marketed from next week and construction of a showhome will begin in November. Finance on house and land packages will also be available from the developer.

pam.jones@odt.co.nz