Members of the public get their first look inside the City Rail Link tunnels last November. Photo / Sylvie Whinray
Taxpayers have so far forked out almost $170 million to buy central Auckland land needed for the City Rail Link metro, including payouts for essentially worthless underground land.
The big cash splash went mostly towards buying 51 plots of surface land and buildings, but also involved $13.3 million spent on the rights to an additional 58 tracts of underground land.
And those selling the underground tracts were likely smiling all the way to the bank.
That's because they were able to keep hold of their surface land and titles while receiving an average $229,310 payout per underground title.
The City Rail Link builders were forced to buy underground land where they planned to tunnel - even though they didn't need the surface land above - due to English common law precedent.
This ruled that New Zealand landowners didn't just own their property's surface land, they also owned a wedge of sky and earth stretching from the "heavens above" to the earth's molten core.
That led Rainey Law's property expert Jonathan Wood to call the payouts a "windfall", saying landowners would have been unlikely to sell or find any other use for the underground land had City Rail Link not come along.
"On one side, City Rail Link are getting properties for a relatively cheap price, but, on the other, the people selling that underground land would not have been able to make money from it anywhere else," Wood said.
Few Auckland commuters would likely quibble with the payouts either.
Recent damage to the Auckland Harbour Bridge when freak winds blew a truck into a support strut led multiple lanes to close for more than two weeks and brought Auckland's road network to a grinding halt.
The traffic jams that spilled for kilometres highlighted the congestion that had increasingly built on city motorways.
The $4.4 billion City Rail Link project aimed to tackle this by doubling the number of passengers city trains were able to carry.
Planned to open in 2024, it involves building 3.45km of underground railway together with new and improved stations.
Last month that led work teams to begin digging what will be the country's deepest train station at Karangahape Rd, where 217m-long platforms will be built up to 35m underground.
The Mercury Plaza - earlier home to a popular Asian food court - had previously stood on the site where the digging is now taking place.
By buying the property, City Rail Link Limited - the government agency responsible for the railway - gained the above and below ground rights to the site.
Now giant sheeting, "half the size of a rugby field" temporarily stood above where the demolished Mercury Plaza had once been, acting "like a silencer on a car" to reduce noise emanating from an access shaft being dug below.
Among other buildings deemed as being in the way of the K Rd station was an old Auckland tram that had previously been converted into a cafe and wine bar.
But instead of being demolished, the City Rail Link builders agreed to relocate the tram 2500km away to the Pacific Island nation of Niue, where its owner Rob Roughan had business links.
Elsewhere, one of Auckland's oldest pioneer homes - a Kauri weatherboard cottage thought to have been built up to 143 years ago - was relocated to the Waikato from Mt Eden where another major CRL station was being built.
By contrast, however, most buildings bought for the project ended up facing the wrecking ball.
This $168.8m buy-up of land had so far totalled 3.82 per cent of the project's overall $4.4b price tag.
CRLL would not reveal which parcels of surface or underground land were the most expensive to buy.
It cited "privacy and commercial reasons", saying releasing the information may "unreasonably prejudice" landowners still in negotiations for the sale of their properties.
Yet the land purchases were unlikely to be a total loss for CRLL.
Pete Evans from commercial real estate agents Colliers International said CRLL would likely resell some of the land to developers just before or after the project was completed.
CRLL would be able to command top dollar for the vacant blocks because of their high value as "development ready", inner city land close to future train stations, he said.
The underground land was different, however.
Evans said the value of underground land in the city usually lay in its potential to be converted into basement car parks.
But digging in rocky Auckland was expensive and car parks rarely ran more than two levels down, he said.
"The cost of building a carpark underneath your building gets progressively more expensive every floor you go down to a point where it becomes uneconomical," Rainey Law's Wood said.
This combined with CRLL's legal power to force landowners to sell land to them made it hard to accurately value underground land.
"You own a thing that has no value to you and someone comes along and says, 'I want to buy that thing from you, here's what I'm prepared to pay and I've got the ability to compel you to sell it to me'," Wood said.
"So you can imagine that means the values aren't gonna be great."
The one place where underground land might increase in value was close to where the underground rail network emerged onto the surface.
"Possibly where the trains are coming out at Mt Eden, where the actual tracks are closer to the surface, there may be an ongoing nuisance factor from vibration and that is more readily price-able," Wood said.
Either way, both CRLL and the landowners were likely to view the underground land sales as a win, he said.
"It is your classic willing seller, willing buyer."
Craig Johns has always had oil and grease running through his veins.
He grew up around cars, and later - together with wife Shayne-Louise - took over Crystal Motors, the mechanic workshop his parents founded in 1968.
But in October last year, big changes were afoot.
The Johns' were told they had to move out of their workshop, having earlier sold their land to City Rail Link Limited to make way for the new underground rail network's Mt Eden station.
"We watched our neighbours move out before we did, we were the last ones standing," Shayne-Louise said.
"For us, it was, 'oh my gosh, this is really happening'."
"Leaving a place you've become so attached to for a very long time, you have to adjust to that change and all the emotions it brings up."
The Johns' had been running their business from the Ruru St workshop in Eden Terrace for 17 years.
Yet despite the upheaval, they were happy.
"I can't speak for anyone else in the area, but we had a really good experience with City Rail Link," Shayne-Louise said.
"We owned the land and they offered us a really good market rate - and they also covered our expenses for moving."
After selling, the Johns' also continued on in their workshop as CRLL's tenants for another year and a half. But then CRLL told them it was starting redevelopment work and that they had to go.
Yet, by October last year, just two weeks before the deadline, they still didn't have a new place to move into.
They considered a warehouse in Mt Roskill, but would have had to close for two months to renovate it, something that "financially and cashflow-wise would not have been advisable".
Luckily, an old panel beaters workshop became available on Kingsland's New North Rd.
They moved in and Crystal Motors immediately did 30 per cent more business.
And despite the economic challenges from Covid-19, the business had continued to do well.
"We are on a main road now so we've got traffic going past us all the time looking in, and we are around the corner from VTNZ so if people fail their warrant there then they are coming to us for repairs," she said.
The only downside was that with appointments fully booked some of Crystal Motors' old customers now found it hard to book in as easily as before.
"Let's hope for all the people living in Auckland city that this whole City Rail Link will eventually be the success Auckland City Council has gone on about for all these years," she said.
• $168.8m spent buying land and buildings for the project
• $155.5m spent buying 51 surface land titles together with buildings
• $13.3m spent buying 58 underground land tracts at an average $229,310 payout
• $24.8m had since been written off the value of land bought by CRLL after the land value dropped due to buildings being demolished from the sites
• CRLL still has more underground land it needs to buy along with some "partial surface titles" that do not impact or require the existing landowners to relocate
• $4.419 billion to be spent on the City Rail Link project
• The CRL will have twin tunnels stretching 3.45km that are due to be completed in 2024
• Two new underground stations are being built. Aotea Station will be 11m below ground while Karangahape Station will be 33m below ground
• Transport authorities estimate the CRL stations will need to cope with 54,000 passengers an hour during peak periods by 2035
Eastland Port open for business again over the weekend after stormy weather.