6 Jun 2014


7:26 pm on 6 June 2014

Somewhere in Auckland Council's Civic Administration Building is a cheque for $7.5 million made out to the council. It won't be banked.

To do so would commit the council to selling the Downtown Carpark Building to privately-owned Tournament Parking for $75 million. Done and dusted by 1 July. The cheque is the deposit and just one element in what may be the most unusual and politicised launch yet of a commercial property deal.

The Downtown Parking Building's eight storeys still leave plenty of room to rise more in line with its neighbours.

The Downtown Parking Building's eight storeys still leave plenty of room to rise more in line with its neighbours. Photo: RNZ / Todd Niall

Tournament Parking's $7.5 million cheque.

Tournament Parking's $7.5 million cheque. Photo: SUPPLIED

Tournament Parking's co-owner James Brown, gave his first interview on the deal to Radio New Zealand National's Nine to Noon programme on Friday.

"We are born and bred Aucklanders, we're strong supporters of the mayor and government's vision for the city rail link," he said.

Tournament's public pitch for a major council-owned asset identified some of the key political buttons which needed to be pushed if the deal was to succeed.

The company has hired lobbyist Matthew Hooton, whose media release was headed "$75 million cash to fast-track Auckland City Rail Link" - attempting to link the deal to the major council project most in need of funding. $2.86 billion, to be precise.

The media release and James Brown in his interview also suggested that the proceeds would mean the council wouldn't need to accept an offer from Precinct Properties to buy nearby Queen Elizabeth Square. That deal got the nod in principle by councillors 14 to 7.

"We are uncomfortable about the council selling public space like Queens Wharf and Queen Elizabeth Square, to foreign buyers, to pay for their vision." Mr Brown told Nine to Noon. His media release pointed out that both he and his business partner were "born and bred Aucklanders".

That line reflected opinion polling which Tournament had already began on some of the key selling points of the deal. It has commissioned pollster UMR to carry out a phone survey.

A Radio New Zealand journalist's home was rung by UMR, asking which of three council assets they most favoured selling, specifying that the proceeds would help fund the City Rail Link. Also, would they prefer a sale to Auckland, Australian or Chinese buyers?

A spokesman for Tournament said the first night of polling found overwhelming support for selling the parking building, ahead of selling Queen Elizabeth Square or space on Queens Wharf. The preference was also for a local buyer.

The media launch of the $75 million offer didn't touch on the real issues facing the Auckland Council in considering a series of private sector bids for public downtown space.

The council has yet to pull together a long-term plan for the development of the city's waterfront, which is also New Zealand's most valuable commercial real estate.

Some of that work will become public within weeks when a consortium of council-owned agencies called the City Centre Integration Group, which has been blending the work and plans so far, delivers a more comprehensive view of the area's possible future.

Precinct Properties' bid for Queen Elizabeth Square is a slightly separate issue, in that its development would sit above a couple of hundred metres of the proposed City Rail Link tunnel.

The council may need to decide on that deal before a downtown master plan becomes clearer, because construction could begin next year.

The Downtown Parking Building is on a prime site with views west across the waterfront.

The Downtown Parking Building is on a prime site with views west across the waterfront. Photo: RNZ / Todd Niall

Prime property

The future of the Downtown Parking Building involves other considerations. The council's control of nearly 2000 public carparks has been argued by some as a valuable tool in broader transport policy. The price of commuter parking could sway some to switch to public transport.

It is also a prime piece of waterfront property, with sweeping views over the inner harbour from the upper of its eight levels and lined on the other side by more-recently-built high-rise office towers.

Tournament says its offer includes a significant premium over the property's current valuation of $65 million. That valuation - part of the council's region-wide snapshot of property values - is three years old.

The questions to be answered about the property's future are not just about its function as a parking building, but how the site can best be used - and by whom - in the revitalisation of the harbour's edge.

Auckland mayor Len Brown was out of the country when the offer was unveiled. In a statement, he is clearly delighted at rising commercial interest in downtown property. That after all, is part of the case for advancing the start of the City Rail Link from 2020, to the mayor's preference of 2016.

"As with any proposal, we need to ensure it makes good commercial sense and is consistent with our plans for the downtown area," Mr Brown said.

That will take longer than Tournament Parking's opening "drop-dead" date of 1 July.

It may be a technicality, but the building is not Auckland Council's to sell. It belongs to the council agency Auckland Transport - a company which has so far not been contacted by Tournament.