Categories

Archives

Sell the Downtown carpark?

An interesting development yesterday as the owners of Tournament Parking turned up to the council with a check for $7.5 million as a deposit to try and buy Auckland Transport’s Downtown carpark  for $75 million.

The operators of Tournament Parking have made a surprise offer of $75 million today to buy the downtown carpark from Auckland Council.

James Brown and Simon Rowntree made the unconditional cash offer of $7.5 million upfront with a settlement date for the remaining $67.5 million on July 1.

The downtown carpark has 1900 spaces and sits on prime waterfront land a block away from Queen St.

The offer includes a legally binding commitment not to increase casual parking rates above the rate of inflation for at least five years, and to maintain existing free public access from the carpark building to Customs St West, Lower Hobson St and Albert St.

The offer represents a $10 million premium over the current valuation of $65 million however it needs to be remembered that the last valuation occurred three years ago in in 2011. To put some perspective on things, Precinct Properties brought the Downtown Shopping centre in September 2012 for $90 million with the centre having council valuation of $75 million. That suggests the carpark offer by tournament is probably way undervalued.

downtown-carpark

But there’s another and probably even more important reason the council should not accept this offer. The site is listed as being one of the key opportunities as part of the City Centre Master Plan (CCMP). The plan suggests eventually redeveloping the site into other uses and creating public space outside tied in with the removal of the Hobson St flyover.

downtowncarpark-redevelopment

From this

hobson-viaduct

To this

hobson-viaduct-after

The Tournament proposal suggests locking the site in a state of suspended animation for decades which will do nothing to help the long term development of the city centre. As I’ve said here it’s a cheeky offer and undoubtedly it’s being made with the understanding the site will appreciate in value hugely as a result of the City Rail Link. In my view the council should fix the anomaly that sees them holding down the market on the pricing of parking, get on with the CCMP and over time redevelop the site away from its current use. After that time then it could be considered for sale.

What is positive is that we now even have carparking operators in Auckland calling the CRL essential. The chorus of people calling for it to be built keeps growing and that pressure can only help.

31 comments to Sell the Downtown carpark?

  • Hold. Hold. Hold.

    AC will be totally undermining their own credibility in regards to any “Planning” in this city if this sale goes through. We have a weak enough system in terms of guiding private ownership, and if Council starts to roll over and release key landholdings we might as well all give up now. This is an acid test of Council’s commitment to creating a more liveable downtown through more than just public realm and PT investment.

  • Anthony

    Has the council been fishing for buyers for our assets?
    How rare is it for the council to receive unsolicited offers?
    I’d like to see the details of the offer and I wonder what their plans are.
    I would have thought more than a 15% premium would be required.

    • Greg N

      Makes me wonder too, but maybe, with all these private developers seeing Precinct offer to buy QE2 Sqaure and getting approval in prinicple, I think they just sense a possible feeding frenzy so are just circling in the off chance there is a fire sale…

      Now, if this was Crhistchurch City, maybe that fire sale pending idea makes sense (but not even really there either).
      But Auckland where we can borrow nearly as cheaply as NZ Inc, why bother selling off public land when they can borrow against it if they really need to.

    • I understand that behind the scenes the council told Precinct to be creative and not rule any options out. I guess you could say they were told the think outside the square 😉

  • Greg N

    Agree with Tim R – this site will be worth 10 times the 2011 CV in 20 years easy.
    Also agree Council needs to get out of the “cheap” low end car parking business, but not through this option.

    Just last week Real Estate agents were moaning in the Herald about Dirt Cheap Herne Bay villas on the market for 190K, and now worth 10 times that after only 18 years and some internal do-up work.
    And were saying should have bought 10 or 20 of these in the ’90s when they could have.
    Coulda, Shoulda, Woulda

    Once the CRL is in place and the Viaduct area is redeveloped, that site will become a premier corner site, well able to have another Precinct sized Downtown office block on it – if nothing else.
    And imagine what the Downtown site will worth 20 years from now – and add some to the Car Park building to get an idea of the true value of that site.

    So Tournament. nice try, and if Council even considers this offer for more than 5 seconds, they are being very foolish and if, heaven forbid, they accept – Then AC will be pissing away the last chance to do Downtown and Quay Street properly, as barring another round of harbour reclamation, there will be no more council owned land left in the area for them to “play with” getting the CBD right.

    And in that case if they do want to sell, they might as well sell it to someone else other than a car park operator for a much better price..

    • Rob Mayo

      Totally agree Greg. The sale to Tournament should not proceed. The opportunity to properly redevelop that area as per the pictures in the CCMP, is the priority.

  • Barney

    Since its inception the redevelopment of the former Auckland Harbour Board Land has been full of angst. I wont delve into the details now as most of it is ancient history but what we are onto now is yet more over height waterfront tower blocks and the removal of an important but ugly traffic flyover and no real proposal of what will take its place.
    What is desperately needed in Auckland is a proper northern, western and Intercity bus terminal. Nothing has ever replaced the old Auckland Bus Terminal on the site of the Britomart Train Station and of course the planned Western Bus Terminal on Hobson St was never built.
    Not being an engineer I have no idea if the present parking building could be converted into a bus terminal or that it may be a case of start over again. However I couldn’t give a rats arse about the poor motorists and their precious car parks. They can catch the bus or let ’em walk.

    • Nothing would take the flyovers place, that is the point. No ugly flyover and less traffic on the waterfront.

      Can’t convert the carpark to bus terminal, the floor height are far too low to take buses.

  • bbc

    I can’t see the car park operator being willing to have the other flyovers removed to Fanshawe Street, and stating they’ll lock in the low prices isn’t a selling point it’s idiocy.

  • Jon Reeves

    Can they please offer to buy AT’s Manukau car park building please?

