Greater Wellington loses $43million on one building

The Taxpayers’ Union is slamming the property management skill at Greater Wellington Regional Council which has lost 95% of the purchase price of the building it used to occupy.

Information released to the Taxpayers’ Union under the Local Government Official Information and Meetings Act show that ‘Pringle House’ in Wakefield Street, also known as the 'Regional Council Centre', was purchased in 1987 for $22 million. In 2014 dollars, that is equivalent to $45.2 million. According to a recent independent valuation, the property is worth only $2.3 million. The documents reveal that ratepayers have taken a loss of more than 95% of the purchase price.

This shows why councils should be extra careful about managing property. At the time when Greater Wellington is taking a 95% loss on its own building, the port it owns is pushing ahead with the Harbour Quay property development, which Wellington ratepayers underwrite.

Last month the Taxpayers’ Union revealed that Greater Wellington had not bothered to enquire into the extent of damage and potential loss resulting from the Cook Strait Earthquakes (click here for DominionPost coverage).

These new revelations do not give us confidence that Greater Wellington are good stewards of ratepayer money. The Council should leave the funding of property development to the private sector and put a stop to risking public money.

Notes:

• Pringle House, the former offices of Greater Wellington Regional Council, were purchased for $45.2 million (inflation adjusted) in 1987.
• The building is now worth $2.3 million and is earthquake prone.
• Consultants have estimated that it will cost $32 million to bring the building up to acceptable standards.
• The costs to physically relocate the Council offices after the Cook Strait quakes last year were nearly $90,000 (not including staff time).
• Despite sitting empty, the building is costing ratepayers $17,000 per month.
• The Council has considerable property risks as debt guarantor of Centre Port’s ‘Harbour Quay’ property developments. 

 Letter from GWRC to NZTU 23 May 2014

 Attachment 1 to OIA 2014 065 - Telfer Young Market Valuation

Attachment 2 to OIA 2014 065 - Spencer Holmes Final Report on the RCC Building

Attachment 3 to OIA 2014 065 - Dunning Thornton Seismic Status Peer Review Report