Wellington City Council ends negotiations to reopen Reading Cinemas in Courtenay Place

Wellington City Council has ended negotiations with Reading International over a controversial deal to reopen the closed cinema complex on Courtenay Place.

The council had planned to buy the land underneath the cinema for $32 million, money which the cinema would use to redevelop the building.

However, senior council staff now say they have not been able to reach the best possible outcomes for Wellingtonians and the decision was made this week not to pursue the proposal further.

Council chief executive Barbara McKerrow said staff have worked extremely hard and “endured great pressure” trying to negotiate an arrangement.

“We always signalled that we would halt negotiations if we were not able to reach a formal agreement in a timely manner. We’ve reached that stage.”

The cinema building was closed in early 2019 after an earthquake risk was discovered and it has since become a symbol of the tired state of Courtenay Place - a street that has traditionally been a key part of the nightlife and entertainment offering in Wellington.

The deal to reopen it has sparked fierce debate over whether it was appropriate for a cash-strapped council to be funding Reading’s multimillionaire owners to fix one of the city’s most common gripes.

Mayor Tory Whanau championed the deal as a key piece in the puzzle to revitalise Courtenay Place.

She and elected members were briefed on the decision to end negotiations this afternoon.

The outcome was “disappointing, but the right one”, Whanau said.

The deal to reopen the cinema has sparked fierce debate over whether it was appropriate for a cash-strapped council to be funding Reading’s multimillionaire owners to fix one of the city’s most common gripes. Photo / Mark Mitchell

Whanau said she was elected with a mandate to create a vibrant city centre.

“A key part of that has been revamping the Courtenay Precinct, alongside delivering the Golden Mile, Pōneke Promise and Courtenay Precinct Plan.

“I’ve said many times that I supported officers to find a creative and innovative solution about what to do with the Reading building. However, I want to be very clear that this was never a done deal.”

Whanau hoped Reading would recognise the site had good potential for redevelopment.

“It would be heartbreaking for the site to sit unused for too long so I urge Reading to continue to explore development deals.”

What was the deal?

The council’s plan was to buy the land underneath Reading Cinema for $32 million based on a recent valuation.

Reading would then lease the land back from the council on a 21-year perpetually renewable lease.

Annual rent paid by Reading would cover the council’s costs, including that of borrowing, making it fiscally neutral to ratepayers.

Reading had the first right to buy back the land at any time within the first 15 years of the lease.

During the first ten years, Reading could buy back the land for the council’s original purchase price of $32m, meaning the council would make no capital gain on its purchase.

The council could then sell the land to someone else at any time after the first 10 years of the lease.

The deal included a provision allowing the council to only complete the agreement and pay the balance of funds to Reading once it was satisfied the new building design meets desired civic outcomes and has resource consent.

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.