Kiwifruit marketer Zespri International has bought the former borough council block in Mount Maunganui for $10.1 million.
The sale was announced at the city council's offices by Mayor Stuart Crosby, CEO Garry Poole and Zespri Chief financial Officer David Hazlehurst today.
Tauranga Mayor Stuart Crosby and Zespri CFO David Hazlehurst. Photo: Supplied.
The price is higher than the rating value, and a few hundred thousand, but less than $500,000 under one of the other tenderers.
Councillors declined the higher bid because 'there were too many conditions and flags,” says Mayor Stuart Crosby.
'It is fantastic that this truly global company will develop an iconic building that the city can be proud of, and work with us to reinstate the community space in the adjoining parkland,” says Stuart.
'We will work closely with Zespri to develop this space, to create a sense of place and encourage community and commercial activities. Council has listened to the public and this is a great outcome for everyone involved: the community, the city, and Zespri.”
The net return to the city is $9.7 million, $10.1million minus valuation expenses and commission.
Payment comes via a ten per cent deposit of $1.01 million, with the balance payable once the sub division is approved – swapping the open space from the south to the middle of the block on Maunganui Road.
Zespri has purchased around 8,100m2 to build a new, long-term headquarters for the industry.
David Hazelhurst says Zespri will build on the green space at the southern end of the block near Matai Street.
Zespri will pay for the demolition of its current leased headquarters, the former Mount Maunganui Borough Council offices, which it is leasing from the city council.
'We have got everything lined up to go into the design phase from today,” says David.
'This is a significant moment for Zespri and we are so pleased to cement our place in this community, near the heart of the New Zealand kiwifruit industry.
'The industry has reached pre-Psa volumes of fruit and is set for strong growth so it is fitting that this opportunity came up to invest in our Maunganui Road site. This offers real value for our shareholders and means we can maintain business continuity.”
Zespri hopes to move in during 2018.
15 comments
OKAY WHERE TO START ON THIS B/S
Posted on 14-10-2015 16:50 | By ROCCO
Sale price should have been in exess of $12.5 Million so the Tauranga Ratepayers shortchanged and sold short by $2.4 million.Next up on the block are the commission and valuation fees of $600,000 -you are joking of course $300000 is closer to the mark another bundle of cash flushed down the gurgler.When is this garbage going to stop happening?
Quick sale.....
Posted on 14-10-2015 18:00 | By jed
This was only advertised last week right ? Seems to be a very fast sale to me. Why not advertise a little more.
Funny
Posted on 14-10-2015 19:09 | By Capt_Kaveman
How THE MOUNT offices lasted longer than the Tauranga council building
Where's the shortfall
Posted on 14-10-2015 20:44 | By Johnney
Sold for $10.1M, council to net $9.7M less commission and valuation. Where is the difference $400k and what was the negotiated commission? Can someone please answer that.
ROCCO
Posted on 14-10-2015 20:47 | By FunandGames
Who valued the land at $12.5 M?
RATEPAYERS SHAFTED AGAIN
Posted on 14-10-2015 21:10 | By The Caveman
So sold for $10.1 million........ ONE OFF payment - land GONE for good. Why was it not put up for sale with a 99 year lease? Council (and RATEPAYERS) would have got a commercial lease payment for 99 years PLUS rates for 99 years and at the end still OWNED the land. We have some real dumb B_ _ _ _ _ _ DSD both working for the council AND on the council. That land within 10 years for anything up to $50 million. Put it in you note book..............
$400,000.00?
Posted on 14-10-2015 21:31 | By Murray.Guy
$400,000.00 in fees for a valuation and commission on a sale that was in all likelihood predetermined with TCC and ZESPRI. Spending the money of other people with NO accountability, gobsmacked!
BASIL & THE BROOMSTICK TEST
Posted on 14-10-2015 22:47 | By kellbell
Wouldn't you just know it when the Council 'wallahs' are throwing the cash at the wasting assets they have fitted ratepayers up with they spend money like drunken sailors and cash is no object.Yet when they sell Ratepayers assets down the river and it is just like a bloody fire sale. The one thing both approaches have in common is that they cost Ratepayers gazillions$.
Basil's back
Posted on 15-10-2015 13:47 | By Plonker
So the giveaways continue, if it isn't overspending then it is undersold, there is no escape for ratepayers from the silly decisions running rife. Pretending to be commercially savvy from within the never ending glass box design for hibernation seems to be complete.
genius
Posted on 15-10-2015 17:24 | By wazzock
selling income generating assets to pay debt. $9M less costs to move and replicate park, say end up with $8M at best. Giving up $525k per year to pay off debt that costs $520k p.a. (based on 6.5% interest, taken from Std & Poors Report into TCC credit rating Nov 2014) and losing the asset.
WHAT
Posted on 15-10-2015 18:46 | By ROCCO
@ Fun and Games you question the valuation of $12.5 million but there is of course no registered valuation for that figure and I certainly did not pay $thousands of dollars to get one. Thankfully I didn't need to because of a very recent commercial land sale in the vicinity being the commercial property of .35 hectares at the junction of Maunganui Road and Banks Ave which sold for $5.5million or $1571.42 per square metre and that site is not much better(if at all) than the subject library site.So the value of the more desirable 8100square metres @ $1571.42psm gives a grand total of $12,728,571.42 and that does not even take into account $3million + worth of excellent buildings.A valuer has confirmed that estimation is indeed reasonably realistic.So if you take issue with me then let's have your assessment because I have done my homework on "this quickie sale"
SOMETHING DOESN
Posted on 16-10-2015 09:20 | By kellbell
Why was there such an indecent haste to get rid of this land when in reality there was in the end analysis only one logical purchaser?. Surely after the tender process TCC could have negotiated hardball because was still getting $1/2million+ in rent and that is a 5% return anyway.Also didn't need a agent to do a deal with the existing tenant who in the Annual plan process had clearly stated it's wish to buy.DAH
Rocco
Posted on 16-10-2015 13:44 | By Fun in the Sun
Did I say I had an issue with you? I just asked how you got the $12.5m figure. I didn't say you were wrong, I didn't say you were correct. You made a claim and I want more info as to how you got there.
ON REFLECTION
Posted on 19-10-2015 20:14 | By kellbell
Why on earth have we saved a very small park area of 3500m2 probably worth $5million plus? It is severely compromised too small in other words neither one thing or another.No one uses this area other that the 'small markets' outfit so why are we providing this for them at the rate of $4000 per week or $16000 a month when they could easily and better use Coronation Park.Probably only use it for 4hours a month anyway.DAH
Park area
Posted on 20-10-2015 12:56 | By Plonker
No use to anyone, to small, certainly plenty of other places available to relocate the minor use including the markets. I say sell the rest quick as well, cash in before Council staff think of something expensive and silly to put there.
Leave a Comment
You must be logged in to make a comment.