Councillors not told of a four year Lakeview consent extension in January 2025

Plus, how councillors have failed in a battle to remove sole delegated Lakeview powers from council CEO Mike Theelen

Analysis.

This investigation, funded by Crux paid subscribers, examines how a $2 billion Australian luxury property development in the centre of Queenstown started life as a “risk free investment” by the Queenstown Lakes District Council. In ten parts we will tell the story of how a large piece of ratepayer owned prime real estate, valued at $42 million in 2017, was turned into a black hole that so far has cost ratepayers over $100 million, increased rates and may not get built. Crux also acknowledges the role of Google’s Pinpoint investigative journalism tools and will publish, in the public interest, each part without a paywall three days after paid subscribers receive this content.

In 2022 the QLDC’s $2 billion Lakeview project was granted fast track resource consent in a move that seemed designed to prevent public consultation, as had been promised to councillors by council CEO Mike Theelen.

The only problem with this consent was that it required the council’s Australian developers, 94 Feet, to get on with the job. As we’ve reported - that has not happened.

What has happened, behind closed doors in January this year, is an unusual four year extension granted by QLDC - in some ways to 94 Feet but in some ways to itself.

Many council and Lakeview observers had assumed that if the Aussies did not get on with the job then the council could cut up the contract and sell the Lakeview land for a large chunk of cash - maybe around $80 million or more.

But that’s far from the actual situation as Crux has discovered this week.

The withdrawal of 25% partner Centuria a few weeks ago did start to ring alarm bells. Why would expert, experienced property investors pull out before construction had even started?

We know that CEO Mike Theelen told councillors in December 2024 that 94 Feet was “in discussions” with their equity partner (Centuria.)

It turns out that Centuria may have been spooked by not just the absence of any construction work but an impending lapse of the fast track resource consent.

QLDC had a plan for that, without apparently telling anyone - least of all our elected councillors.

Senior QLDC planner Sarah Gathercole gave 94 Feet another four years of consent on January 22, 2025. This was under Mr Theelen’s delegated sole authority and the consent now lapses on January 28, 2029.

You can read the full document below - along with the application details from 94 Feet.

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655KB ∙ PDF file

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A feature of this document is the reason given by 94 Feet as to why construction has not started. They blame QLDC, the banks, the housing market and increased costs.

“The submitted AEE (the 94 Feet application for an extension) states that the project remains on track, with construction due to commence in 2025, but notes that delivery of the project has been held up by approximately 18 months due to delays from QLDC. In particular the AEE states that the extension is justified by:

• The consent holder’s ability to implement the approved resource consent has been prevented due to the delayed delivery of Certificates of Title, and delayed completion of underlying infrastructure works by the developer (QLDC). These works were expected to be completed in September 2023, but were finished in August 2024.

• Broader external challenges faced by the consent holder, including a flat housing market, rising construction costs reflected in the high Construction Cost Index, and a tighter banking environment limiting financial flexibility.”

To the average ratepayer these reasons would be ringing more than one set of alarm bells. In fact it would be hard to come with any more serious problems than those listed by 94 Feet. It’s entirely possible that this list of serious problems is connected to the early exit of Centuria.

It is noteworthy in the resource consent extension document that the QLDC senior planner agrees with 94 feet on these two key points:

• They have done a lot of work since 2022.

• Nobody gets damaged by the extension of the date by four years.

Crux would contend that 94 Feet has done very little since 2022 apart from market the property via Sotheby’s. If the current sales figure of $150 million is genuine than that’s only around 7 per cent of the $2 billion construction cost. And with a penthouse allegedly selling for $33 million it means there’s not many “regular” apartments getting sold at all.

As to who gets hurt by a four year extension. What about QLDC ratepayers?

Most of us surely would prefer to axe the 94 Feet deal and sell the land for cash - like tomorrow. Not 20 (now 24?) years to pay and we cover the development costs.

So why does QLDC not end the Contract?

This question centres on the fact that the only person who can scrap the 94 Feet deal is QLDC CEO Mike Theelen.

He was granted sole delegated authority over Lakeview in 2017. But he didnt use it until 2019 - after a new council was sworn in.

You might think Mr Theelen would have done the right thing and asked the new council to endorse the earlier 2017 decision. But he didn’t.

This was the start of gentle but growing concern on the part of some of elected councillors that much as Lakeview might get discussed (usually behind closed doors) there was nothing they could do to change anything. Only Mr Theelen could do that and he was under no obligation to pay any attention to the view of the elected members.

Even as the Lakeview project started to drown under a sea of costs overruns, height increases and the removal of many “affordable housing” promises there was nothing the councillors or the community could do.

Crux reckons that on top of the $77 million of site preparation costs so far, a whole raft of other costs (including the $128 million “arterial road” Stage 1) bring the total closer to somewhere between $100 million and $200 million. This is for a tiny council with an even smaller ratepayer base.

Councillor Niki Gladding has been at the centre of two concerted attempts to remove Mr Theelen’s sole delegated authority over the Lakeview project.

Her first attempt failed when the QLDC commissioned a report from Bruce Robertson on the validity of Mike Theelen’s delegated authority.

Regular Crux reader’s will recognise Mr Robertson’s name as the former Assistant Auditor General (Local Government) who worked with ZQN7’s Ruth Stokes on multiple projects and who ended up chairing as many as twenty of the audit finance and risk committees of various councils around New Zealand.

Mr Robertson had also been called in to report on a Code of Conduct complaint connected with Niki Gladding speaking to Crux about plans for jet aircraft at Wānaka airport some years ago.

