Dave Henderson out, IT hub in

The Christchurch City Council has closed the door on bankrupt property developer Dave Henderson, opening up an opportunity for an IT hub in the central city.

Councillors voted to take steps to terminate a controversial property deal with Henderson at their meeting yesterday, shortly before approving a project that aims to harness the power of collaboration in the earthquake-hit city.

The council bought five central city properties from Henderson for $17 million in 2008, in a deal described as a "bailout" by critics.

The purchase agreement included a clause allowing Henderson's company, SOL Development Corporation, first purchase rights on the properties if it could meet deadlines to buy them back.

He did not exercise the purchase rights last year for the first of the properties, and was placed in bankruptcy in November.

A staff report prepared for the meeting said Henderson's property rights had been "extinguished" by his bankruptcy, meaning the agreement could be cancelled.

Councillors unanimously decided to terminate the agreement, but traded barbs over the wisdom of the initial purchase. Riccarton-Wigram councillor Helen Broughton said the property deal had been a "vexed issue" for the council. "It resonated badly with the public at the time, and has continued to do so."

Broughton, who opposed the initial deal, said Henderson's bankruptcy had given the council an "easy resolution" to the issue.

Hagley-Ferrymead councillor Yani Johanson said he had always doubted that Henderson would be able to buy back the properties. The council now needed to "make this land work" and ensure it was put to good use, he said.

Banks Peninsula councillor Claudia Reid defended the purchase, saying the sites would be an important part of the rebuild. "They will have an absolutely pivotal role in the re-emergence of the city ... we transformed one man's bad luck into good fortune for the people of this city."

Councillors had been "vilified" after making the decision, despite protecting "an important part of the urban landscape".

The council also decided to seek development proposals for the Sydenham Square site after staff received several unsolicited proposals from developers.

Henderson said last night the council still had other steps to go through before the deal could be cancelled.

"There is a proper process to follow, and I sincerely hope the council does that."

While he could not be directly involved in the properties, he believed other people involved in SOL Development Corporation still had interest in the properties and could develop them.

Henderson said he was happy to play a role in the development of the sites if asked. "I doubt anybody knows those properties better than me."

Another of the Henderson properties, the former Para Rubber site, on the corner of Tuam St and Manchester St, could house more than 400 IT workers after plans for a temporary business hub were unanimously approved.

The IT business group behind the project, Enterprise Precinct and Innovation Campus (Epic), has been given rent-free site use for three years, provided it can find funding for buildings.

The group, which includes 30 quake-displaced IT businesses, will set up a temporary hub while it seeks a permanent site to accommodate more than 700 people.

Epic co-leader Colin Andersen, director of IT consultancy Effectus, told councillors the temporary hub was "crucial" to keeping companies in the central city.

"If businesses can't find somewhere in the next four to six months, they'll be forced to sign up to eight to 10-year leases in places where they don't want to be." He said the group had already received interest from companies in Auckland and Wellington.

"Everyone has latched on, because there's a demand and drive [because of the earthquake] which is quite unique. Normally you'd have to go out and sell the idea."

The group had spoken to government agencies about project funding, and Google representatives would visit the city next week to advise.

Councillors were overwhelmingly supportive of the plan.

Fendalton-Waimairi councillor Jamie Gough said it was a chance for the city to look forward instead of dwelling on the past.

"We've all been hoping like heck that as a result of the earthquake we could grab an opportunity and be better because of it, and this is the first time since the earthquake I've thought that."

Gough said the hub could turn Christchurch into the "Silicon Valley of New Zealand".

Shirley-Papanui councillor Aaron Keown said the hub could produce "great jobs and great people", and would help bring the central city back to life. "We'll see a snowball effect; this will just grow and grow and grow."

Under the agreement, Epic has six months to secure funding for the temporary hub.

If it cannot find the money, the agreement will be cancelled.

The council will also help Epic develop plans for the permanent hub.

The Press