An independent market valuation is being sought for Wakatu Square, which is likely to be higher than the price agreed to by the prospective purchaser, says Nelson Mayor Aldo Miccio.
The council three weeks ago announced the proposed sale of 3056 square metres of land in Wakatu Square for a retail development by Windermere Holdings for a new Farmers store.
Mr Miccio said the difference between rateable and market value, which could be up to almost $800,000 higher than the $2 million on offer from Windermere Holdings (WHL), might have to be waived if the "public good" of keeping a big retailer like Farmers in town outweighed the financial gain from the land sale.
The council planned to repay debt with the proceeds of the planned sale, which is currently the subject of a public consultation process.
Head of the Auckland-based development company, Paul Smith, said yesterday the company had at this point entered into a provisional sale and purchase agreement to acquire the Wakatu Square land.
Mr Smith said if the council wanted to amend any terms after the public consultation process, that would be assessed by Windermere at the time.
The council has released its report on the details of the proposed sale, previously discussed in confidence, in which WHL said there was "some elasticity" in its offer.
The council report also notes a risk that land within Wakatu Square was contaminated, along with land at the western end of the site to be formed into car parking if the development went ahead.
The decision to make the report public followed a heated meeting last week, attended by about 60 members of the business community. It was facilitated by inner city promotions group Uniquely Nelson, and was aimed at conveying aspects of the proposal and reasons around the council's decision to sell the land.
The strongest challenge came from governing director of Gibbons Construction, Roger Gibbons, who said the council's pathway was already biased towards the Windermere proposal, despite it still being subject to public input.
Nelson lawyer Nigel McFadden was equally fervent with his questions about correct process over car parking provisions and an agreement on the sale price.
The proposal aims to be "parking neutral", meaning the same number of car parks available now has to be provided. Any fewer and WHL would have to compensate the council to fund replacement parking near the central city. The council said the land made available by the demolition of the Hub in New St was an option, providing up to 36 car park spaces, which could accommodate the 26 council vehicles which now park in Wakatu Square.
Mr Miccio conceded the $2m sale price announced remained subject to a market valuation, at which point the council could pull out of the deal. He hoped the full report on the proposed land sale, with all the history and details, would help people make an informed submission.
He said the threat to the central city if Farmers was to leave was outlined in the Heart of Nelson strategy in 2009. The large retailer has for some time been searching for a new site in Nelson, partly because its current operations across two locations was not ideal. The lease on its current premises in Trafalgar St was due to expire in 2015.
Farmers had indicated if it could not relocate to a new central city site it would seek a new location outside the CBD, possibly at the planned Nelson Junction retail development.
Mr Miccio acknowledged the concern expressed about the land's potential value.
"The council may choose option four [do nothing and keep the land] if the difference is too great, and if the value of the public good of keeping Farmers in the city is not enough.
"Nothing has been decided in advance, everything is still on the table."
Mr Miccio stressed the council did not intend to subsidise the deal by way of a financial input. It would have to decide if it wanted to sell the land for a cheaper price than the market valuation, in order to keep a key retailer in the city.
He said new retail development in Richmond threatened to siphon business from Nelson.
"All four options are still on the table, but my view is that it's critical that Farmers or someone else needs to be the anchor tenant, and we need it quickly."
The full report if available in the council's customer service centre, Nelson Public Libraries, and on the council website. Residents can have their say during the current consultation process which closes 5pm on September 9. Hearings for submitters will be on September 12.
1990 Wakatu Square car park created on land formerly the Wrightcars site.
1993 Negotiations begin with Woolworths, but fail to proceed when the company was unable to buy additional private land it wanted.
1994 Council releases first draft inner city strategy, proposing a new parking square, including possible built development. Approach confirmed in 1995 after public submissions.
2002 The council sells a 30-metre strip of land fronting Trafalgar St, along with part of Achilles Ave for a retail and office development [now the site of FVM building].
2007-08 Expressions of interest invited for a multi-storey car parking building. Two proposals received included retail development.
2009 Heart of Nelson strategy proposes Wakatu Square as a future site for a large retail development.
2011 Council buys former Hunting & Fishing building site in Wakatu Square and neighbouring Hunter Furniture property as "strategically located land".
2013 Windermere Holdings seeks to buy land in Wakatu Square to develop new building for Farmers and small retailers.
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