  • Rharris

    Thought it funny how they tried to sell it that they were doing us all and the council a favour. Prime waterfront views.

  • George D

    Hold.

    Also agree with Greg. After seeing the debacle of QE2 Square being sold in perpetuity without a semblance of due process, others will have been tempted to try their luck.

  • Tahi P

    Sell it – but not at $75m, probably closer to $100m. Site don’t have great views, stuck behind Copthorne. It will of course also generate approx $1m per annum in rates for the Council.

    • Greg N

      It has “no views” only when its a car park, as a 40 storey office block? Heaps of views and heaps of potential. (which obviously Tournament can see, even if you don’t).

      You could same the same thing about the “old” Downtown Centre tower, stuck behind the HSBC tower, with zero views – but only at the lower levels, thats why they[re putting up a 36 storey tower instead of a low-rise (and currently) low-rent shopping mall.

      As for rates of $1m, thats peanuts, carparks generate the least rates for the council, and even if it got $1m a year, as a carpark, over 20 years thats $20-30m (inflation adjusted).
      Considering the capital gain for the site owners in that time will be ten times what they’ve paid out over 20 years in rates – Council keeping for now is the better option.

      If the council was smarter not only would they not sell, they’d buy the Copthorne, amalgamate the site to create absolute Quay Street frontage and then do a fantastic redevelopment of the 3/4ths of the block.
      That will be worth 50 times the 75m “fire sale” price, especially once quy Street is redeveloped into our “next” Queen Street, without the traffic and the billion dollar views you don’t in Q St valley.

      After its redeveloped by Council to its final form, sure sell the thing off and use the money for other things, if there are better things it can spend the money on… but that day is a long time away from now.
      Council being a landlord is not such a bad thing either BTW, so don’t assume Council should sell now, or develop and sell, they can develop and hold using the rental income to cover any development costs while preserving the capital and land for future generations.

  • George D

    They’re trying to ram this through. Nothing good happens in three weeks. Who do we need to talk to stop it from happening?

    • Greg N

      Well don’t know if AT or AC (through ACIL) owns the land where the car park building sits, suspect AT does, so on that basis talk to AT’s board?

      Len was on The Nation this AM saying that any sale (if one occurs) needs to be done properly with expressions of interest and proper assessment of sites value prior to sale, not some jumped up companies idea of what the sites worth, to get the best price, so Tournament can probably forget about a quick sale to them without a contested process.

  • Luke C

    The does still have great views looking west, over towards Wynyard and Harbour Bridge. And if tower was planned would be best to buy up Copthorne to integrate that into the development too.

  • Waspman

    Fair to say if Tournament buy it, it can only encourage alternatives to cars because their parking fees make your eyes water

  • Ray Clarke.

    The huge indebtebedness that Len Brown is creating to construct his inner City Rail Loop already has Council paying A million dollars per day in interest. Add to that the UNFUNDED portion of the Rail Loop of $1200 Million Plus interest. We will have no choice but to sell some asets like it or not. Ratepaters CANNOT be bludgeoned in Debt similar to what happened at Mangawahi, Kaipara.

    • Sailor Boy

      Really,so we think that the CRL is causing indebtedness and not the 70+% of the ITP budget being spent on worthless roads?

  • Greg N

    Don’t know where your 1 million a day in interest figure comes from, Care to show the source? Sounds pretty much made up to me.

    And even if it was 1m a day, for 40 years is $14.6 billion “in todays” money. $12B is the current shortfall of councils transport spending over the next 30 years (to 2040) , if the council adopted the CFN network as proposed here http://transportblog.co.nz/our-proposals/congestion-free-network/), they’d save 12B in money within half that 40 year horizon, so they could pay that interest bill you figure council has, without breaking a sweat and still deliver all the transport projects the council needs, including the CRL.

    Government spends that and more all the time on more and more motorways including dropping $5+B on the tunnel to the shore and who knows how much on the Puhoi to Wellsford RoNS or Waterview connection projects

    You think that Council will have to fund the full cost of the CRL itself? And that there will never be a change of Government – that won’t pay at least its half of the costs of CRL (plus interest) in all that time?

    Think again.

    And yes council may well sell assets for all sorts of reasons, but not just because you think the sky is falling – because that doesn’t mean it is actually, you, know, falling.

    And if you don’t like the way the council spends your rates, you can either move out of town, or get elected and become a councillor and do something about it..

    Anyway if I was you I’d ignore the Auckland Council debt issue as small potatoes and complain about how central government is wasting 10 times as much of your present ***and future*** tax dollars on frivolous motorway projects all over the show like there is no tomorrow – thats a problem right there.

    And while you’re at it writing to complain, ask the Government to drop the GST charged on Rates – as thats a tax on a tax and puts $300 on your rates bill just like that.

  • nick

    Remember these guys are getting out of parking and into property. They’re responsible for the City Works Depot and Osbourne in Newmarket. Two healthy additions to the city. It could be a good thing.

    • I saw somewhere them saying they’re prepared to keep it as a parking building till 2085 or something like that and that they want to keep the bridge over to Fanshawe St. Presumably their plan is to use it as a parking podium and build on top of it.

  • Council have turned down the offer.

    Auckland Council is returning a $7.5 million deposit cheque to Tournament Parking.

    Council received the cheque on Friday in an unsolicited offer from Tournament Parking to buy the Downtown Carpark for $75 million.

    Auckland Council Chief Executive, Stephen Town, said the cheque was being returned as council has not made any decision about selling the carpark ahead of developing its Long-term Plan.

    “The carpark is not currently for sale. If there is to be any divestment of parking assets, a proposal to do so would be included in the Long-term Plan for public consultation,” said Mr Town.

Leave a Reply