Castlecliff land sale to Tūpoho Investments Ltd

No. The land was sold for $1.4 million, the value assessed by an independent market valuation commissioned in late 2020. The vendor lending arrangement was documented separately and includes repayment obligations, including interest. The transaction was progressed under the chief executive’s delegation. 

Recent commentary has compared the $1.4 million sale price with later rating valuations (RVs) and suggested this represents a loss to ratepayers of around $4 million. This is not a like-for-like comparison. The independent valuation considered the three properties together as a development opportunity, taking into account the significant costs, time, infrastructure constraints and risks associated with developing the land. Later RVs reflect values at a different point in time and in a materially different development context. 

While no real money was lost simply because later RVs were higher than the sale price, there was an opportunity that additional revenue may have been realised between the valuation in late 2020 and the sale in 2022 as land values increased, however, much of the subsequent improvement in the development potential of this land depended on infrastructure being unlocked. In October 2022, Tūpoho Investments Ltd and the council secured Infrastructure Acceleration Fund (IAF) support for roading and water infrastructure intended to enable homes in the wider Carson Street extension area. Without that infrastructure investment, the land would have remained significantly constrained and its development potential –and therefore its value – would have been materially different. 

The extent of any opportunity for additional revenue is therefore difficult to determine and cannot simply be calculated by subtracting the $1.4 million sale price from a later RV. Achieving a higher price in 2022 would have depended on there being a willing buyer prepared to take on the planning, infrastructure, development costs and risks associated with the land at that time. It also needs to be considered alongside the council’s strategic intentions to enable housing and infrastructure investment in Castlecliff, and the planning, plan change, infrastructure and other development-enabling costs and risks the council may otherwise have needed to carry itself.

Yes. As part of the 2022 agreement, Whanganui District Council provided vendor lending to Tūpoho Investments Ltd.  The vendor loan was structured as a formal commercial arrangement with repayment obligations. 

The lending arrangement was intended to support the wider objective of enabling future housing development in the area, while ensuring the council’s financial interests were protected through formal documentation and repayment obligations. 

The key loan terms, including interest and repayment timing, are set out in the transaction documents. Those documents have previously been released under LGOIMA and are available on this page. 

The council received legal advice that the land did not need to be advertised on the open market. This reflected the specific circumstances of the transaction, including its connection to housing, infrastructure and partnership outcomes in the Carson Street extension area. It was therefore treated as a straightforward sale of surplus land, recognising it was delivering on the council's wider strategic intentions relating to housing.  

The council buys and sells land from time to time through commercial arrangements. Under the council’s Significance and Engagement Policy at the time, this transaction did not require community consultation.