Port Nicholson Block Settlement Trust wants more than $10m for Shelly Bay
The Port Nicholson Block Settlement Trust wants to sell Shelly Bay for more than $10 million to generate much needed cash.
In December the trust announced it wanted to sell the land to The Wellington Company, which is headed by property developer Ian Cassels.
The Wellington Company deal on the table includes additional financial incentives for the trust such as a share of profits and first right of purchase of all residential and commercial property.
The trust is currently seeking support from Taranaki Whanui for the outright sale, with the independent voting process expected to be completed by February 9.
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Trust chairman Neville Baker said Shelly Bay was bought by the trust in 2009 and since then it had created significant losses.
The sale of Shelly Bay would prop up the trust by improving its cash position, he said.
"The trust recognises that at present it does not have the financial resources to develop Shelly Bay in its own right."
According to the trust, the current valuation of land was $9.85m and the trust had asked for offers above that price.
The new commercial arm of the trust, Taranaki Whanui Ltd, would move the trust in a better financial direction, Baker said.
It would invest Shelly Bay cash in commercial opportunities to deliver better returns.
Trust chief executive Jason Fox said the current financial status of the trust was "healthy" — it had no debt and $17.5m in capital.
According to the trust's 2015 annual report, an audit and risk committee was set up in 2013 to stop the loss in value of its assets, which had decreased from $31m in March 2011 to $19m in March 2014.
The report shows the trust recorded a deficit of $563,763 for the financial year ending March 31, 2015
Fox said the trust aimed to eliminate historic operating deficits and reverse the downward trend in trust capital.
In October, the trust started official negotiations to purchase Crown-owned Wellington railway station from KiwiRail and this was not conditional on the sale of Shelly Bay, he said.
No sale of other assets were planned in the short term.
The trust's 2015 annual report says part of the trust's strategic plan was to increase revenues by a more aggressive use of the "rights of first refusal".
There were also extensive Crown assets in the greater Wellington region such as Wellington Girls' College, the High Court, District Court, Archives New Zealand, Hutt valley High School, National Library and Ontrack/ KiwiRail properties available for sale and leaseback when the trust's finances improve, the report says.
The trust could also acquire and dispose of State housing stock to quickly capitalise and reduce the deficit, it said.
The Wellington Company's offer featured incentives that were not included in the special resolution, which the trust urged members to keep in mind when voting.
These included: partnership, a percentage share of profits, first right of purchase of all residential and commercial property, co-operation on all contract opportunities and respect for trust names and cultural attachment.
The trust did not come to its recommendation lightly and final decision was not for the trustees but for it's members to decide, Baker said.
If the sale goes ahead, it will enable Cassels to push on with plans to transform the former defence base into a replica of Sausalito – a wealthy and artistic enclave across the bay from San Francisco.
The value of Shelly Bay land was greater than 50 per cent of the trust fund, so required trust members to vote in favour of a special resolution.
Consultation meetings would be held for trust members to learn more about the offer, commercial and cultural incentives.
Meetings will take place at The Copthorne Hotel, New Plymouth on January 20 at 6:00pm and Waiwhetu Marae on January 27, at 10:00am.
A Special General Meeting announcing the voting outcome, will be held at Pipitea Marae, Wellington on February 9 at 6pm.