Blue Chip founder Mark Bryers has lost possession of a posh Remuera mansion after a related trust defaulted on its mortgage payments.
Bryers bought the leasehold property, which occupies a huge 1707m2 site on Auckland's Remuera Rd, through a family trust in August last year.
The trigger for the default appears to have been a sharp increase in ground rent to around $2400 a week by freehold owner Dilworth Trust Board, a charity which uses the rental income to fund Dilworth School, which has close ties to the Anglican Church.
The house was purchased with a $1.3 million mortgage to Boston Securities, which has taken possession of the property.
Bryers is not the only one hit by Dilworth's rent hike. A neighbouring property currently operated as The Devereux boutique hotel has also copped a rent increase - a move its owner said could lead to it being converted into a brothel.
Starline Group acquired The Devereux and 14 other properties from Bryers in a swap for Gulf Harbour Country Club north of Auckland.
Chief executive Roger Coulson said Starline had no interest in retaining the 15 properties; its intention was to on-sell them to realise the cash. It had done so for 12 properties on freehold titles but was stuck with the three on leasehold titles: The Devereux, an adjacent home unit, and an apartment in the Lighter Quay development at Viaduct Harbour.
He is not hopeful about the prospects of a quick sale for The Devereux either. The ground rent on the property has been increased from $36,000 a year to $82,000, which Coulson said wipes out its profits, making it difficult to sell as a going concern.
Coulson said the most likely outcome was that a buyer would turn it into a brothel - after all, the old mansion has seven bedrooms, each with an ensuite bathroom, and is hidden discreetly down a long driveway.
Trust general manager Martin Thomson said the permitted uses of the properties were determined by the individual leases. However, some of the leases permit anything allowed by city council regulations, and as Coulson points out, brothel keeping is now a legitimate business.
Meanwhile, Bryers has lost ownership of the Gulf Harbour Country Club, which was sold by its mortgagee to the club's members.
- © Fairfax NZ News
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