Another $16m for project

Photo: ODT files.
Photo: ODT files.
An  extra $16million is being pumped into the Invercargill City Block development to tally up to a $46million contribution from Invercargill City Council.

ICC councillors yesterday voted to approve the recommendation, which said the community wellbeing outcomes outweighed the risk in investing in the proposal.

However, it was noted that should central government invest money through the "Shovel Ready" fund, the council would need to invest less.

When one of the project investors withdrew $21 million of his contribution last year, there was a funding shortfall and the council was advised that without that dollar amount, the project was unlikely to go ahead. Consultation took place on what the council should contribute and the majority of submissions, 60%, supported that the total contribution be $46 million.

While the vote to approve it was unanimous, there was confusion about what the additionally bought shares meant for the council and whether the project would become a council-controlled organisation (CCO).

The matter was brought up by Councillor Nobby Clark, who asked for clarification on equity and shares.

Finance group manager Dave Foster said they were the same thing.

"The question we run into with this one is that all the shares we acquire stands equal with all other equity."

Cr Clark asked if the council was going to put in $46 million and the other main investor $25 million, why the council was not "going toward" a CCO.

"If one council, or more than one council, holds greater than 50% of the equity in a company, then it is regarded as a CCO," Mr Foster said. However, he said one distinction was the type of equity taken.

After more discussion on the matter, chief executive Clare Hadley advised the council to go into a public-excluded period to receive further clarification.

The vote was made when that had been received.

laura.smith@odt.co.nz


 

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