Council purchases five sites to safeguard Central City redevelopment

8 August 2008

Christchurch City Council has purchased five properties from property developer David Henderson.

Christchurch Mayor Bob Parker says all five sites are extremely desirable and key to the success of the Council’s and the Greater Christchurch Urban Development Strategy’s (UDS) plans for urban intensification.

“Mr Henderson had put these properties on the market. We’re stepping in to buy the properties because all are vital to our plans to revitalise our city. Our plans for the city South of Lichfield could have been jeopardised totally if they were purchased and developed as tilt-slab, big box retail outlets,” he says.

“This Council’s plans for this part of the city align totally with Mr Henderson’s commitment to establish urban mixed use/residential development on these sites. The developments he has carried out in our city to date, including Sol Square and the Central City Lanes, are a wonderful asset to our city and have earned widespread acclaim locally, nationally and internationally.”

The sites we are purchasing are:

• The former Para property – two sites totalling 4095 square metres, one of which was purchased for $1.6 million and the other for $3.875 million. They  run the length of Manchester Street, between Tuam and Lichfield Streets. The properties are suited to high density quality housing or accommodation with ground floor retail and commercial activity.
• Welles Street Electrolux site – an 8210 square metre site purchased for $4.9 million fronting Welles Street, suited to high density residences developed around lanes.
• Penny Cycle – a 759 square metre site on the corner of Tuam and Manchester Streets purchased for $2.55  million, currently rented and returning around $177,000 a year
• Sydenham Square – a 9084 square metre site purchased for  $4 million on the corner of Colombo and Brougham Streets. Consents already granted for medium density live/work development. Already there has been considerable interest in this site for big box retail development, but it could now become a flagship for the Council’s urban intensification programme.

Mr Parker says the properties, all in key locations, consist of a large number of titles that have been purchased and aggregated by Mr Henderson over several years. Four of the five properties fit the South of Lichfield urbanisation plan, while it is desirable that the fifth, Sydenham Square, is used for a mix of residential and commercial space and not big box retail.

The Council has purchased the properties at their current market valuations, listed above, with the total package to cost $16.925 million. The purchase is being funded by an interest-only loan costing about $1.4 million a year to service. Mr Henderson’s intellectual property for each site (including plans and consents) are included in the purchase price.

Council plans to develop a Master Plan for the South of Lichfield properties it owns in the next few months which will protect the end use of these sites. The plan will address building form and urban design. Council will decide the development timetable for both the Sydenham Square and South of Lichfield properties.

Council will give Dave Henderson first option to buy back the land and develop it in accordance with the Master Plan as per the Council’s timetable.

The price to Mr Henderson would be the then current market price or what he sold them for, plus the Council’s subsequent holding costs – whichever is higher.

“We are paying a fair price for the properties to secure this land for the benefit of the city and its future generations,” Mr Parker says.

“This purchase is not budgeted for in our current Long Term Council Community Plan. However this Council is confident that it has made the right decision to purchase these properties, just as I am confident we can continue to deliver our LTCCP in the years ahead with rates at a sustainable level. It will mean prioritising our projects, but we are committed to keeping our annual rate rise under 5% while continuing to make progress as a city.”

Details of the south of Lichfield and central city revitalisation plans can be found on our website at www.ccc.govt.nz/centralcity.

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