24 Apr 2024

Reading Cinemas disappointed by failed $32m deal with Wellington council

4:04 pm on 24 April 2024
Reading Cinemas on Courtenay Place

Photo: RNZ

Reading Cinemas says they were told their $32 million deal with council was not going ahead prior to a meeting they believed would sign off the plan.

On Tuesday, Wellington City Council announced it had called quits on the deal with Reading Cinemas to buy the land under the property and lease it back to the company.

The cinemas complex has been shut since 2019 due to its earthquake risk.

In a statement to RNZ, Reading International chief executive Ellen Cotter said their team were told by council staff of the news just ahead of a meeting which Reading understood had been organised with key principals of both parties to bring the deal to a close.

"There was no prior notification or indication council was terminating.

"To say we are disappointed is an understatement."

Cotter said the redevelopment would have delivered Wellingtonians a 100 percent NBS building, including a top to bottom transformation, recreating a world-class cinematic experience and a diverse mix of hospitality.

"It would have generated up to 200 employment opportunities when open."

She said the company appreciated the council was making a significant commitment, but that it would have owned the land, received revenues intended to meet its cost of capital, and be able to control and ensure certain key civic outcomes for Wellington.

"Reading's capital commitment would have been more than double the council's investment while also bearing all the construction and leasing risk."

Cotter said they had worked hard with the council for months to find a solution for the property.

"A memorandum of understanding was agreed between the parties in December 2022.

"By October 2023 we had also agreed the key commercial terms. Final and binding legal documentation remained outstanding, but drafts were well advanced when council terminated."

The company would now take time to consider its options.