Corporate welfare or visionary? The secret Reading Cinema deal dividing Wellington

In the middle of last year, Wellington Mayor Tory Whanau needed a win.

She was being criticised for absences from civic functions, she claimed she was booed and heckled at a residents’ association meeting to the point she said “f*** that was rough” on her way out, and voting blocks were hardening around the council table.

She hinted she had a win up her sleeve in the form of an upcoming announcement about the Reading Cinema building on Courtenay Pl which has become an eyesore since it closed in 2019 due to an earthquake risk.

Eight months later, an announcement on Reading Cinema is yet to be made and Whanau needs a win now more than ever after her personal life went on to become a distraction last year.

However, the impending announcement of what has been labelled a “secret deal” has already soured to some extent after details of it were leaked - fuelling public suspicion and aggravation.

Whanau has learnt the hard way that secrecy can often be worse than the secret itself.

What is the deal?

In October 2023, the council met to discuss just one item on the agenda, titled “city activation project”.

It was recommended this subject be discussed behind closed doors to allow the council to carry on negotiations, including commercial and industrial negotiations, without prejudice or disadvantage.

“City activation project” is the code name for Reading Cinema.

Not all councillors agreed the deal should be discussed in secret, but they were overruled by their peers.

Nicola Young was one of several councillors who argued they needed to be open.

“I’m concerned that we are losing all credibility with Wellingtonians because of the unexpected happenings such as the Town Hall cost blowout.”

The day before it had been revealed the cost of earthquake-strengthening and redeveloping Wellington’s Town Hall has rocketed from $182 million to a possible $329m.

It didn’t take long for details of the meeting to be leaked to the media.

It emerged the council was planning to buy the land underneath for $32m which the cinema chain would use to strengthen and reopen the building and later have the option of buying the land back at the sale price.

A debate has raged ever since over whether it’s appropriate for a cash-strapped council to be funding Reading’s multi-millionaire owners to fix one of the city’s most common gripes.

Who leaked the information?

The following week, Whanau decided to launch an independent investigation into five of her councillors after receiving a code of conduct complaint from deputy mayor Laurie Foon, alleging they breached confidentiality.

The councillors were Nicola Young, Tony Randle, Ray Chung, Diane Calvert and Iona Pannett.

Whanau appointed high-profile lawyer and former journalist Linda Clark to undertake the probe.

Clark found there was insufficient evidence to identify who leaked the confidential information.

High-profile lawyer Linda Clark's probe cost the council $43,000. Photo / Michael Craig

But Clark did find the councillors had breached the council’s code of conduct.

The resulting recommendations were hardly the public telling off Whanau may have hoped for in a bid to draw a line under bubbling tensions.

Clark recommended a copy of the council’s code of conduct be provided to all councillors for review, training on when it is appropriate to withhold information from the public, and a private workshop to discuss the complaint and air grievances.

The probe cost $43,000 and further aggravated the different personalities around the council table.

What’s the latest?

The council is again meeting to discuss the “city activation” project tomorrow.

This time it’s a notice of motion by Pannett to revoke decisions the council has made on the cinema.

No information about the motion has been provided in the agenda and council officials have recommended it be considered in a public-excluded part of the meeting

But not a single councillor the Herald has spoken to completely agreed it should be discussed in secret, easily giving Pannett the majority she needs for a vote to have it play out in public.

Even Whanau was supportive because of “ongoing misinformation” but she still thinks Wellingtonians will be happy with the deal.

Councillor Tim Brown summed up the situation well when he said the confidentiality of the deal has materially increased public suspicion and aggravation about the council.

He said it might have been viable to hold information about the deal in confidence for a few weeks but not several months.

Georgina Campbell is a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.