Crown 'remarketing' sparks anger

KASHKA TUNSTALL
Last updated 07:07 31/10/2012
HOT PROPERTY: Part of this historical dairy factory has been sold by the Crown to a local property developer.

HOT PROPERTY: Part of this historical dairy factory has been sold by the Crown to a local property developer.

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A Waikato businessman is fuming over the way a Government department has managed the sale of a state-owned property.

Rocco Pienaar, who owns installation company PinkFit Waikato, missed out on buying a Hamilton property the New Zealand Transport Agency (NZTA) was selling on behalf of the Crown, despite making an offer more than $60,000 higher than what it eventually sold for.

NZTA confirmed the property at 15 Goodfellow Pl was sold this month for $156,000. Pienaar is considering lodging a formal complaint with Transport Minister Gerry Brownlee over the handling of the sale.

The property, previously known as 136 Norton Rd, is part of a listed historic dairy factory and was originally bought by NZTA for the Avalon bypass project but wasn't used.

Historic covenants on the building prevent demolition but consulting engineers informed NZTA that the building needed extensive earthquake upgrading and the cost would be significant.

In January the property was marketed for sale by CBRE by way of tender.

Pienaar saw the property was for sale while driving past and put in an offer with the intention of making it a warehouse for his company.

Three tenders were received and former CBRE agent Russell Smith confirmed Pienaar's tender offer of $218,000 was the highest of the three.

One of the other two tenders was made by Double R Limited, the company of property developer Roger Giles and wife Robyn.

NZTA said the tenders were assessed based on the property's original valuation at that time, before the February 2011 earthquake and before earthquake-strengthening requirements for the building were investigated, and were too low for NZTA to accept.

Pienaar was told by Smith if he increased his offer to $260,000 NZTA would recommend the Crown accept it.

NZTA confirmed that a revised offer was received from Pienaar's company but it was not accepted and in early May all three tender parties were informed the sale was cancelled.

On May 26, NZTA's newly appointed agents Colliers remarketed the property, inviting expressions of interest (EOI).

NZTA said the the EOI marketing was publicly notified and Pienaar would have had the same opportunity as any other applicant to see the advertisement and to put in a new offer.

But Pienaar said he did not see the notification.

Giles of Double R Limited said he was directly contacted by Colliers and notified that the property was back on the market and his company made an offer.

NZTA said offers from two parties were received and assessed based on an updated valuation.

The second party eventually withdrew its offer, failing to obtain approval to modify the building, and Double R Limited's revised offer of $156,000 plus GST, $62,000 less than Rocco Pienaar's original offer, was accepted two weeks ago.

"If I had known that the sale was back on, I would have made my original offer again," Pienaar said.

"It's a really non-transparent way of disposing of Crown land. It's ridiculous."

NZTA communications officer Kaye Whittle responded via email to Waikato Times' inquiries saying that the organisation was confident it met all its legal obligations under the Public Works Act 1981 which details the process for the sale of a Crown-owned property.

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"The agency has an obligation to act in good faith and follow an open and transparent process to ensure fairness and equity to all parties involved," she wrote.

Giles said he thought the "scaremongering" around the historical covenants and the expected earthquake upgrades were to blame for the issues around the sale.

"I think they were left with limited options but to unload it," he said.

Giles said he made a "tongue in cheek" offer to on-sell the property to Pienaar for $300,000, almost double what he paid for it.

Pienaar rejected the offer. A lease has been signed for the property with new doggy day care company Metro Paws, pending council approval.

- Waikato Times

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