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