Council's million dollar legal bill for Westgate development

A library is yet to be completed in the Westgate Town Centre.
SUPPLIED

A library is yet to be completed in the Westgate Town Centre.

Auckland Council's legal battles over the Westgate Town Centre's development has cost ratepayers more than $1 million, while it postponed millions of dollars in payments owed by developer NZRPG.

The development was a project undertaken by council and the New Zealand Retail Property Group (NZRPG).

The former Waitakere City Council entered into an agreement with NZRPG in 2004 to start a working relationship to design and develop the town centre.

NorthWest Shopping Centre's new square opened in October 2016.
SUPPLIED/FAIRFAX NZ

NorthWest Shopping Centre's new square opened in October 2016.

Auckland Council took over from Waitakere City Council when the unitary council formed in 2010.

A Local Government Official Information Act (LGOIMA) request showed $1,151,950.63 was spent on external legal expenses by Auckland Council since 2010 on the Westgate Town Centre.

This included contractual negotiations that arose out of differences to original agreements, town planning issues and various disputes between council and NZRPG, the council said.

An artist's impression of the proposed Westgate Town Centre.
SUPPLIED

An artist's impression of the proposed Westgate Town Centre.

It said a large portion of the legal work had been done "in-house". 

The cost of this work could not be estimated as the in-house team did not generally record its time.

The legal expenses spent by Waitakere City Council before 2010 could not be found, the LGOIMA said.

Auditor-General Lyn Provost investigated the establishment and management of the new town centre after concerns were raised about whether costs had been appropriately shared between Auckland Council and NZRPG.

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The auditor-general found council had spent more than $70m on the development with NZRPG.

Provost found a disagreement had sparked between the two groups over how costs would be distributed, and when they would be paid.

The report said as of September 20 last year, NZRPG had only paid $3m of the $11.3m it owed the council after council decided to postpone the payments in 2012.

Council believed NZRPG making the payments would risk the project's progression, the auditor-general said.

Provost found the council purchasing Westgate Street, off Fred Taylor Drive, was a "strategic asset".

Council's $6m purchase of Westgate Street had raised concerns as developers usually wore the cost of constructing roads in new developments.

It would form part of the main road through the town centre and would be good for a public transport network, "an important part of the council's overall plan for the town," the report said.

A second LGOIMA showed Auckland Transport (AT) had spent over $145,000 on legal costs related to the development.

AT said this expense was largely for property transactions related to purchasing the land along Fred Taylor Drive.

Provost's report said it was too early to "definitively determine" whether council's overall vision for the development would be achieved, and what the ultimate cost to ratepayers would be.

Listed company Stride Property Group purchased land in the Westgate Town Centre for the Northwest Shopping Centre in 2013 for $25m.

Stage one of the mall opened in October 2015. Stage two which included restaurants and office space opened a year later.

A library and community centre is currently under construction.

 - Stuff

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