Calls for inquiry into Carisbrook deal

WILMA MCCORKINDALE
Last updated 05:00 16/02/2013

Relevant offers

Critics of the Dunedin City Council say millions of dollars in losses for ratepayers from the sale of Carisbrook should be included in an auditor general investigation.

The Office of the Auditor-General is investigating other property deals by council companies.

Russell Garbutt and Bev Butler, both critics of financial arrangements between the council and the Otago Rugby Football Union, say the losses incurred by ratepayers in the sale of Carisbrook require serious explanation.

The council has entered a conditional sale agreement to unload Carisbrook, which it purchased from the financially-ailing Otago Rugby Football Union for $6m in 2009. It paid $1m for adjacent housing owned by an Otago Rugby Football Union trust resulting in the council borrowing the $7m total package price.

The council is releasing few other details about the sale agreement but it is widely reported construction company Calder Stewart is the buyer, for $3.5m. The council had reportedly already sold half the car parking for $727,000 and the housing was sold some time ago for $692,000.

Ms Butler said she believed an investigation should be included in that under way by the auditor-general into council-owned company land deals in the Lakes District.

"Obviously there are some questions that still need to be answered in terms of the actual value of the Carisbrook property."

Mr Garbutt described the Carisbrook deals as "extraordinary".

"Only an independent and transparent investigation would reveal the facts behind why the DCC paid a total of $7m for the Carisbrook package when the market has revealed that the value of the package was about half that.

"And why did the DCC pay $1m for the houses and, very soon after, sell for a sum which resulted in a loss of $308,000. While a small disparity can be explained by market movements, these are major losses which the council seems reluctant to explain to the people who have sustained them."

The council voted to buy Carisbrook on a recommendation from then chief executive Jim Harland.

In the report, he cited the need for the union, which had borrowed $2m from the council and about $4m from the Bank of New Zealand, to be financially viable because it was to be the anchor tenant for the Forsyth Barr Stadium.

Former mayor Peter Chin said the $7m purchase was supported by a registered valuation. An independent valuer at the time gave Carisbrook a valuation of about $3m.

Ad Feedback

- © Fairfax NZ News

Comments

Special offers

Featured Promotions

Sponsored Content

Social Media
The Southland Times on Facebook

Subscribe to a digital replica of The Southland Times.

Digital edition

Subscribe to a digital replica of The Southland Times.

Click here to read our free community newspapers from around the region.

Community newspapers

Click here to read our free community newspapers from around the region online.

Southland Times subscriber news and information.

Subscriber services

Southland Times subscriber news and information.

Click here for information about advertising with The Southland Times.

Advertise

Click here for information about advertising with The Southland Times.