Allan Young (left) of Eke Panuku with developer John Love of Civic Lane and Love & Co at The CAB apartments. Photo / Dean Purcell
Allan Young (left) of Eke Panuku with developer John Love of Civic Lane and Love & Co at The CAB apartments. Photo / Dean Purcell
A manager from Auckland Council’s property arm, Eke Panuku, says a developer’s company is not yet due to pay $3 million for the ex-Civic Administration Building, even though it is eight years after the initial deal was struck to sell the block in 2016.
Allan Young,Eke Panuku development general manager, said under the terms of the deal, developer John Love’s Civic Lane didn’t have to pay the money yet for the land and the building, rebranded The CAB.
The 18-level office block has been converted into apartments. The penthouse asking price is $16.5m.
“The $3m for the purchase of the site that we’re talking about here is not due and contractually payable until the agreement that we have with Civic Lane Ltd is actually complete,” Young said.
“That $3m is not currently due. We’re very comfortable with the contractual obligations and the relationship we have with John,” Young said.
Love, who undertook New Zealand’s largest office-to-apartment conversion, predicted it would be “24 to 28 months” before more apartments were sold, enabling him to repay his mezzanine funder, Australia’s Qualitas.
Only then, when he had repaid the money borrowed, would be he able to repay Eke Panuku its $3m, he said.
Love said he had currently borrowed $70m from Qualitas on the 114-unit CAB project, which had cost “over $150m”.
He had previously borrowed from the ANZ and an offshore listed property fund, but that debt had more recently been replaced with lending from Australian mezzanine funder Qualitas, he said.
The CAB is now apartments but it was Auckland Council's headquarters and is a heritage-listed building. Photo / Alex Burton
On February 24, the Herald reported how he was still to pay the $3m, even though it was seven years after the initial deal and all building works were completed.
Councillors John Watson, Christine Fletcher and Mike Lee have been highly critical of the deal calling for the $3m to be repaid.
Eke Panuku chief executive David Rankin told the Herald last month that under a deal struck in 2019 for Love & Co to get mezzanine finance for the project, “we are in the queue behind the financier”.
So the repayment date of December 2020 for Eke Panuku to get the $3m owed was deferred until the financier was fully repaid, Rankin said.
Only then will the council get its money.
Love said on February 28 that he had 18 apartments yet to sell, including the penthouse and two sub-penthouses.
“We present something of absolutely the highest quality. We don’t skimp on the details and we use a fully New Zealand-dedicated construction, design and build team for it,” he said.
Part of the project included the Mayoral Dr retaining wall “so that saved Auckland Transport in the region of $20 million because that retaining wall had come to the end of its useful life and needed to be remediated. We said we’d do that work because we had to build a new wall for our basement. Anyway, we worked to make sure the wall we built would be a 100-year wall”, Love said.
The master bathroom within the $16.5m penthouse of The CAB. Photo / Alex Burton
Ratepayers were therefore ahead, he added.
Few people understood the challenges of what had already been achieved, particularly with removing asbestos from the old building and replacing every floor.
“So it was a very, very complex development. We had such high-quality funders willing to put money in behind my own wife and I’s equity that we’ve invested in the project as well.
In 2019, the Serious Fraud Office cleared Auckland Council’s development arm over the $3m sale after John Tamihere questioned the deal to sell the building and surrounding land.
The CAB - what happened when
Address: 1 Greys Ave, Auckland CBD;
1966: Civic Administration Building built, city’s tallest at the time, designed by Hungarian emigrant Tibor Karl Donner;
2014: HQ vacated by Auckland Council;
2016: Expressions of interest campaign to sell: three offers. Civic Lane only party offering money;
2019: Title of building transferred to Civic Lane, $3m due by December 2020;
2020: Pandemic struck, work stopped, new deal struck for funder to be repaid, then Civic Lane to pay council $3m.
February 2023: penthouse and two sub penthouses yet to be sold plus 28 out of 114 units remain unsold.
24 to 28 months from now: Love expects to have sold all units, repaid the funder and will pay Eke Panuku $3m.
Anne Gibson has been the Herald’s property editor for 24 years, has won many awards, written books and covered property extensively here and overseas.