Crux carried full coverage of the Robertson report on Mike Theelen’s delegated authority (he supported it) and the report was then presented to councillors by QLDC supremo Meaghan Miller.

In her report, Ms Miller said Mr Robertson’s report considered four different options but the “status quo” delegations that sit with the chief executive were needed for the commercial arrangement between the council and the developers.

That was it. No change.

Then Councillor Gladding had another go but appears to have been ambushed in a highly unusual closed door workshop that turned into a de facto full council meeting.

• Councillor Niki Gladding speaks to media after being removed from her committee roles for revealing details of the Shotover sewage crisis.
  

This is Councillor Gladding’s account of what happened at the workshop.

“These two people came into the worksop - QLDC’s lawyer and a man from property consultants CBRE. They came in the room and this was public excluded, and it was a discussion about why the development agreement is so excellent.

“They just talked up the Lakeview development agreement essentially. And to me, my takeaway was that they're trying to make the councillors feel good about this so that they don't want to review the delegation of authority to Mike Theelen. Anyway, the workshop kind of finishes, and we are halfway to walking out the room and Mike Theelen pipes up and says, oh, Glyn (Lewers) what about this notice of motion thing? “

This was a reference to Niki Gladding’s draft motion to (again) review the delegated Lakeview authority to Mike Theelen.

”Mike Theelen said to the mayor: “Do councillors want to bring it to the table? What do I do about this? “

“And Glyn's like, oh, right, councillors, who wants this notice of motion to go to the table? And people are looking around going, huh? Like, what are we doing voting in a workshop? What are we doing? And um, , it was really funny, Quentin (Smith) abstained, I mean, we're not making a decision, but Quentin abstained. “

“And so Cody (Tucker) abstained too.

“And I was like, oh, we’re voting? Of course, I want this to go to the table, like whatcha talking about?

“So effectively they set up the scenario where they're trying to make the councillors feel comfortable about the Lakeview development agreement and how it's being executed. And then at the end they do a sort of straw poll on whether the councillors want my notice of motion to go to the table for a decision or not, which is completely ****** right? If you have a notice of motion, the point is it goes to the table at a full council meeting and then the decision is made as to whether it's a valid notice of motion or, or not.”

“Well, it's, it was unlawful. You can't make a decision in a workshop full stop, right? No decisions get made in workshops. Councillors were just asked for a decision, and you can tell that they thought it was a decision because we had two abstentions.”

And that was the end of it - Mr Theelen’s sole delegated authority survived intact - and still does to this day.

Niki Gladding’s account of this workshop episode we found to be highly illuminating as to how business is done at the QLDC - often behind closed doors where no minutes are kept - and no official decisions are supposed to be made.

Workshops have since then been opened up the the media and the community under considerable pressure from the Chief Ombudsman.

What does 94 Feet have to say?

Since day one, 94 Feet has refused to answer any questions from Crux.

These are the questions we sent to their Development Manager Charmaine Balchin in Melbourne earlier this week.

“Hi Charmaine,

Could you please answer the following questions by 12.30 pm NZ time tomorrow July 4th.

• Has 94 Feet signed a contract with a building company (which one) for the construction of the Lakeview project in Queenstown?

• Have sales moved beyond $150 million reported in February 2025?

• Has 94 Feet been successful in selling Hotel Indigo in Auckland - how much did it sell for and when?

• Why has there been no construction work at the Lakeview site? Have you abandoned the project?

• If you have confidence in the project why did you apply to QLDC for a four year extension to your Fast Track consent in January this year? Fast Track consent means “Fast” - to state the obvious.

• Do you have any words for the ratepayers of Queenstown who have funded 100% of your site preparation costs and will lose money on this deal? Already rates have risen as a direct result of your project.

Thanks!”

There was no reply.

However Ms Balchin does talk with the NZ Herald, and this is what they reported earlier this week after a visit by their property editor to the abandoned Lakeview site in Queenstown.

“Charmaine Balchin, 94 Feet development manager in Melbourne, said the site might look quiet but activity had occurred there.

“Bringing a project of this scale to life involves much more than simply starting construction,” Balchin told the Herald.

“Since 2021, we undertook the extensive work required to properly stage the development, obtain resource consent for the first stage – a significant and time-intensive process – and build the brand and campaign needed to support presales and funding.

“We also had to co-ordinate with [the] council’s major infrastructure programme, which was essential to unlocking the site.”

That was a programme with a value of about $70 million, Balchin said.

All of this was typical for a project of this scale and complexity, she said.

Balchin said 94 Feet was in a strong position, with presales of $150m, finance secured, the builder contracted, two building consents in place and site activity due to start “shortly”.

As for Centuria, the shareholding change reflected a natural point in the project’s transition from planning into delivery.

“From here, we’re focused on executing the vision with momentum,” Balchin said.

94 Feet was funded by Merricks Capital when it built the new $250m Hotel Indigo, at 51 Albert St in Auckland.

Dean Rzechta, 94 Feet managing director, visited when that was being built.

Rzechta engaged agent Graham Wall to sell the penthouse but acknowledged the market was “challenging”.

At Lakeview Taumata, planning has been under way for years without it rising yet.

That is one of the reasons locals are expressing doubt about it.”

Source: NZ Herald July 2, 2025.

There is a meeting of the QLDC’s Audit, Finance and Risk Committee on Tuesday July 8th. Crux will have full coverage, but we’ve seen the agenda (including a Lakeview update) and it very much sounds like “nothing to see here.”

Niki Gladding was kicked off the Audit, Finance and Risk Committee for telling the public about the current sewage crisis before the council’s PR machine was quite ready with their version of events.