Posts Tagged ‘Daly St’
Daly Street Apartments have risen from the ashes.
The apartment development in Lower Hutt has been taken over by another developer looking to finally get it off the ground.
The backstory on the development was that the property group Merge was the original developer in March 2008 declaring that it had sold 26 of the the 28 apartments. Prices ranged from $630,000 to $1.5 million for a penthouse.
The projet stalled because of lack of working capital and Merge approached the Hutt City Council for financial support. Councilors initially approved a $1.7 million loan to support the $22.5m project sighting it supported inner city development. This was then cancelled in the face of public outrage when it become public.
Peter Savage,a director of City living Group, confirmed this week his company had taken over the Daly Street Project. He declined to say how much he had paid to Merge Group.
Mr Savage said the entire project was under review and it was not possible to say when work would begin. However, his company had been in touch with all the previous apartment buyers and was looking at all aspects of the building and elements of design.
Well all credit to the Dom Post for following up on this matter, addressed earlier on this site about the apparent reversal over this development has unearthed minutes of council meetings regarding Daly Street. It does seem now that the developer wont be moving any time soon on building on this site. The question still remains over what role does the Hutt Council play in using public money for such matters. Opinions vary widely.
Hutt city councillors voted to lend nearly $1.7 million of public money to a developer that had never before completed a building project.
Papers obtained by The Dominion Post show some councillors and officials raised early concerns about the Merge Property Group’s inexperience. Nonetheless, the loan was approved in principle for the company’s $22.5m, 14-storey riverside apartment block in Daly St at a closed meeting in late January.
After public pressure, the loan was changed into a guarantee, before falling through when the council’s own property company rejected the idea.
Minutes of several “public excluded” meetings earlier this year show councillors and the senior management team were each divided over the proposal.
At the January meeting, Merge executive director Brent Casey appeared before the council with real estate agent John Ross.
“In response to questions from a member, Mr Casey advised that the company had been formed three years ago and had yet to complete any developments,” the minutes read.
Matt Reid, the council’s general manager of business services, expressed “a concern with the young age of the company”. Councillor Deborah Hislop opposed the plan because the company had not completed any developments, and other opponents argued that the loan was not the council’s core business.
Chief executive Tony Stallinger, a supporter of the loan, identified risks including losing the money, increasing debt, inconsistency with recent practice and adverse public comment. However, he also argued that the venture could turn a profit for the council, and one apartment block in Lower Hutt could encourage others and help to revitalise the city centre.
Lower Hutt Mayor David Ogden backed the loan idea and said this week that he stood by it. “All we were trying to do, some of us, was to get more people into the city.”
Though the young age of the company was “an interesting fact”, the people in charge were experienced. “They weren’t gauche or naive or unsuccessful people.”
The deal would have been handled by the council’s property company, Urban Plus, which was set up to provide housing for the “elderly and socially disadvantaged” and to manage council properties.
The Merge Property Group is also behind two stalled Wellington developments the $46.5m, 108-apartment building in Taranaki St on the former Forest & Bird site, and the $60m, 15-storey Metropol development in Ghuznee St. A Merge spokesman could not be contacted yesterday.
via Dominion Post
Council owned company Urban Plus last week recommended that the council not proceed to lend $1.7 million to a developer as the risk was too great.
No doubt the council acted properly by insisting that Urban Plus complete due diligence, the question lies as to whether it is the councils role to fund a developer at all?
Public opinion would suggest that a greater level of transperancy is required by the council in any dealings involving funding especially all projects that involve private investment, or a project deemed to benefit a private investor.
So what of the Daly Apartment development now?
Is the project going to proceed? Was the councils money a necessary deal maker to complete the project?
No doubt time will tell if any work will commence on this empty site in Daly Street.
Photos copyright HuttNZ