Napier hospital site sold

The large and deteriorating former Napier Hospital has been sold to the Todd Property Group for an undisclosed sum.

Proceeds from the sale of the site, which has been on the market since 2006, will go toward a much needed new $20m mental health patient unit.

Napier MP Chris Tremain said the Todd Property Group had sold land it owned at Ngunguru Spit in Northland to the Department of Conservation and had used proceeds to purchase the Napier site.

The announcement was made at Hawke's Bay Airport this morning by local MPs Tremain and Craig Foss, Napier Mayor Barbara Arnott and Hawke's Bay District Health Board chair Kevin Atkinson and CEO Kevin Snee.

None were able to say what the Todd Property Group planned to do with the site but Tremain said it was good news and a "shot in the arm" for the people of Napier.

Mayor Arnott agreed, saying the community had watched the site languish for years.

Tremain said the Crown Health Funding Agency, which had been handling the sale, will have raised $13 million from the sale of the site, which has been sold in various parcels since 2003.

It has cost the DHB about $4m in holding costs since 2003.

The DHB will receive $5.1m from the sale. The Ministry of Health will contribute $5 million toward the new mental health unit, leaving the DHB to raise $10m for the unit, which Snee said should be completed by 2015.

Foss said the success the DHB had in creating a $6.2m surplus this year had given the government confidence in making an investment.

Atkinson said the sale was as good as could have been expected regardless of when it had occurred.

He said he was delighted and "it's great news for the people of Napier who will now see development on a prime piece of Napier property and the proceeds from the sale will mean the DHB can finally begin to plan a new mental health unit".

A $20m sale of the site in 2006 fell over and was finally settled earlier this year after a lengthy legal battle between buyer Wellington developer Eyal Aharoni and the Crown Health Funding Agency.

Aharoni agreed to buy the five-hectare site and its 17 buildings, but later pulled out of the deal, claiming the agency had misled him as to the value of the site.

The dispute was settled out of court in a confidential agreement.

Snee said work would begin immediately on developing a new service model for the mental health unit, with an expected opening time of the new facility, in the 2014/15 financial year.

It was unclear where the new unit would be located and it may not be on the Hospital's Hastings grounds, he said.

"There is a lot of planning and development work to do to ensure we future proof a facility which will enhance and build on the service, which is provided to the Hawke's Bay community," Snee said.

"The mental health inpatient building has had a very poor image and it is the skills of the clinicians and staff who work there who have continued to provide a very good service to patients despite the poor facility," he said.

The Dominion Post