Judge's decision lets Maori take back complex

Ngati Whatua o Orakei Maori Trust Board chief executive Tiwana Tibble. Photo / Greg Bowker

Maori could repossess one of Auckland's most troubled apartment complexes if new ground levies are not paid, according to a High Court judge.

Justice Mark Woolford issued a decision on the strife-torn 230-unit Quay Park Grand Central Station in which he says owners defaulting on payments would give the Maori land owner entitlement to take possession of the entire property, he said.

"If Grand Central Station is not kept in good order, repair and condition, the lessor - the Ngati Whatua o Orakei Maori Trust Board - is able, in terms of the lease, to re-enter the land and terminate the lease. Everyone's investment would then be lost," the judge said this week.

Board chief executive Tiwana Tibble yesterday flatly rejected any prospect of a land grab of the complex, previously called the Railway Campus.

"We are a long way from having to intervene and we are confident the parties can work out a suitable arrangement between them. We do expect our asset to be looked after, as any landlord would. We are aware of this issue. We are not involved in this court action.

"The issues are being worked out between the parties involved in this court action and probably any comment from us at this stage would be unhelpful. Any details of tenancy arrangements are confidential between Ngati Whatua and its tenants," Tibble said.

Keith Brighton, once an owner of property at Grand Central, said an annual $3 million could be asked in ground rent but he had heard double that too.

"I understand that Ngati Whatua intend to extract the maximum possible. Apparently the original consent was for a five-storey building whereas the existing extension was to three storeys. Ngati Whatua intend to claim value based on five storeys so ground rent claim could be as high as $6 million per annum," he said.

The apartment complex has suffered many blows since it was developed a decade ago, including roof defects resulting in a $6.1 million fix, the University of Auckland terminating a lease agreement for student accommodation, empty units dumped on the market for low prices, then infighting between owners.

Anthony McCullagh, court-appointed administrator of the property and PKF Corporate managing director, agreed with the judge and said the situation was extremely difficult and the apartments had suffered many problems including leaks and now a difficult unit title arrangement, which the judge was resolving in the latest decision by confirming McCullagh's ability to restructure the unit plan and apportion fees and costs.

"Maori have a legal right to enter. If we were not able to get those orders from the judge, I would be frustrated legally and hand administration back to the body corporate which has been an absolute shambles. We now have to enter into negotiations with the iwi on the rental stream. We haven't got there yet," McCullagh said.

Ngati Whatua owns the site, divided into a 1.14ha lower level block and 1.08ha above.

Valuers for the board and Grand Central have submitted opposing documents. McCullagh said these showed widely differing views of the land's worth and he expects the matter to go to arbitration.

After a 15-year ground rent holiday, the board has begun charging leasehold ground payments on a $460 million 20ha block throughout the Quay Park area, including at the three big Scene apartment blocks, Vector Arena, Countdown, medical centres, office blocks, many hotels, shops, restaurants and other businesses.

Trevor Rands of Advance Property Group has warned for years about Quay Park ground rents skyrocketing and cited townhouse owners faced with the land payment added to high outgoings such as rates insurance.

"Therefore these properties are worthless. Underdeveloped sites will suffer the most. Every one will be pissed off, but then no one should own leasehold land. Wait until those [ground rent payments on] sites like the Scene apartments get published," Rands warned.

The board also wants about $1.53 million annually from 20 shop and apartment owners at 8 Quay St. The land is worth $25.2 million, the board says, and it is entitled to charge 6 per cent annually of the freehold worth.

GRAND CENTRAL
* 355 separate units.
* 230 apartments.
* 2 commercial units.
* 85 carparks inside.
* 38 carparks outside.
* Leaks cost $6.1m to fix.
* New roof on block.
* Empty for over a year.
* Now occupied by renters.
* Stands on a 2.2ha site.