Canterbury health board chairman talking with buyers for buildings
The sale of Canterbury District Health Board buildings is being mooted to reduce debt.
Board chairman Murray Cleverley confirmed he is investigating the sale of buildings to reduce deficits caused in part by the need to set aside money to cover depreciation (wear and tear on buildings).
A PricewaterhouseCoopers (PwC) report released three days before Christmas forecast Canterbury district Health Board (CDHB) deficits of $38.5 million this year, $46 million in 2021, and $37 million in 2025.
PwC recommended staff "efficiencies," hospital service cuts, and selling buildings which the board could then lease back as a tenant.
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Cleverley said he was talking to several parties, but refused to confirm they included state fund manager ACC which has investments of $35 billion.
"[ACC is] always a potential investor. They're a logical option if we were going down this route."
He said the PwC report has not been discussed by hospital board members and nothing had been approved.
Cleverley was dealing with the matter because it was considered a governance issue and he was the spokesman.
Specific buildings for possible sale had yet to be identified he said, but another source said the new $72 million outpatient facility under construction opposite Christchurch Hospital was the main candidate.
The five storey outpatient building is due for completion next year.
Cleverley described the option of selling buildings as "just recycling capital", and said it was a strategy embraced by many organisations.
He was seeking a long term investment partner and hoped to make progress on options over the next four months.
However, decisions could be delayed by the lead up to national elections when governments were traditionally reluctant to make decisions, he said.
"We have a number of other [building] projects, and we have to make a business case for them and work out how we're going to pay for them."
Cleverley is a director of the Silverfin Capital property syndication company which last year bought the CDHBheadquarters at 32 Oxford Tce, and is leasing it back to the board.
Cleverley said he would not be involved in any future discussions with Silverfin Capital about the sale of board buildings because there would be an obvious conflict of interest.
After the sale of 32 Oxford Tce was announced last year, Cleverley declared a "perceived conflict of interest" to fellow board members.
Although he was a Silverfin director, he said the sale was handled by company owner and chief executive, Cheryl Macaulay, who was later appointed to the CDHB facilities management team for her property experience.