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Only 32% of Aucklanders support $75m bid for council carpark — UMR poll

A poll commissioned by the two businessmen behind a $75 million offer for Auckland Council's downtown carpark found 41% against the sale, and 32% in favour.

James Brown and Simon Rowntree (both 39) say they will meet with Auckland Mayor Len Brown and senior council officers on Monday morning to discuss their proposal. 

The pair's offer, which expires at close of business on Friday, is $10 million above prime CBD property's valuation.

“This is an outstanding offer from the council’s perspective: cash, unconditional, with a quick settlement and a legally binding commitment not to increase casual parking prices above the rate of inflation for at least five years.  It is also clearly well above valuation, as evidenced by no other property investor coming forward to match it over the last 24 hours,” a spokesperson for Mr Brown and Mr Rowntree said today.

“James and Simon are very encouraged by the mayor agreeing to meet them and their lawyers so quickly after they made their offer, and by his comments on TV3’s The Nation this morning that he is open to divesting the car-park to help fast-track his Auckland City Rail Link, which they strongly support.”

The spokesperson said Mr Brown and Mr Rowntree were also encouraged the UMR Research poll of 500 Aucklanders that they commissioned.

While more opposed the carpark sale than favoured it, the poll also indicated a majority is much more comfortable with the council divesting the car-park to Auckland businesspeople than Queen Elizabeth Square or Queen’s Wharf to foreign investors, the spokesman said.

The council has proposed a $300 million development of Queen Elizabeth Square and Queen’s Wharf, which would help fund its share of the $2.86 billion, central government-subsidised. City Rail Link.

Messers Brown and Rowntree say selling the downtown carpark building for $75 million would help the square and the wharf say in public hands.

While 62% of Aucklanders oppose selling Queen Elizabeth Square and 56% oppose selling Queen’s Wharf, only 41% oppose the sale of the car-parking building, goes Brown and Rowntree's spin.

When asked which asset they would prefer sold to help fund the rail link, 51% opted for the car-parking building, with just 21% choosing Queen’s Wharf and 15% favouring Queen Elizabeth Square.

When asked who they would be comfortable selling an asset to, 91% said Auckland business interests, 41% said they would be comfortable seeing assets sold to Australian business interests and only 28% would be comfortable with Chinese business interests. Mr Brown and Mr Rowntree are the co-owners of Tournament Parking. Last year, the Commerce Commission opened an investigation into a proposed deal for Wilson Parking (whose parent company is based in Singapore) to buy 60% of Tournament's assets.

In his comments on The Nation this morning, the mayor appeared open-minded about the process to manage the sale, although he suggested it might be protracted.

“James and Simon’s offer expires at close of business on Friday and they will not participate in a protracted process.  This matter will need to be resolved this week,” the spokesperson said.

Comments and questions
10

Theres probably a first right to purchase from the owners the Council purchased the property from.

The property is likely to generate a net return greater than the cost of Council debt, and shouldnt be sold.

Council should not do what this National Government has done with the Power Company sales. Carparking are core assets. Private companies rarely develop them, because the land value generally demands a higher use. Dont let private interests exploit this position; pun intended.

If Council want to sell anything here, it should be the air rights.

Does it generate a net return greater than the forecast cost of Council debt?

Opinions without that fundamental fact are worthless. There appear to be plenty of them.

Great deal - no marketing or agents costs. Cash unconditional.

If a steal there'll be a queue to buy at $76

Carparks are not core council business

Come on people, do you really think $75m is the best offer? The asset should be open for others to tender for. Auckland Council and the Mayor would be wise to see what others are prepared to pay for this asset.

With the opening up of the leasehold land across the bridge near ASB, Fonterra,Viaduct Events Centre the rich Chinese lady's proposed $200 M leasehold hotel and so on quite where is one meant to park ? .....I know - back on freehold land in downtown !!

Now if purchase price is $75,000,000 and there are 1900 carparks that's what just under $40,000 a carpark - with debt on site easily serviced by " get an Aussie bank working for you "...then it sounds pretty bankable and quite a full offer at first glance.

Next will be improved technology - photo your rego - pay by smart phone etc.

And then to top it all off whack those who overstay their welcome say $80 per infringement ( CPI adjusted ) and to motivate the car park late ticket enforcers put them in a nice uniform and on some form of commission based package so the more late tickets they issue then an extra $20 here and there.

As the maxim goes you can take accommodation out of the city but with a bridge and tram or trichshaws you can't take the Parker too and I'm not taking the Mickey

Those Tournament boys are smart operators and since the days of spotting an opportunity with Transit NZ and university goers parking requirements back in their BCom days, to taking what 40% of Wilsons business off them over the years, then selling it back to them it is safe to assume that there will be upside and considerable strategy underlying their offer to treat our local authority super city.

Real question however is how does this impact on Council's own debt and servicing obligations, cash flow and reporting requirements ? And it's not just this deal in isolation but impact of Council flogging off our income producing assets and how this is perceived by not only Council's bankers but all relevant stakeholders including of course ratepayers. So discussions between His Worship, the CEO and CFO would be worth observing. But hey when the inner city train loop is finished those train tickets might service the debt ...yeah right ?!?

Will this deal result in interim rates relief for Auckland City ratepayers ? Hahaha - bring in the Poll tax !!

The Tournament boys' meeting with the mayor to discuss the offer is going to go along the lines of this:

"Our offer is open to acceptance until this Friday. We are not going to be involved in a protracted process for the Council to use our offer to attract a higher one from another buyer. We believe our offer is fair and reasonable and indicative of the market value. It is straightforward and confers certainty with finality. None of this airy-fairy 'Due Diligence' 'clause, which is an 'Option to Buy' in disguise. If the Council wants to hold out for a higher offer past our deadline, that's fine, but we won't participate in any further negotiation beyond Friday. And if it transpires the Council can't elicit a higher value after our expiry date and wants to revisit our offer, it won't be at this price; it will be at a lesser value.
Thank you for your time Mr. Mayor and have a nice day.

Carparks sell for between $75k and $90k in the CBD. This offer values the individual parks at $39k.

OK. So we call all expect a "Storming of the Bastille" type of rush from other developers to get their higher offers in?

This price may or may not be fair. But the real point is what might happen if the offer was accepted. Would there not be a mad rush from every property developer in town to start making unconditional bids on the council's assets?

It would be a total and utter shambles, making a mockery of due process.

Why doesn't the council do what the Chinese do? If they need some cash just sell these assets leasehold, so they aren't gone for good. We all know property long term in such strategic areas will become scarce and keep going up in value.