Lakeview: Ratepayer cost nears $100 million but QLDC silent on developer cash

Editorial/Analysis

Crux has for the past week being trying to find out how much cash the Aussie developers have actually paid to QLDC for their ambitious $1 billion Lakeview development.

The answer appears to be some unspecified deposits that QLDC refuses to disclose due to “commercial sensitivity.”

Our tally however of actual money committed by ratepayers on the sole authority of CEO Mike Theelen is around the $100 million mark – up from an estimate of $19 million. The blowouts have been caused by cost increases and other problems, all without any contractual remedy that we can discover that shares liability for those increases with the property developer.

Council CEO Mike Theelen - since 2017 he's had sole authority over Lakeview.

Not only did the already massive $57 million Lakeview infrastructure cost blowout result in a rates rise this year, but another $15 million has been discovered – plus more blowouts on the “arterial” road that appears to lead nowhere but Lakeview. There’s a further promised announcement on what Crux believes is another arterial road blowout discussed in a public excluded session at the last full council meeting – now weeks ago.

We also learned this week that QLDC has been buying property in the CBD, spending $4 million and counting, in order to demolish buildings to make room for various council projects, including a new council HQ for their 600 staff (up from 400 just a couple of years ago).

The only Lakeview cash that QLDC appears to have has received from any source other than ratepayers is $2 million from hotel developer Well Smart (not connected with the Lakeview developers) for their marginal slice of the Lakeview land. As reported by Crux, QLDC could have sold the Lakeview land to the Australians for $42 million but decided instead to opt for a complex, and secretive, deal that supposedly allowed QLDC to “keep control” of the development process.

Instead of receiving $42 million – QLDC has so far spent over twice that much on our behalf.

Of course, the “keep control” claim now is now more than hollow after the developers, out of the blue apparently, declared a doubling in height of the Lakeview buildings and ignored elected councillors demands for publicly notified resource consent. Crux understands that CEO Theelen suggested councillors would get a publicly notified Lakeview consent in return for them accepting the new double-height buildings but he Theelen ended up supporting the developers saying that he had “no appetite” to further consult with the councillors and then supported the Environment Minister David Parker in approving a fast track, non-public consent process.

Ruth Stokes - at a Lakeview "public" promotional presentation - open to selected media only. What's there to hide?

The developers have consistently refused to speak to Crux and answer any of our questions. They even refused to allow Crux to attend a “public information session” chaired by former QLDC manager and consultant Ruth Stokes.

A council “review” of the Lakeview process was carried out by former Assistant Auditor General Bruce Robertson, who has worked on a number of private consulting projects with Ruth Stokes. He said in his report that everything was fine and there was no need to change the 2017 delegation of all QLDC Lakeview decisions to Mike Theelen. To be clear – that means our elected councillors have no real say in what QLDC does regarding Lakeview.

QLDC told Crux this week that the developers had made the unspecified Lakeview deposits under the terms of the undisclosed Development Agreement that apparently forces council to make unlimited improvements to the infrastructure that Lakeview needs before title to the land can be granted and then transferred to Lakeview.

All of which sounds bizarre.

Just as bizarre as starting work on the $150 million “arterial” road with no money to finish two thirds of it. That’s why Crux believes the arterial road is actually there for the benefit of Lakeview and is of little real benefit to the rest of us, who actually pay to live here.

The Auditor-General has refused Crux requests for an investigation into Lakeview. We are wondering what the threshold will be for that to change.

At this rate it could be QLDC hitting its debt limits and declaring a financial emergency. Auckland Council is cutting 400 jobs to manage their debt problems – QLDC appears to have a different approach which, frankly, becomes more terrifying by the day.