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.

Todays article

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

Hutt Hospital $82 million dollar upgrade

Hutt City Council granted resource consent on the 17th April for the upgrade and this has triggered an immediate start to the project.

The upgrade includes:

  • 3 storey parking building off High Street
  • a new emergency department (ED) double the size of the present one.
  • doubling the number of operating theatres from 4 to 8.

Part of the consent is to address the 8 resident concerns of Pilmur Street who objected to the plan. Their concerns are addressed via a raft of conditions, including that an acoustic fence/wall at least 1.8m high be built on the street boundary and a noise management plan setting out measures to control vehicle and “antisocial noise at critical times” be worked out.

Carparking can be expected to start as early as next week, with action on the Pilmur Street parking first. The hospital has currently 942 employees so the issue around parking is paramount.

Objectors appear to have won concessions on their worst concerns but Valerie Bredican at 33 Pilmur Street is
resigned to the fact that there is little she can do. The property is estimated to be devalued by $100,000 due to the development.
Valerie is resigned to the fact that the project is vital to the city. She was offered higher fences but acknowledged that
any higher her house would be like a prison. I wonder why the Hospital has not offered to purchase her house, given
the advantage this property might have to the development. Perhaps she refused.
No doubt given the current economy that this project will give the city a  major boost in construction and suppliers to this project.
Lets hope the project has minimal impact on the environs as we watch the project develop.

Lower Hutt Daly Street Apartments

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