Invercargill Central Ltd (ICL) has recorded the value of shares in its current accounts, which show ICHL’s shares are now valued at $500,000.
A total of $43.2 million was originally invested in the inner city development, which included the $2.7 million purchase of Readings Cinema and the neighbouring buildings.
The council had anticipated this change in value when considering investing in Invercargill Central and it was nothing to be concerned about, Mr Wood said.
The council’s investment in ICL was long term and that was reflected in the value of the investment shares as it stood now, he said.
"The decision to invest in the inner city development was not one made for commercial benefit but rather community benefit. There are no surprises here and we knew we’d need to hold our investment for a long time."
The council was satisfied the steps taken to date to identify the significant risks of the project, and mitigate the impact if those risks were realised, he said.
When making the decision to invest, the council had considered several reasons that were outlined in the due diligence report on August 12, 2019, he said.
The council believed the redevelopment was likely to make the central city a hub for retailing, business, culture, entertainment, education and social services for Invercargill and the wider Southland region. The council also acknowledged its desire to achieve community wellbeing outcomes by allocating sufficient funds to the surrounding streetscape, he said.
"It’s fair to say that the community feedback to date is the investment has achieved those objectives, including the streetscapes works undertaken by council on Don and Esk Sts, and the risks of the development to date have been prudently managed.
"A key determination in the reason for council investing was the lack of commercial return as noted to be balanced by wellbeing outcomes."
As progress continued on the inner city development, ICHL continued to monitor the investment on behalf of the council.
- Staff reporter
