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Dunedin Mayor Dave Cull yesterday confirmed the regional council had withdrawn its offer to buy the Dunedin City Council-owned Dowling St car park, just over a month after the two parties entered negotiations.
Mr Cull told the Otago Daily Times the city council had been discussing a requirement to maximise the use of the site, which could have led to a multi-staged development involving the ORC and other parties.
But the ORC had also realised the site was not suitable for its requirements, as it considered options, including one site accommodating all its activities, including a depot, Mr Cull said.
The ORC was instead understood to be looking in Mosgiel for a possible alternative site, while the DCC was in discussions with other parties about the Dowling St site, he said.
ORC chairman Stephen Woodhead also confirmed the deal was off, saying the city council’s wishes for greater utilisation, together with other factors, including the ORC’s requirements, were behind the decision.
The ORC was now considering "where to next", but the setback did not mean the process was back to square one, he said.
Mr Cull said the Dowling St car park was seen as a key site in the revitalisation of the Exchange and nearby warehouse precinct.
The car park site could accommodate up to 700 people, which was "considerably more" than the ORC staff count of about 230, he said.
"It’s a critical inner-city site ... If you put a small business on there, and took up the whole site, that would be a waste of an opportunity. We definitely want optimal use of the site."
However, Mr Cull dismissed any suggestion the city council had tried to play hardball with the ORC, saying talks had been "amicable" while trying to find "an outcome that optimises the benefits for both parties".
"There’s no way that the DCC could impose conditions on the ORC that disadvantaged them, and vice-versa.
"As it turns out, because of the changing needs of the ORC, there was no middle ground. It wasn’t a suitable site for them anyway."
Mr Cull said the outcome was not a setback for the city council, which wanted "the right outcome for that site, not some kind of compromise".
It would also not derail the potential acquisition of the ORC’s waterfront site, in the Birch St/Kitchener St area, which the ORC had previously eyed as a potential headquarters site.
Last year, the ORC investigated selling the waterfront site to the DCC for development, which was being discussed by the parties in parallel with the Dowling St car park site.
Mr Cull said the two deals "happened to be going on at the same time" but "weren’t necessarily connected".
"One isn’t conditional on the other."
Mr Woodhead said the regional council had not yet decided whether to sell it, but he remained firm the site was not suitable for a new ORC headquarters.
Mr Cull said any purchase could be made directly by the DCC or, alternatively, by any new agency set up to run the waterfront development project.