Overseas investors ordered to sell historic Waikato hotel
The Overseas Investment Office (OIO) has ordered overseas investors to sell a historic Waikato hotel complex after they failed to follow through with an agreed redevelopment.
Group Manager for the Overseas Investment Office, Vanessa Horne, says the OIO approved Kingstown Blue Spring Resort (KBSR) to purchase the Okoroire Hot Springs Hotel near Tirau in July 2014.
The company needed consent under the Overseas Investment Act to purchase the property because of the size and location of the land, and its historic value.
“The Okoroire Hot Springs Hotel is one of New Zealand’s oldest hotels, having first opened its doors in 1889. The property includes hot springs and several historic buildings,” says Ms Horne.
“As part of the OIO consent, KBSR agreed to undertake work to improve the facility. This included protecting important heritage features and improving public access to the property.
“KBSR also said it would construct eight new hot pools and 22 new guest rooms, which would have increased the number of guests that could stay and was intended to make it more attractive for visitors and tourists. This was one of the main reasons why the application was approved.
“The improvements would have provided benefits to the community, including the creation of jobs, walking access through the land to the Waihou River, and the protection of a heritage site. KBSR was given four years to complete the work.”
KBSR undertook some minor work, however, the OIO became concerned about the company’s ability to complete the developments in time and comply with its consent conditions.
Ms Horne says the OIO visited the property and worked with KBSR to try to resolve its concerns.
“KBSR has made very little progress towards completing the required developments and the OIO has decided the company is in breach of its consent conditions.
“The OIO has declined an application from KBSR to change its consent conditions. KBSR did not adequately address our concerns or give us confidence they would be able to complete the developments in the future.
“KBSR has been ordered to dispose of the Okoroire Hot Springs Hotel.”
Ms Horne says the OIO has stepped up its enforcement activity over the last few years.
“The OIO will act against overseas investors that don’t follow the rules and those that don’t deliver the benefits to New Zealand that the Overseas Investment Act requires.
“This case highlights the importance of overseas investors taking their obligations under the Overseas Investment Act seriously.”