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

Cr Nicola Young, whose motion to consult before Wellington implemented the living wage was defeated 8 votes to 5, writes in today's Dominion Post.

Wellington City Council has lit a fuse leading to a bomb of unknown size, with its vote to implement a "living wage" for its employees from January 1.

Councillors often stress the need for evidence-based, reasoned and clear decisions; correct process; and the need to avoid writing blank cheques but there was little - if any - consultation and analysis of the impact this wages policy would have on Wellington households and businesses. Ironic, considering the council has also committed to the capital being "open for business".

This is key. As we've pointed out before, the study by Auckland Council, and advice from the Treasury on the question of whether a living wage policy is a good tool to reduce poverty is damning.

Mayor Celia Wade- Brown has defended this Alice in Wonderland approach by pointing out the council didn't consult on the chief executive's salary either. The reality is that the CEO is paid the going rate in a competitive international market, whereas the "living wage" is an artificial intervention to boost incomes of lower paid workers who happen to work at the council.

The "living wage" proposed by the Living Wage Aotearoa New Zealand Campaign, is higher (relative to GDP per capita) than the United States, United Kingdom, Australia, and Canada. Incredibly, ours is higher than London's; the 18th most expensive city in the world (Wellington is ranked at 74th in Mercer's Cost of Living survey).

This is incredible.  Wellington Council want low income Wellintonians to pay more in rates to fund a 'living wage' higher than London's!  

The piece doesn't mention the hypocrisy of some Wellington Councillors voting to implement a living wage despite not paying it to their own staff.

We're all for higher wages, but taxing more in rates to artificially pay some more is not the way to get there.

Click here to read the rest of Cr Young's piece on the Dominion Post's website.

Our Executive Director joined Seven Sharp's Heather du Plessis-Allan to check out taxpayer owned company, Transpowers' new $1.2million cafe on The Terrace, Wellington.  Click the image below for video on demand.

Though we are new, we already know of examples where bureaucrats are not respecting the hard earned income of the New Zealanders who pay for their spending decisions through taxes.  Over the coming weeks we will be exposing some of those examples.

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A copy of our press release is available here.  You can find out more about on the what we stand for and a Q&A pages available at www.taxpayers.org.nz.

Yours faithfully,

The members of the New Zealand Taxpayers' Union