Hutt Council voted for $1.7m loan for Daly St Apartments
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