Ratepayers get added protection in Hundertwasser project

Whangarei District Council has moved to be able to step in before the Hundertwasser project's underwrite is exhausted. The gallery will be built behind Te Kakano, pictured here. Photo/John Stone

An extra layer of safeguarding is being added to protect ratepayers in the case of the Hundertwasser project failing.

As part of the terms which got the Hundertwasser Art Centre with Wairau Maori Art Gallery over the line, Whangarei Art Museum Trust had arranged a $2 million underwrite for the project's first 10 years.

Whangarei District Council have previously said they would seek the ability to step in and potentially close the operation well before the underwrite is exhausted.

That has now taken some formal shape, with the council moving to add some new clauses to the Agreement to Lease which allow the council to wind up the project before the accumulated losses reach $2m.

It would mean no residual losses fall to Whangarei ratepayers from commitments made before the Hundertwasser Art Centre with Maori Art Gallery is wound up, such as insurance, staff wages and service contracts.

Under the provision, if within the first 10 years, the accumulated losses reach $750,000 the council may cancel the lease, if the accumulated losses reaches the $1.2 m mark, council will cancel the lease.

Essentially, the council would be able to put the Trust on notice, and would be able to initiate the 'wind-up' process at a lower level of losses.

Prosper Northland Trust chairman Barry Trass said he could understand the council wanting to be cautious and cover any risks they perceived.

"But I don't think it's ever going to get to that point."