Crown offers below 2007 value
The Crown is poised to spend tens of millions of dollars by early next year to buy the first tranche of land tagged for central-city anchor projects.
Last week, the Christchurch Central Development Unit (CCDU) sent notices to the 47 owners of 104 properties that fall under anchor projects in its blueprint, outlining plans to take the land.
Property developer Antony Gough became the first landowner to settle with the Crown when he signed over his Poplar Apartments site on Madras St for about half its registered valuation.
Cutting his losses early would save money over time, he said. "If I let it go through to compulsory acquisition, they'll take my land, I'll continue paying rates, we'll argue the toss for two or three years, spend a lot of money on legal fees and still get the lower price," Gough said.
He warned against banking on 2007 land valuations after being told by his valuer to "get a reality check".
The 2007 land valuations for the 104 properties add up to about $75 million, comprising $22m for the site of the new bus interchange in Tuam St and $53m for a section of the northern and eastern frame. The two areas include the sites of the Pyne Gould Corporation building, Centennial Pool, the Orion building, and the former civic offices in Tuam St. They comprise about one-eighth of the properties the Crown plans to acquire.
The CCDU will base its settlement offers for the properties on current market valuations, factoring in recent sales, the condition of the land, insurance and location.
However, several landowners have voiced concern over the CCDU valuations, saying they are well below their own pricings.
If the two sides cannot reach a settlement, the CCDU can compulsorily acquire the land using its own valuation as the basis for compensation, although landowners have the right to appeal.
A CCDU spokesman said it was expected the Crown would own all 104 properties "by the early part of next year", but this would be behind the Government's initial timeframe for land acquisition.
Prime Minister John Key said at the blueprint's release in July that the Government felt it could "clear . . . up" all the settlements by March 2013.
"Negotiations are currently under way with many of these owners and are at varying stages," the CCDU spokesman said.
"The Crown expects to acquire over 800 properties and updates on progress will be provided in due course."
Commercial property lawyer Catherine Schache urged landowners to avoid compulsory acquisition if possible.
"There's . . . doubt about the mechanisms around how you might challenge," she said.
The Canterbury Earthquake Recovery Act prohibits challenging the compulsory acquisition itself, Schache said, only the amount of compensation.
Landowners could seek a judicial review, but that would not examine the Crown's right to compulsory acquisition, she said, or appeal to Earthquake Recovery Minister Gerry Brownlee.
"To some extent it will become a battle of the experts but a reasonable minister - and you've got to proceed from that basis, hearing valuation evidence on the one hand from the Cera-appointed valuers and the landowner's own - will then have to form a view on what's reasonable."
Acquisitions appeared to be going "quite slowly", she said. "Their timeframes keep moving . . . they were initially talking about November-December. Early next year, they'll be under ongoing pressure from people to just get on and get some progress."
Council-owned electricity network provider Orion owns land valued at nearly $10m in the block bordered by Manchester, Gloucester and Armagh streets. Chief operating officer John O'Donnell said the company was having "meaningful discussions" with the CCDU. He expected negotiations to be completed next month. "I think the outcome is going to be fine for both parties." The Christchurch City Council is the other big landowner affected.
The unit manager for corporate support, Sue Chappell, said negotiations were being treated separately to the rest of the council's blueprint work. "We understand the necessity to operate in a manner that preserves the integrity of the market and the council in terms of its property dealing."