Council pockets $37m as ACC buys lease fees
Hawke's Bay Regional Council has pocketed $37 million cash in return for the income stream generated from its leasehold properties, but it won't say whether the cash is to go toward the Ruataniwha dam.
Under an agreement the council has reached with the Accident Compensation Corporation, the council will retain ownership of its 613 leasehold properties in Napier, but lessees will pay their fees to the corporation over the next 50 years.
Napier's leasehold land dates back to the 1931 Hawke's Bay earthquake, in which 40 square kilometres of new land were uplifted from the Ahuriri estuary and wetlands. Ownership of the land went to the harbour board, then in 1989 to the council and Napier City Council. Residents and businesses pay the councils a fee to occupy the land.
A regional council spokesman would not say if the cash might go toward the proposed $265m dam scheme, in which the council has agreed to invest up to $80m.
He said the council had not decided how it would use the cash, but it would be invested "in key infrastructure projects that deliver long- term economic and environmental benefits to the region".
The council has previously encouraged lessees to freehold the land by offering discounts, and has said it wanted to reinvest in projects such as "potential water storage projects" and the Port of Napier.
ACC has paid $37.65m for the income stream.
There is no change for lessees or to lease conditions under this new arrangement. Leaseholders will continue to deal directly with HBRC for any queries relating to their leases, including freeholding and accounts. The properties generated income of $1,783,649 in the last financial year.
The annual income is expected to reach $3.6m by 2022 if none of the properties has been freeholded.
An ACC spokeswoman said the income stream provided "secure inflation linked long-term cashflows which are an excellent match with the long-term liabilities of ACC".
The Dominion Post