Council car park plan comes up short
A city car park ratepayers have sunk $11.2m into may be worth just $3m.
The Waikato Times understands the city council and bidder Kiwi Income Property Trust are at least $2m apart in agreeing a purchase price, with the higher valuation less than half what the city has spent since 2009.
Council bosses won't release their valuation of Hamilton's underground car park - believed to be barely half the $9 million council paid in 2009.
Since then another $2.23m has been spent refurbishing and building a new entrance, increasing operating costs and reducing its car parks.
The 2009 deal struck for the Garden Place underground car park had a rider in the deal to on-sell to Centreplace's Kiwi Income Property Trust.
The potential sale was last considered in July, when the council agreed to vary the sale agreement, extending the contract deadline for the sale of the carpark from just prior to the recent elections, until March 31, 2014.
Mr Bowcott said staff still intended bringing the car park back to council for consideration early next year, before the new end-of-March deadline.
The last valuation to be made public, from June 2012, put the property's value at $6.45m, however the Times understands that two recent valuations commissioned separately by KIPT and HCC were slightly above $3 million, and $5 million respectively.
City general manager performance Blair Bowcott confirmed a new initial valuation had been received but that it would be updated early next year.
"It is a draft, subject to further change and also commercial discussion with Kiwi, so the figures are not available for release," said Mr Bowcott.
He said both parties wanted the valuation to reflect the latest financial results and include future predictions for the operation of the car park.
Mr Bowcott said Centreplace had only just reopened, and the car park was now priced and configured to operate primarily as a shopper car park.
The numbers now circulating around the deal have prompted commercial property realtor Colin Jones to suggest retention may be the best option.
"It reflects the fact that they paid too much for it. At that sort of level I'd have thought council is better to bite the bullet and retain ownership."
He said three valuers could be 30 per cent apart on the same property.
The car park building, seen as critical to the CBD, has 458 spaces but its revenues have been declining recently from a peak of $693,000 in 2010.
Management have previously confirmed that it was possible under the agreement for the market value to be unacceptable to either party, and for the sale to be abandoned. Council could then retain or sell the building.
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