Board to extend lease on farmland

The Maniototo Community Board has decided to extend the lease on farmland it owns which could help fund the Maniototo Hospital rebuild, while a decision is made on the future of the land.

But there is some confusion over the timing and exact amount of a large grant pledged by the board towards the hospital project.

The board voted at its meeting last Thursday to renew the leases on two farm properties it owns in the Lower Gimmerburn district for a further year.

Maniototo farmer Mark Harris has leased two areas since 2008,  a 76.8ha area on Hall Rd at $6500 a year and 117.8ha on Wilson Rd at $18,000.Both leases expired on March 31 this year and will now continue until March 31, 2019 under the same terms and conditions.

The land had been identified as a potential source of income to help fund the rebuild of the Maniototo Hospital, and it was intended to "put a process in place" to determine the future of the land, involving a "request for proposals" for either sale or lease of the land, a report from Central Otago District Council property officer Tara Bates to the community board said.

The board and council voted last year to provide up to $2 million from the council towards the Maniototo Hospital rebuild, to be either repaid  by Maniototo ratepayers through rates or funded through sales of the two Maniototo farm properties.

Due diligence will now be done by the council to explore legal issues and the value and possible uses of the farm properties, before deciding whether they should be sold to provide the $2 million or would be better kept and leased out to provide ongoing income.

However, board members were confused about when the hospital needed the money, and what would happen it if called on the funding before a decision about the fate of the properties had been made and the board had enough money for the grant.

Some members also said communication between the council and  hospital management had been poor, and that it had taken too long to get this far, the board only voting about renewing the lease after it had expired.

Board member Sue Umbers said hospital management had indicated to her they would need the money within six to nine months, but council chief executive Sanchia Jacobs said there had been no formal request from the hospital for the money to be paid by a certain date.

Other board members said the $2 million was the last funding to be called upon by the hospital, and  if the hospital raised more than it expected, it might not require the full $2 million.

Otago company  Stewart Construction is starting work on the development today.

MHSL manager Geoff Foster did not disclose the value of the contract, but said the cost of the project was expected to be no more than $7 million.

He expected the residential part of the hospital would  be ready by April next year  and the medical centre and community facility with X-ray facility and specialist appointments to be ready in 13 months.

What would be done  with the original hospital building had not been decided, Mr Foster said.

pam.jones@odt.co.nz