Tauranga City Council paid $14 million for 21 Bella Vista homes

Tauranga mayor Greg Brownless. Photo / File

The Tauranga City Council spent $14 million buying the 21 homes in the failed Bella Vista development at The Lakes.

After weeks of refusing to reveal the figure, the council confirmed todayit had paid $14m for the houses, offset by an insurance payment of $10.5 million, leaving a difference of $3.5 million.

It also announced it had signed off plans to salvage, repair, remove "and as appropriate demolish" the Bella Vista properties.

The council has previously cited the confidentiality of agreements negotiated with each homeowner - 20 settled in November, one settled earlier - as the reason not to reveal the total spending.

On Thursday, in response to a Local Government Information and Meetings Act request by the Bay of Plenty Times, the council said it had obtained approval from the homeowners and insurers to release the total figures.

The council refused to give specifics in response to a query about how the purchase price was calculated.

It said the final price was reached through confidential discussions at mediation with the homeowners rather than being calculated.

The council did not believe the confidentiality of the mediation process outweighed public interest in the question of how settlement numbers were reached.

Homeowners said publicly before the mediation that they wanted a market rate as if there were no defects.

Tauranga Mayor Greg Brownless said yesterday that several houses may be able to be fixed, and he was keen for the council to try to bring them up to high quality before attempting to sell them.

"We've got to try to get as much as possible from that. It's a hard job."

Brownless said he did not believe the stigma of the Bella Vista debacle would significantly affect the sales.

"There's a demand for properties ... once done properly, there will be no issue. There might be some leftover worry but not so much to be a problem, I think.

"I'm not downplaying the situation. It's bad. But ... we are well on the road to getting it right.

He said the council was trying to protect the ratepayers' interests and recover as much of the money it had spent as possible.

As of September 18, the council had also racked up costs of $2.8 million dealing with the Bella Vista fallout, including building, geotechnical and structural assessments, solution assessment, legal advice, communications, security, investigations and homeowner support.

Multiple sources have credited the council's new chief executive, Marty Grenfell, for bringing the negotiations, which started after the council voted in principle to buy the homes in June, to an end.

The council had an $11.5m provision in its annual report for the Bella Vista buyout.

- Additional reporting Kiri Gillespie

Buyout costs

Total cost of buyout: $14,063,353.80
Insurance payout: $10,550,000,
Remaining cost to ratepayers: $3,513,353.80.

Bella Vista timeline

• Nov 30, 2017: Bella Vista Homes went into voluntary liquidation, leaving behind unfinished houses and millions of dollars in outstanding debts to creditors

• Mar 9, 2018: Tauranga City Council orders emergency evacuation of 21 Bella Vista houses at The Lakes as a cyclone approached.

• Jun 6, 2018: Tauranga councillors voted in principle to buy the 21 homes after an independent report into what happens finds council failures

• Jul 26, 2018: The council makes an offer to the homeowners, which is rejected

• Aug 17, 2018: The council files charges in court under the Building Act against parties involved in the failed development

• Sep 3, 2018: MBIE announces an investigation into the council's handling of the matter

• October 10, 2018: The council announces an internal investigation

• November 1, 2018: The council settles with homeowners.