Lakeview Part 10: The Final Countdown?
The Aussies come to town - and Crux will be there.
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.
It’s been a dramatic week, with the main feature being the refusal of the Queenstown Lakes District Council to answer Crux Lakeview questions, based on the first nine parts of this investigative series. We had hoped to publish the council’s response in full - but instead they’ve said nothing and given themselves 20 days to decide if they will speak, under the Local Government Official Information and Meetings Act (LGOIMA).
On the plus side, the council’s refusal to answer questions has gained the attention of the NZ Government. Specifically Local Government Minister Simon Watt.
He’s instructed the Department of Internal Affairs to seek reassurances from the Queenstown Lakes District Council that the Lakeview project is “progressing effectively”. Here’s his full statement to Crux.
“This Government has made it clear that it is committed to delivering better public services and getting councils back to basics. As part of that, I am introducing legislation where one of the objectives is to help councils to focus on financial prudence. Through this, ratepayers will benefit from increased transparency of council spending and improved council decision making.
“I encourage all councils to work with their communities to ensure they are being as transparent as possible with council decisions around spending and investment.
“I have instructed my officials at the Department of Internal Affairs to get in contact with the Queenstown Lakes District Council, to seek assurances that the project is progressing effectively.”
We then reached out to the Department of Internal Affairs and they supplied this statement.
“The Department is aware of the concerns raised. We have been and will continue to be in contact with Queenstown Lakes District Council.”
Crux supplied all nine parts of our Lakeview investigation to Minister Watt’s office and to the DIA.
We believe this has prompted a sudden development which is the early release of the agenda for a QLDC public workshop on Tuesday, August 19. Normally these agendas are only released 48 hours before the meeting takes place.
This is what has just appeared on the QLDC’s website.
Crux understands that this brief, 15 minute presentation will be by 94 Foot director Dean Rzechta and (at the moment) this workshop session is open to the media and the public.
Dean Rzechta of 94 Feet. In the hot seat for 15 minutes.
Apart from the very short presentation slot the wording warrants careful examination.
“Regular 6 monthly Lakeview developer (Ninety Four Feet) verbal update on their programme, including project timings and design documentation progress, and to enable Councillors the opportunity to raise questions directly with the developer.
“Ninety Four Feet is preparing for construction commencement within the next 6 months and are working through settlement conditions required under the development agreement (with Council) for the transfer of land (lot 8) for their stage 1 development. Ninety Four Feet will be introducing representatives of their construction team.”
So, it is definitely unusual for representatives of a construction team to be dragged along to a council meeting. We can only assume this is designed to be taken as some sort of evidence of the developers claimed intention to actually build something.
In 15 minutes nobody will get a chance to say much, and councillors certainly won’t get much of a chance to ask questions. But there will be some.
Crux will be at the workshop, unless there’s a last minute decision to close the meeting to media. Hopefully with the Government now watching from Wellington, and the Ombudsman recently finding the QLDC has broken the law in terms of transparency and local democracy, this 15 minutes will take place in a manner that can be witnessed and analysed.
Having said that - the damage is already done. And as readers of our investigative series will know, if the project does proceed with 94 Feet, then that’s very bad news for local ratepayers.
If 94 Feet do pull out or fail to start construction by April 2026 then the QLDC can take back the land and sell it for at least double the amount that has been agreed by CEO Mike Theelen - based on the 2017 valuation of $42 million plus some speculative “super profits” that may never happen.
We can’t get back the extraordinary amount of around $100 million that’s been sunk into some pipes and roads that lead nowhere. A new council after this October’s local elections may have some questions about how exactly so much money could have been spent on so little.
If the Australians do finally start to build something - then we are screwed by CEO Theelen’s deal. By our calculations that means a loss of $153 million to the ratepayer.
Never has a community had so much to gain, by a project getting cancelled.
Thanks to our paid subscribers for supporting this investigation and to Google’s Pinpoint tools which allowed us to dig into some of the most secret aspects of the Lakeview deal.
We will continue to cover this story as it develops.
Here’s a reminder of what’s happened - and what was supposed to happen.
