A bit more news on the Marine Precinct. The Marine Precinct group lead by Erika Harvey, Mark Ngata and Sean Kelly have had to withdraw their legal action because of the high costs and the risk of damages being awarded. Justice is only available to people with deep pockets. The legal costs would have been in the hundreds of thousands of dollars. Damage awards if they lost, could have been in the millions. The only option at the moment would be for council to halt the sale prior to settlement which is today. Not much chance of that. Letting the sale proceed means the ratepayers are footing the bill, with the risk of having to also pay out for a future class action.
Council as per normal are being very secretive. Rumour has it that there are various details around the sale which council does not want to disclose because of the likely public backlash. Wanting to avoid public backlash should not be a reason for withholding information. Another rumour is that the sale was put together by a local developer, perhaps using the super yacht development as a smokescreen, and that the intention is to build a hotel or apartments on the site. That is all rumour at the moment so we don’t really know. It is easy to imagine that the site could be used for a high class boatie development with wharves, boat facilities, cafes, restaurants and accommodation etc.
Council have released various details of the sale through the LGOIMA process.
The land has been sold in two separate blocks to Pacific Safe Harbours Limited, and Tumblehome Bay Limited. Both companies are owned 50/50 by Rofe Holdings Limited, and FFSJ Limited, both of unit 1b, 55 Epsom Road, Sockburn, Christchurch. The registered office for both companies is flat 4, 134 Early Valley Road, Lansdowne, Masterton.
What else do we know. Council is on the hook for approximately $29 million for the bridge wharf, approximately $8 million for the fisherman’s wharf, is required to dredge the wharf facilities, and is financing the sale to the tune of $10 million. The sale is roughly $4 million below market value with no competitive bidding.
This sale should be used as a showcase for public private partnerships. The public pays and the private partner benefits. A great deal if you can get it. Certainly I would call this exceptionally good value for money for the developer. Not so much for the ratepayers.
I worked overseas in the oil and gas industry. I started off as a naive kiwi boy from Tauranga, but you see things and eventually you understand what is happening. This sort of thing used to happen all the time in the oil and gas industry. If this had happened with a big oil and gas company in Asia for example, I would have immediately assumed, probably correctly, that various people were pocketing the difference between the market price and the actual sale price. The people involved are expats. Payments are made into offshore accounts, and then as the expats jump from country to country and between tax jurisdictions the money can eventually be laundered. Often a nice little nest egg to retire with when they go back home to the UK or the US etc.
An important point to make is that understanding what is (probably – possibly) happening is not the same as proving what is happening. The Mayor has come out very strongly saying that there is no reason to believe that there is any personal wrongdoing, and the council is probably prepared to spend a lot of ratepayers money to defend that narrative. The Auditor General has very limited powers to investigate so don’t expect a magic bullet.
The Mayor has written to the Auditor General asking that if the investigation does occur, that the elected members are engaged and interviewed. This is probably to deflect any criticism of the current elected members and cover their backs.
The problem for ratepayers is that if there has been misconduct, ratepayers will pay for it two or three times. First, we are the ones who are going to pay for this debacle. Second, the ratepayers will have to pay the costs of council defending the misconduct. Third, if there is a successful legal action against council, the ratepayers will also be paying any awards.
The only hope for ratepayers would be if the elected members were determined to get to the bottom of this and fix this recurring problem once and for all. There doesn’t seem to be much chance for that to happen. The elected members are far too developer friendly, and so far have tried to avoid the problem, except for covering their own backs.
As a final point, it really does matter who Tauranga elects to council. If we want good results we need to elect good people. If we don’t care who we elect, then goodness knows what results we are going to get.
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