Campground lease arrangement "win win"

The 25-year lease that Queenstown Lakes District Council has signed with campground operators CCR is a “win:win” situation for the Council, the lessees and also for campers.

Mayor Vanessa van Uden said that the Council decided as a matter of principle last year that it was not its role to run a commercial accommodation operation or to compete with other accommodation providers. “This outcome meets that expectation, and at the same time delivers significant revenue to Council – both a capital sum for goodwill, and an ongoing lease rental payment which will be linked to revenue.”

The total price paid for the 25 year lease was $3.2 million, including lease premium and goodwill, with annual rental of $878,000, subject to periodic review.

Five of the Council’s campgrounds and holiday parks are included in the lease, which became operative last month. CCR was already managing most of the Council’s major campgrounds.

Chief Executive Adam Feeley said that the properties had been independently valued and the lease provided for rental at market rates with regular reviews.

There is provision that part of the Queenstown Lakeview Holiday Park may be withdrawn from the lease in the future, if required to enable the proposed development of the wider Lakeview site to proceed. If this occurs there would be a partial repayment reflecting the reduced goodwill.

Mr Feeley said the commercial terms had been negotiated taking into account independent legal and valuation advice.

Last November, CCR took over most of the camping grounds under a management agreement as an interim step, but Mr Feeley said a long-term lease was always the preferred option. It provided more certainty about income for the Council and was an incentive for the campground managers to invest in improved facilities.

“This agreement means that the campgrounds are run by a reputable and experienced operator, while still enabling the Council to ensure that appropriate quality standards are enforced. It also provides us with the flexibility to withdraw part of the Queenstown Lakeview Holiday Park from the lease at the point that it is required for the Council’s long-term plans for the Lakeview site.

The agreement covers the Queenstown Lakeview Holiday Park; Arrowtown Born of Gold Holiday Park; Wanaka Lakeview Holiday Park; Albert Town Campground and Glendhu Bay Lakeside Holiday Park. The Frankton Motor Camp is not included.

ENDS

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