An interesting development yesterday as the owners of Tournament Parking turned up to the council with a check for $7.5 million as a deposit to try and buy Auckland Transport’s Downtown carpark for $75 million.
The operators of Tournament Parking have made a surprise offer of $75 million today to buy the downtown carpark from Auckland Council.
James Brown and Simon Rowntree made the unconditional cash offer of $7.5 million upfront with a settlement date for the remaining $67.5 million on July 1.
The downtown carpark has 1900 spaces and sits on prime waterfront land a block away from Queen St.
The offer includes a legally binding commitment not to increase casual parking rates above the rate of inflation for at least five years, and to maintain existing free public access from the carpark building to Customs St West, Lower Hobson St and Albert St.
The offer represents a $10 million premium over the current valuation of $65 million however it needs to be remembered that the last valuation occurred three years ago in in 2011. To put some perspective on things, Precinct Properties brought the Downtown Shopping centre in September 2012 for $90 million with the centre having council valuation of $75 million. That suggests the carpark offer by tournament is probably way undervalued.
But there’s another and probably even more important reason the council should not accept this offer. The site is listed as being one of the key opportunities as part of the City Centre Master Plan (CCMP). The plan suggests eventually redeveloping the site into other uses and creating public space outside tied in with the removal of the Hobson St flyover.
The Tournament proposal suggests locking the site in a state of suspended animation for decades which will do nothing to help the long term development of the city centre. As I’ve said here it’s a cheeky offer and undoubtedly it’s being made with the understanding the site will appreciate in value hugely as a result of the City Rail Link. In my view the council should fix the anomaly that sees them holding down the market on the pricing of parking, get on with the CCMP and over time redevelop the site away from its current use. After that time then it could be considered for sale.
What is positive is that we now even have carparking operators in Auckland calling the CRL essential. The chorus of people calling for it to be built keeps growing and that pressure can only help.