Photo / Colliers International. Herald Graphic
Developers have paid more than $100 million for the old Caughey Preston rest home site in Auckland's Remuera, leaving the Caughey Preston Trust to rethink its future. Jane Phare reports.
A private consortium of developers who have paid more than $100 million for a rare chunk of land on Remuera's northern slopes won't be starting work any time soon.
Although the sale of the 3.1-hectare Caughey Preston rest home site went unconditional during level 4 lockdown in April, full settlement is still a year away.
Secrecy shrouds the identity of the consortium that has bought the site. Neither Colliers International, who brokered the sale, nor Andrew Caughey, chairman of the trust that owns the rest home, would reveal the identity of the buyer nor the price.
However, Caughey did say that the Caughey Preston Trust board was pleased with the price achieved which was more than a private valuation done at the end of last year.
Sources confirmed the sale price for the site, which has entrances off Upland, Ventnor and Lucerne Rds, was more than $100m and that one of the investors is believed to own a medical business.
The mixed housing suburban zone allows for medium-density housing – up to three dwellings per site - with a height restriction of about two storeys. Any deviation from that, either higher density or increased height, would be subject to resource consent. The site is also subject to volcanic view shafts, protecting view corridors to Auckland's maunga like Ōhinerau/Mt Hobson.
Colliers said the purchaser intended to develop "a comprehensive, master-planned residential project" on the site.
The sale marks the end of a 70-year era for the Caughey Preston rest home. The original trust was set up after the death of pioneering businesswoman and philanthropist Marianne Caughey Smith Preston in 1938. The Irish migrant left most of her self-made estate to provide care for women who were "infirm, aged or those suffering hardship".
Caughey, who is also managing director of department store Smith & Caughey's, said his great-great aunt opened a small drapery business in 1880 on the corner of Queen and Wakefield Sts. She was later joined by her husband and brother to form what would become Smith & Caughey's.
Initially the trust ran a home in Ponsonby for disadvantaged women of all ages. The Remuera site, including the original Upland Home, was bought in 1950. The women residents established vegetable gardens and largely looked after themselves.
"They were perfectly fit and able but they were poor and they had nowhere to live, so it provided accommodation for them," Caughey said.
Since then the direction of the trust had slowly morphed into aged care for women. At the time there was a "huge gap" in social services and care for elderly women, Caughey said. "But a lot has changed in the past 50 years. We feel there is greater need in other areas."
Some years ago the trust successfully applied to the High Court to have the terms of the trust altered to include men. After the closure of Caughey Preston, the trust went back to the High Court two years ago to clarify the terms of the deed.
"We can actually work in any one of those areas (old, sick or poor) or any combination of that, and the court confirmed that quite clearly," Caughey said. "That gives us quite a wide scope."
Tasked with honouring Marianne's intentions, Caughey said the sale of the site had opened the door for a "rebirth" of the trust. Aged care was unlikely to be its target in the future.
"There is so much need out there and that is probably going to be our problem, deciding which way do we go," he said.
"We're determined we want to make a real difference. We'd rather do it well in one area than try to spread ourselves too thinly."
To that end, the trust has commissioned The Centre of Social Impact to help decide on its next direction. The centre was set up in 2014 by Foundation North, the country's largest philanthropic foundation which was formed in 1988 with a $1 billion endowment from the sale of Auckland and Northland community's shares in the Auckland Savings bank to the Commercial Bank of Australia.
The centre advises both Foundation North and other foundations and philanthropic organisations wanting to work in areas of social change.
"We're very keen as a trust board to get back to doing something which is really going to benefit people who are incredibly disadvantaged," Caughey said.
"She (Marianne) did a lot of hard work with really disadvantaged people across all sorts of areas, not just aged care."
Options to the trust were wide open, he said. One was to support existing services rather than develop its own.
"We may decide to work in collaboration with somebody who is already an expert in that field, whereby we provide the money for the service and they actually deliver the service."
The trust deed still required the trust to provide some sort of accommodation with Marianne Caughey's name attached to it, he said. But the High Court was open to the option of having that aspect of the deed amended.
"I'm not suggesting we are going to do that at the moment but the option is always open for us."
After the rest home settlement next October, the trust will have a sizeable amount of money and income with which to work. It also owns 48 per cent of Smith & Caughey Ltd, worth more than $40m, and has substantial investments in stocks, shares and bonds.
"This trust is a perpetual trust so it's not going anywhere and it's going to be doing its work for many, many decades ahead if not forever," Caughey said.
The process of closing the rest home three years ago was incredibly hard on long-serving staff. Before it shut, the home employed nearly 200 staff and housed more than 100 residents who had to be re-housed, many going to retirement villages.
"The sad part was having to disturb the lives of the old people that were there, and for them to have to find other places to go." The rehousing was accomplished within three months, he said.
"But it was very, very hard on our staff, having to deal with the families. And the trauma of moving very fragile and frail people to a new facility was something that we did not like having to do."
But in the end, the trust was forced to act. A loss of $600,000 in 2015 rose to more than $1m in 2016. The buildings were old and the site needed extensive capital investment.
Rules regarding rest homes had become increasingly difficult, making it hard for not-for-profit operators to break even, Caughey said.
"The DHB contracts are very prescriptive. They control what you can charge per client, what your inputs must be, what your staffing levels must be, and there simply is not enough income to cover costs to give a high degree of care which has always been our goal, let alone replace ageing assets as they reach the end of their life."
The trust had seen many other not-for-profit aged-care operators close over the past few years for the same reasons.
In addition, trust board members worried that Marianne's original intentions had gradually been eroded.
In the meantime the trust is charged with maintaining the old Caughey Preston site and paying the rates which are $45,400 a year. Caughey visits the property each week to meet with the caretaker and admits it is sad to see the empty property.
"But give us another couple of years and we will have a new focus which is tremendously exciting."
How many people had paid deposits was not stated but pre-sales said to be 'strong'.