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Tekapo-based businessman Anthony Tosswill, of NZ Horizon Hospitality Group Proprietary Ltd, was this week revealed as the person behind a proposed 18-storey hotel on the council’s Filleul St car park.
An ODT Insight investigation found Mr Tosswill is linked to 10 companies created to progress hotel projects across the South Island.
That included a failed bid to build a five-star hotel in Blenheim, which was withdrawn in August after Mr Tosswill declined a Marlborough District Council request for independent appraisal of his finances.
Two other four- and five-star hotel projects planned by Mr Tosswill in Tekapo have also faced lengthy delays, with consent for one yet to be issued — two years after it was announced — and construction delays faced by the other.
However, Dunedin Mayor Dave Cull told the Otago Daily Times he was confident the council’s due diligence was solid.
Council staff were aware of Mr Tosswill’s other projects, including the failed bid to build in Blenheim, and Mr Cull said he had talked directly to Mackenzie Mayor Claire Barlow.
"[She] gave me assurance the relationship and dealings they’d had with [Mr Tosswill] have been very positive."
Mrs Barlow agreed when contacted, saying Mr Tosswill’s projects were taking longer than expected but were still progressing.
"We have asked him a lot of hard questions and he has come back and answered them, so, from our perspective, to date, he’s kept his word."
The Dunedin City Council confirmed this week it had signed a memorandum of understanding with Mr Tosswill’s company to try to progress plans for the Filleul St hotel.
The deal allowed three months for feasibility studies while the council completed a geotechnical site assessment, costing up to $50,000.
Mr Tosswill would then have the exclusive first option to buy the car park at market value and seek consent for the hotel.
The council would then also consider Mr Tosswill’s request for relief from development contributions, worth up to $1 million.
Council chief executive Dr Sue Bidrose said appropriate safeguards would be in place to ensure Mr Tosswill fulfilled his side of any bargain.
It is understood that could include requiring the hotel to be built to agreed specifications before any transfer of land ownership took place.
Dr Bidrose also defended the council’s decision to enter an exclusive deal, rather than call for expressions of interest for the site, following a suggestion the Scenic Circle group was also interested.
Scenic Hotel Group executive director Lani Hagaman was not available for comment, and Dr Bidrose would not comment directly on the suggestion.
She said the Filleul St site had been ‘‘sitting there’’ for years.‘‘We have been talking about it for a long time as being a potential hotel site.
"At any point in time anybody can make an offer. If it’s the right outcome and it’s a fair market appraisal then that is obviously something we would take seriously."
Mr Cull said sale conditions would protect the council against risk, but at some point the council needed to act.
"We have to take things on their merits. You can only check people out so far and then you put the safeguards in and then you go for it, otherwise you would never allow anything to get off the ground.
"You’ve just got to put all the safeguards in place that you can and go for it."
The council could not be accused of "favouritism" when the land would be sold at market value, based on two valuations, and had been available for decades, he said.
But it was "absolutely" possible an open tender process could be used in future, if Mr Tosswill’s project did not proceed, Mr Cull said.
That could see the council setting the specifications it wanted in a hotel on the site and then inviting expressions of interest from potential developers, he said.
"Auckland did that on the waterfront ... and they’ve got a $200 million hotel going up on that site."