Question is do you want a Private Development, a Public-Private Partnership Development, or a case of Council-led Public Works?
On Friday it was picked up that Tournament Parking had made an unsolicited offer of $75 million for the Auckland Transport Downtown Car Park. In my “$75m offer for AT’s Downtown Car Park” post I had asked some questions at the bottom of the post, they were:
- The CV of the site is at $65 million. So is $75 million a good offer or a bit of a bargain here
- Will Tournament who if successful in their offer redevelop the site according to the wishes of the City Centre Master Plan. If not then would it be better if Council via Auckland Transport (who currently own the site) to hang on to it
- Would the loss of income from the parking building be a detriment to Auckland Transport and Auckland Council on upcoming capital expenditure programs
- Does this need to go through the Auckland Transport Board and the main Council Governing Body before any cheques are accepted for the parking building.
Since that post I have noted a response from Council as well as a URM poll that was commissioned to gauge support around the $75 million offer for the car park. The NBR carries some more substantive commentary around the offer which has kicked off a debate within Auckland.
From The NBR:
$75m offer for carpark building labelled ‘cheeky’
Chris Keall | Saturday June 07, 2014
A $75 million unsolicited offer on Auckland Council’s downtown carpark building has been bagged as “cheeky”.
The building, which sits on a 6442sqm site, has a rateable value of $65 million ($32 million for the land, $33 million for improvements), $10 million less than the cash bid made yesterday by Tournament Parking owners James Brown and Simon Rowntree. The pair say the building is in need of an upgrade.
“It is a cheeky offer as it’s not that much more than the CV but the property will gain in value hugely due to the CRL [City Rail Link],” saidTransportBlog co-founder Matt Lowrie after being approached for comment by NBR.
The lower Hobson St carpark has around 1900 spaces, and sit in a prime location a block back from the waterfront Viaduct.
The $2.68 billion, central government CRL is due to be constructed between 2015 and 2021 (property buying is about to get underway), and willinclude a station two blocks to the east.
The council has long term plans to redevelop the site away from parking, Mr Lowrie points says.
“This offer means that vision might not happen.”
The counci’s City Centre Master Plan describes the view from the carpark in Lower Hobson St as “one of Auckland’s finest, but currently reserved for vehicles”.
…
Auckland Council chief executive confirmed Stephen Town an unsolicited offer was received Friday morning, but said no comment would be made until next week — including on whether, if it decides to sell, the council will seek other offers.
Brown and Rowntree say their $75 million offer expires close of business Friday.
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And from The NBR on the UMR Poll about the deal:
Only 32% of Aucklanders support $75m bid for council carpark — UMR poll
Saturday June 07, 2014
A poll commissioned by the two businessmen behind a $75 million offer for Auckland Council’s downtown carpark found 41% against the sale, and 32% in favour.
James Brown and Simon Rowntree (both 39) say they will meet with Auckland Mayor Len Brown and senior council officers on Monday morning to discuss their proposal.
The pair’s offer, which expires at close of business on Friday, is $10 million above prime CBD property’s valuation.
“This is an outstanding offer from the council’s perspective: cash, unconditional, with a quick settlement and a legally binding commitment not to increase casual parking prices above the rate of inflation for at least five years. It is also clearly well above valuation, as evidenced by no other property investor coming forward to match it over the last 24 hours,” a spokesperson for Mr Brown and Mr Rowntree said today.
“James and Simon are very encouraged by the mayor agreeing to meet them and their lawyers so quickly after they made their offer, and by his comments on TV3’s The Nation this morning that he is open to divesting the car-park to help fast-track his Auckland City Rail Link, which they strongly support.”
The spokesperson said Mr Brown and Mr Rowntree were also encouraged the UMR Research poll of 500 Aucklanders that they commissioned.
While more opposed the carpark sale than favoured it, the poll also indicated a majority is much more comfortable with the council divesting the car-park to Auckland businesspeople than Queen Elizabeth Square or Queen’s Wharf to foreign investors, the spokesman said.
…
You can read the rest of the analysis of poll over at the NBR site.
After the initial questions I mused yesterday a few more came up this morning.
