More property sales eyed to invest in Wall Street

The Dunedin City Council could sell more surplus properties to fund its $2.3 million redevelopment of the Wall Street mall, it has been suggested.

However, Dunedin Mayor Dave Cull has backed the decision to invest in Wall Street, rather than use the proceeds from property sales to pay back debt, saying the move made sense.

His comments came after the deal to redevelop part of the mall for an expansion by Fisher and Paykel, including an extension into the Penrose Building next door and the car park above, was announced this week.

A council report made public at the time indicated two underperforming properties had initially been identified as suitable for sale, to fund its share of the deal.

Two more properties had been added to that list after council staff were canvassed while the deal was being considered, the report said.

Mr Cull said yesterday the council was not yet ''absolutely locked on'' to the number or location of properties to be sold, which he indicated could be bare parcels of land or something more developed.

While ''two or three'' properties suitable for sale had been identified, the number eventually sold to raise the necessary funds could rise, he said.

''It could be any number ... but one of the criteria would be how is it performing compared to what it will earn us if we invest it in enhancing Wall Street.''

Mr Cull also said there had been little debate about the relative merits of using the sale proceeds to pay down debt, rather than investing in Wall Street, because returns would be similar in either case.

The council's policy of using surplus funds to repay debt had been waived before, including when the council decided to fund ''invest-to-save'' options instead during last year's budget hearings, he said.

That was because returns in each case would be greater than simply repaying debt, while also achieving other council goals, Mr Cull said.

The decision to invest in Wall Street's redevelopment was ''a bit like that'', but he stressed the council expected a return and was not simply giving Fisher and Paykel a grant.

''This isn't a grant. This is an investment in enhancing a tenancy, and we're getting a return on it.''

Monday's announcement had confirmed the company had extended its lease in Wall Street by four years, to 2023, and increased the amount it paid the council, while also contributing a similar amount to the redevelopment.

Council acting chief executive Tony Avery said yesterday work to decide which properties were most suitable for sale would take several weeks, and he could not yet identify those to be sold or discuss what, if any, returns they were already generating.

''It's commercially sensitive at the moment, but once we've decided then obviously there will be a full public process around it.

''At this stage, we have an idea of how many [properties] that might be, but I'm not going to say ... It depends on which properties are finally identified and then the process for selling them, which will be a public process.''

He was also not yet sure how the properties would be sold, except that it would be a public process.

 

accountiblity

Are Mr Cull and his council going to be accountible for this investment should it fail to deliver?

Pay back the debt. 

 

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