Council F&P deal slammed

Ian Taylor.
Ian Taylor.
Dunedin technology companies are angry the Dunedin City Council was prepared to spend $2.3 million to help an outside company create 65 extra jobs when the local companies are being neglected.

ARL managing director Ian Taylor lashed out yesterday at the decision to help Fisher and Paykel, saying that for $2.3 million, the smaller technology companies in the city, including those which worked closely with his company, could have created 100 jobs.

''Bringing these high-tech jobs to the city is good, no disagreement. But when we had all the trouble in India, the DCC never came to see me about what they can do to help.''

Dunedin Mayor Dave Cull announced on Monday the council would spend the money on providing extra office space in the Wall Street complex, including an opening through to Penrose's building, upgrading Penrose's building and making a contribution to tenant relocation costs.

Fisher and Paykel Appliances, the company owned by Chinese whiteware giant Haier, would contribute a similar amount.

Golden Block Investments (GBI) owns Penrose's building. The council owns 49% of GBI, with the other 51% owned by Golden Block Developments (GBD), a company controlled by developer Tony Clear.

Ian Taylor.
Ian Taylor.
The two city council-appointed directors on GBI are Syd Brown and council property manager Robert Clark. The other two directors, representing GBD, are Mr Clear and Ken Cummings.

Golden Block Developments directors are Mr Clear, Jason La Hood and Durham Throp. No details were available on any financial contribution to be made by GBD to the Penrose's upgrade.

Property developers spoken to yesterday said while the council could claim it had a 50% say in GBI, it only did at the board level.

If push came to shove, Golden Block Developments would have the final say as it held the extra share.

It was similar to Prime Minister John Key being able to sell 49% of state-owned energy companies and retaining full control of the company with the Government retaining 51% of the shares.

They also said it was unusual the majority owner of the building, GBD, was not making a financial contribution.

It should have been the council upgrading Wall Street, which it owned, and GBD making a substantial contribution to the improvement of Penrose's building.

While supportive of the new jobs, Mr Taylor said it was a slap in the face for other commercial property owners in the city whose rates would go to pay for the upgrade of Penrose's building.

There were plenty of empty buildings which could have accommodated the extra jobs.

Mr Taylor said the day Fisher and Paykel Appliances, which had received much help from the council previously, made more than 300 workers redundant at the Silverstream plant, he and his wife were planning to close their business.

The cancellation of a contract in India had left the Taylors stretched for money and they decided the best decision was to close the Dunedin operation.

''As we walked into our office, the receptionist held up the newspaper and showed us the headline. I turned to Liz and said `we can't do this now'.''

The Taylors sold their investment in Terralink for around $1.5 million.

''It was up to us to find a way to survive. We paid off all of our debt and had enough cash to last for two months.

''Not one councillor came to see us at that time.''

It did not seem right for the council to spend $2.3 million on Fisher and Paykel when others remained loyal to the place, he said.

''The reason we stayed was Fisher and Paykel making those 350 people redundant.''

Cr Hilary Calvert, a commercial property owner in the city, said the decision to spend the money on upgrading Penrose's building and Wall Street made sense on a commercial level.

Any business owner of Wall Street would have done exactly the same to keep a tenant or improve the value of the building should it be sold.

However, she was concerned over ''unreliable information'' given to councillors and was unsure, because of the information supplied, whether the investment would break even.

''On a commercial level I think the decision makes sense but we won't know - based on the unreliable information - whether it will break even. Who knows if it will cost three times that?''

She had talked to other councillors about the information, pointing out aspects she did not agree with, but the decision to proceed had passed anyway, Cr Calvert said.

Because of Wall Street's ''innovative design'' it did not have as much lettable space as it could have and to accommodate the expansion by Fisher and Paykel, there was no option other than to go into Penrose's building and lose some car parks.

Car parks were under threat all around the city and that could not continue, she said.

Cr Calvert also questioned the need for the council to contribute to the relocation costs of existing tenants.

That might happen if the tenant could not find anywhere else but usually, landlords would do everything they could to attract a tenant to shift to their building.

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