City looks at future management of Westhaven
16 April 2004
City looks at funding and future management of Westhaven
Auckland City will be looking at funding and management options for the Westhaven and Hobson West marinas, which will avoid any major impact on rates, Mayor Hon John Banks said today.
Mr Banks said there is overwhelming public support for this week’s announcement that the Government would buy the marina to on-sell it to the city.
“Westhaven is safe and sound in public ownership and we’ll be working smart to make sure that, if and when it’s in city ownership, the deal largely funds itself,” Mr Banks said.
The government announced yesterday that it will buy the Westhaven marina from Ports of Auckland Ltd for around $52m plus GST, with the option of purchasing Hobson West marina for $2m plus GST. The government will on-sell the marinas to Auckland City, for around $46m.
“We’re not sure yet what the final numbers will be,” said Mr Banks. “We’re buying it to protect the area for the public, so that carries larger opportunity costs than would have faced a private buyer.”
Last month the council began consultation with the public over plans to take a more active role in property, beginning with the waterfront. This includes the purchase of Westhaven and Hobson West marinas, other key waterfront areas such as Queens Wharf and the Tank Farm and land in strategically important growth areas of Auckland.
To fund these property purchases the council could look at selling down its airport shares, raising debt, rate increases and income streams from the properties themselves.
During the next few months the council will consider options for funding and managing the marinas.
Mr Banks said the initial figures from the due diligence process indicate that the marinas would generate enough income to support the purchase without increasing rates.
“Westhaven and Hobson West can be clearly divided into the marinas themselves and the land based assets surrounding the water including the yacht clubs, commercial operations, grassed areas and walkways.
“It’s important to stress that ratepayers’ money will not be used to support the marina business. If there is a call on rates it would be to improve public amenity areas at Westhaven, which would essentially become a new premier park for the people of Auckland.
“For example, we would like to expand the walkways around the water’s edge and upgrade the small beach area. After all, public access has been the main driver of our proposal to buy.”
One option for funding the purchase is to lease a management contract for the marina business, which would see the council recovering a large portion of its initial outlay for the marinas.
“There are a lot of parties with an interest in managing the marinas, with the council retaining underlying ownership. A number of them have approached us over the past few months and we welcome their support for our purchase. We would need to ensure that we carefully considered the merits of each party before making any decision on management contracts.”
“We wouldn’t know how much we could get for the management contract until we had gone through the process of seeking expressions of interest. This could certainly help us to recover a major portion of the $46m initial outlay.” The Mayor said he expected those involved in the area to be thoroughly consulted, along with all residents, who were now being invited to give the council feedback. Consultation on the proposed purchase of Westhaven and Hobson West marinas has been under way since 22 March and closes next Wednesday 21 April.