Our Lakeview visit – $1m dumped pavers and zero construction.

Crux visited the Lakeview site above central Queenstown today to find out why things had gone deathly quiet for the past year or so.

We found:

• Zero construction work by QLDC or the Australian developers. Nothing.
• A paddock full of dumped tiles and pavers – seemingly the result of a $1 million QLDC over-order.
• The Aussie developers are selling off their internet domain – lakeview.nz for $US 5,900. Why?
• QLDC reckons things are still due to happen – but the financial loss sits at between $50 and $70 million – if things go very well.
• Stage 1 might be complete by August 2027 “contingent on construction starting.”

Today’s Visit.

Rather than the focus of a $2 billion mega project our visit to the Lakeview site today (April 22) was more like spending time in the neighbouring graveyard.

Nothing was happening – and we really mean nothing. No surveyor’s pegs, no builders power supply. No height markers, no water supply.

Nobody.

Nothing.

The only thing we found of interest was a dumping ground for tens of thousands of expensive QLDC funded pavers and cobblestones.

Around 400 or more pallets to be exact, each containing up to 300 high end granite pavers. We could not find any spare pounamu tiles valued at $506 each.

$8,000 "architectural" benches were among the massive dump of unused materials

Each pallet included labelling that indicated either “Queenstown Street Upgrade” (now finished) or “Lakeview.”

The value of each pallet could be anywhere from $1200 to three times that much.

From the faded labels and vegetation growing through the stonework it could have been lying there for between 12 months and 2 – 3 years.

The only information we got from QLDC, after asking for cost, who authorised the spend and why the apparent quantities were so far in excess of what was needed, was this statement:

“The pavers are an assortment of different pavers from various projects in the town centre which are being temporarily stored on the vacant land.”

We do the numbers on Lakeview.

Given the Lakeview visit, apart from the excess pavers, was shorter than expected we had plenty of time to crunch the numbers. How much has Lakeview cost local ratepayers so far – and what might be the final outcome?

Here’s the top line, fundamental costs and projected income.

Starting position – land worth $42 million. The Lakeview site.

Money spent so far by QLDC – split into what they classify as direct Lakeview costs and money that’s been spent that will “help surrounding housing areas.” The second category is vague, but we’ll stick with QLDC’s split.

Direct Lakeview costs = $55 million

Indirect “general improvements” Lakeview spend = $20 million

Total $75 million. Cost.

QLDC forecast total revenue over 20 years of Lakeview deal = $88 million (not guaranteed)

Development contributions from the Australian developers – not revealed, but Deputy Mayor Quentin Smith estimates as his “best guess” $20 million over 20 years.

We don’t know if QLDC has included these uncertain development contributions in their revenue figure of $88 million – so let’s do the maths with and with these.

Land – handed over but stage payments over 20 years.

$42 million value. No outright sale. So, this is an initial cost paid off over time – 20 years.

Plus $75 million site costs.

That's $117 million of cost and assets (land) disposed of in 2024 - 2025.

Income fixed $88 million over 20 years. Of course, this gets eroded due to inflation and the cost of money. To be generous it’s only worth around half of today’s value over the next 20 years. So, let’s call it $44 million.

Costs of $117 million – less revenue (over 20 years) of $44 million (adjusted for inflation)  = Loss is $73 million.

Plus, potential development contributions of $20 million (not guaranteed) – loss reduced $53 million.

The dealmakers behind Lakeview - under delegated authority - CEO Mike Theelen (left) and special projects manager Paul Speedy (right)

To be clear, QLDC only planned to spend $19 million on site development – so for land worth $42 million and income of $88 million (reduced over 20 years to $44 million) they would have been lucky to make $2 million “profit.” Even Jim Boult at the height of Lakeview promotion reckoned a profit of only $4 million.

Things get much worse when the “road to nowhere” (actually the road to Lakeview) gets factored in at around $128 million less around $50 million from NZTA.

So instead of doing nothing and allowing Lakeview to remain as an affordable housing area the QLDC have in effect given the land away to a very wealthy Australian developer and then billed the ratepayer for between $50 and $70 million – and of course that’s if everything goes very well and we get those mysterious “super profits” that remain a hidden secret of the QLDC’s development agreement.

Things could get a lot worse if QLDC can’t get the sewage crisis fixed, opening themselves to getting sued by the Aussies.

And then they’ve lost up to $1 million extra on those cobblestones and pavers that someone over-ordered.

We have to keep asking the question: Why would our local council effectively give away $42 million of land to a rich Australian company, spend over $100 million on specific roads and site development and then be lucky to get $88 million back after 20 years?

It just makes no sense and has already seen a rates rise specifically linked to Lakeview.

And of course at the same time we’ve seen a massive level of under investment in drinking water quality, sewage processing and roads/public transport.

For the record, here’s QLDC’s statement made today on the whole situation:

“QLDC has received a deposit from the Developer relating to the sale of land.  Development contributions will be paid as part of the consenting process which is separate to the commercial arrangements between the parties.

“The handover of (Lakeview stage 1) title is expected within the next six to 12 months, with construction commencement expected within two months following stage 1 settlement.  Stage 1 completion is contingent on construction commencement.  

“Regarding sewerage, the developer has obtained resource consent for development of the land which is expected to continue in stages over 12-15 years.

“The surrounding infrastructure installed at the time of the street upgrades, as well as the Recreation Ground Wastewater Pump Station upgrade, were sized to include the Lakeview development’s expected flows.

“Future upgrade projects to the further downstream network are also being sized to incorporate the expected flows from the Lakeview development. This includes any solutions to the failing disposal field at the treatment plant.

“And in case it’s helpful, we speak to investment to meet future community needs and increase capacity in the last couple of FAQs here:https://www.qldc.govt.nz/your-council/major-projects/shotover-wastewater-treatment-plant/short-term-approach-for-managing-wastewater-discharge/#faqs “

Watch: The Crux documentary on Lakeview as the cabins were about to be demolished.