For starters after reaction from Councillors over the entire situation will the matter be raised as an Extraordinary Item of Business on Thursday’s Auckland Development Committee. If the matter is going to be discussed in the Committee will it be in the open or behind closed doors (and away from the media and social media commentators like myself).
The next set of questions follow logically on from the first set and the above question in being how do we want to develop that piece of premier real estate that is the Downtown Car Park.
First though some context to the City Centre Master Plan
The City Centre Master Plan with associating PDF’s (to download) can be found HERE. In particular you need to go to Transformation Move 1 – The Harbour Edge Stitch where the parking building is mentioned as a Planned Project Two – Hobson Street.
An extract from the City Centre Master Plan in regards to the Downtown Parking Building:
Britomart West
This area at the foot of Albert, Federal and Hobson Streets could be developed as the ‘harbour window’.
City Rail Link investment and public transport and road improvements are expected to reduce people’s reliance on the car to get into the city centre. This would free up existing parking buildings, most notably the Downtown Car Park, for redevelopment.
Queen Elizabeth Square and Lower Queen Street are Auckland’s gateway for thousands of visitors, but their use and design do not create a great first impression. With City Rail Link construction this area provides an opportunity to enhance the Precinct into a lively and attractive urban space post construction.
It effectively leads on to this:
Project 2 – Hobson Street Flyover Area
Developments to the Hobson Street flyover area will create an entrance to the Viaduct that we can be proud of. Where the Downtown Car Park building and lower Hobson Street flyover once obscured views and acted as a barrier to pedestrian movement, there will be a new harbour window. New developments in this area will create new public spaces and great views of the Harbour when you arrive in the city by Hobson Street.
A larger and more aerial version of the above graphic:
Okay so that is the context of that area of the City Centre Master Plan in regards to the Downtown Car Park as well as the $75 million offer, we come to the three questions that will need to be ultimately answered (as well as the first set if one of the upcoming options is taken).
The three questions or rather situations for the Council and Auckland Transport to consider:
Would it be better for Council to:
- Sell off the Car Park and land to a private sector operator and try to control future development per the City Centre Master Plan via the consenting processes
- Hold the land and parking building itself (lease the parking building) but sell the air rights above it to a private developer. So in virtue a Public Private Partnership that could allow for more strict development controls of the site so that the development itself could adhere to the principles of the City Centre Master Plan. This can be common overseas with metro rail developments seen in Japan and Hong Kong. Also if you look at the Westfield Manukau Mall site I believe Westfield do own the actual mall itself but the land the car parks sit on as well as the car parks themselves belong to Council. Council leases the car parks back to Westfield where a recent deal for a 25 year lease was agreed to between Council and Westfield. As Council controls the lease as result from owning the land it could work in partnership with whoever owns the mall (and other owners of property in the Metropolitan Centre) in redeveloping those areas. I also note that the Westfield Manukau Mall Event Cinemas are built over the car parks rather than on the land that would be owned by Westfield themselves. That means did the former Manukau City Council (owner of the parking and subsequent land – now transfer to Auckland Council) lease or sell the air rights over those parks for the cinema to be built. This poses an interesting point as it could give insight to how Council and AT handle the Downtown Car Parking building especially with the City Centre Master Plan. Effectively like Manukau own the land and the parking facility (so the car parks) but lease the parks back to the private sector like Manukau and/or lease or sell the air rights over the parking facility for a private sector development.
- Hold onto the land and building and embark on some good old fashion public works themselves (Auckland Transport, Auckland Council Property Limited, and Auckland Council Investment Limited)
Manukau City Centre – highlighting the land and parking parcels owned by Council. Also seen are other property parcels owned by other private sector operators (such as McDonalds) or again Council (the Civic Building and lot 59 to the south-west)
Click for full resolution
Okay I am going to leave the questions and discussions there until more developments come to hand. But I have raised some questions and given some thoughts for the Auckland Development Committee and Auckland Transport to consider when dealing with the Downtown Car Park. The last thing we need to do is Council and AT to make a decision on both the fly and whim – a decision that we as a City most likely end up regretting. Does that mean let the Cheque gather dust and the deal pass over (closes end of business Friday coming up)? I say it would be prudent to do so.
Talking Southern Auckland 
