The Waiwera enigma: Feeling the chill

Waiwera Infinity Thermal Spa Resort north of Auckland. Photo / Greg Bowker

People behind the increasingly tired hot pools complex at Waiwera hint there are better days to come but the locals are more sceptical, writes Geoff Cumming.

It's a quiet Monday at the Waiwera Thermal Pools; the movie pool where thousands of Aucklanders have romanced or unwound is closed for cleaning and the smattering of guests have the run of the other outdoor pools.

With no kids queuing for the waterslides, the silence is as contemplative as the native bush curtain surrounding the complex, softening the atmosphere. It's tempting to adjourn to the day spa where the chill-out music is as soothing as the mineral waters which have drawn visitors here since the 1840s. With its massage rooms, sauna, private spas and gym, the day spa isn't high-end but it's more than comfortable.

Visit on a weekend, says pools manager David Kidd, and it's heaving with kids coaxing parents for one last slide, picnickers under gazebos and groups firing up barbecues.

"I acknowledge we are getting tired and the place needs a drastic makeover but it still draws the punters," Mr Kidd says. "It's the water - it's almost iconic for Aucklanders. We are doing our level best to obtain funding for a major upgrade.

"With new slides this place could be a goldmine, but they are not cheap."

That means convincing Waiwera Group owner Mikhail Khimich the hot pools have at least some of the potential for world domination he sees in his Waiwera bottled water and Waiwera Spirits (vodka, gin and rum) ventures.

Black Death, the most scary ride, was mothballed last November due to cracks, leaving two thrillseeker rides for the more adventurous. But after some health and safety issues a few years ago, the venue looks in good order and Worksafe NZ is not aware of any current issues.

Mr Kidd says the biggest challenge for the day spa is competition in Auckland and nearby Orewa. It seems time-pressed Aucklanders aren't buying into the legendary rejuvenating qualities of the Waiwera geothermal waters.

Former Waiwera employees say Mr Khimich was always lukewarm about the hot pools - his interest was in growing the Waiwera Artesian Water business which takes up a chunk of the site. Then his focus turned to sending vodka to Moscow and the potential for other Waiwera spirits at the premium end of the market.

Mr Khimich says he is committed to all three businesses. "The Waiwera Thermal Resort is fundamentally an excellent facility with great potential."

Group chief executive Lloyd Brown is more measured than Mr Kidd but hints at better days.

"There are discussions under way that will entail a major upgrade. We have concentrated on the water and spirit companies for the last couple of years but there are negotiations under way that will result in significant changes for [the pools] facilities."

That can't come soon enough for locals who've watched schemes for Waiwera come and go like the tide.

Across the road at Woody's bar, owner Kerry Wood says locals' eyes roll when they hear of the next big plan. Last decade, after former hot pools owner John Brown (no relation to Lloyd Brown) expanded his Waiwera property holdings, plans for a 235-room hotel and apartment block fell through when developer Dan McEwan went bankrupt. Since then, motels have been converted into apartments and the closure of the camping ground means camper vans have nowhere to stay.

Mr Wood says turnover has halved in the past five years and he will bail out when his lease expires next year.

He was unaware of Mr Khimich's aborted plans for the old camping ground at the southern end of the bay - a five-star lodge with spas, villas and apartments - nor the mooted "master plan" redevelopment of the town with a new main drag, marina and ferry wharf.

But when the beachfront camping ground changed hands in a mortgagee sale this year, it was no surprise the new owner was property investor Retail Holdings. Since John Brown got into difficulties with the McEwan development, Retail Holdings has become the main beneficiary. It owns most of the main drag including the hot pools and bottling plant site, the adjacent carpark where the hotel was planned, the Woody's Bar site and mini-golf venue next door.

Now it has the holiday park.

Retail Holdings' owners Haydn and Mark Staples made their name in retail developments, notably in Newmarket, and these days have considerable holdings, including the the Mission Bay and Paihia beachfront strips.

Chief executive Rob Marshall says they have no firm plans for Waiwera but hints that a "master plan" redevelopment could emerge.

He says the plans are quite distinct to Mr Khimich's proposals. "We are not relying on any of the work he did but we have a good relationship with Mikhail, our leaseholder."

Mr Wood isn't holding his breath. "I'm sitting on a dead duck."

Money-making schemes stretch back to 1845

The Robert Graham Institute for Water Research.

In his Overseas Investment Office applications, Mikhail Khimich cited the Robert Graham Institute as just one example of the potential economic benefits of his NZ investments.

The institute was named for the original European developer of Waiwera's thermal resource who bought Waiwera land off Maori in 1845. Local iwi termed the hot springs Te Rata, The Doctor, which surfaced on the beach when they dug in the sand.

Graham built a magnificent hotel and opened a sanatorium which drew visitors from Europe and Aucklanders by daily steamboat to take in the therapeutic waters. The mineral water was first bottled in 1875 and marketed as Waiwera Seltzer. When Khimich took over at Waiwera, his team sought to capitalise on this heritage in the marketing of Waiwera Water and his Waiwera Spirits business.

The website of the Robert Graham Institute calls it an innovative project of a national significance - "unlocking New Zealand geothermal water potential for further development of hot-bath health resorts for the benefit of the New Zealand economy. The objective is to further develop New Zealand as an international destination for national geothermal spa tourism".

Last updated in October 2012, the website says the institute is "looking for sponsorship funding (i.e. grants) from the government and funding agencies, organisations, trusts, philanthropists and individuals who are interested in further developing the country's hot-bath health culture and who would like to take part in this exciting project to make New Zealand ..."

As CEO, Khimich employed Alexander Kouzminov, a Russian with experience in water regulation. Kouzminov also had a background with the KGB, working for a secret cell which developed biological weapons, the Herald on Sunday reported. He later revealed all in a tell-all book.

The Robert Graham Institute appears to have garnered little support or been able to forge research alliances with tertiary institutes, another stated aim.

In May 2012, Kouzminov recorded a breath alcohol reading of 956mcg of alcohol per litre of breath when caught driving erratically on Parnell Rd, the newspaper reported. He claimed he thought he was being followed and tried to use counter-surveillance techniques learned while working for Russian intelligence.

He was convicted of drink driving in November 2012. But the conviction was overturned in January this year after a district court judge was told the conviction would cost him his job.

Kouzminov was a consultant for several foreign intelligence agencies, his lawyer said. Colleagues swore affidavits stating he would be unable to travel at short notice to countries such as Canada if the conviction stood. He would also lose his job at the Robert Graham Institute.

In overturning the conviction, Judge David Burns said Kouzminov's breath alcohol reading was very high but "the spectacular fall from grace" of losing his work would be too high a price to pay.

In June this year, Kouzminov resigned from the institute.

Waiwera Group CEO Lloyd Brown said the institute was on hold following Kouzminov's resignation.

The series

Saturday: Mikhail Khimich: promise vs delivery.
Yesterday: Khimich's Waiwera plans and the Overseas Investment Office.
Today: Where to now for Waiwera?
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