QLDC interim CEO refuses to acknowledge loss of Lakeview investor

The interim CEO of the Queenstown Lakes District Council, Meaghan Miller, is refusing to answer questions about the status of the troubled $2 billion Lakeview project, in fact she won't even acknowledge that she is the interim CEO.

Crux has put questions to QLDC on at least two occasions over the past two weeks asking for an urgent update on the Lakeview project.

Construction by the Australian developers was due to start years ago and some critical deadlines are approaching over the next few weeks. The project has so far cost ratepayers at least $77 million on site preparation alone, with many more costs linked to work on the $128 million Arterial Road that eventually (via the abandoned Stage 2) would have linked Lakeview to the Frankton Road. 

The Lakeview towers doubled in height after the project was approved.

Meaghan Miller is the interim CEO while CEO Mike Theelen is on four weeks leave until he returns to work on July 10.

The QLDC comms and PR team will only say that Lakeview is on the agenda for the council's Audit, Finance and Risk Committee on July 8 - two days before Mr Theelen's scheduled return. Mrs Miller was copied on the QLDC emails but did not respond, including a specific question on whether she was the current interim CEO.

Centuria, the New Zealand 25% investor in Lakeview, confirmed to Crux on June 23rd that they had pulled out of Lakeview and transferred their shares back to the Melbourne developers, Ninety Four Feet. The Australians now own 100% of the project.

There is speculation that QLDC might be forced to pull the plug on the entire Lakeview scheme - or attempt a controversial further extension of development deadlines.

There are also key decisions to be made over the coming weeks in relation to Mr Theelen's current sole delegated powers, held since since 2017, to run the loss making Lakeview scheme on his own without elected councillors being able to step in and intervene.

A Crux investigation has so far revealed that the Lakeview land was contaminated with asbestos, controlled via a secret development agreement and that Mr Theelen broke a 2021 promise made to councillors that a doubling in height of the Lakeview towers would be subject to public consultation.

Crux has been asking the Overseas Investment Office for a detailed response on whether the withdrawal of Centuria may overturn the existing approval given to the Australians, in particular under OIO intervention/revocation clauses that are limited to significant business assets and financial thresholds.

This is their latest response.

"Significant business assets"

The significant business assets pathway can be triggered in three ways:

• by acquiring shares (where the price paid or the value of the assets of the target exceeds the monetary threshold, see below)
• by acquiring assets (where the price paid exceeds the monetary threshold)
• by commencing a new business in New Zealand (where the spend prior to commencing business exceeds the threshold, which rarely occurs).

In each case, the transaction must exceed a monetary threshold:

• $100m for most investors,
• $200m for investors from some countries with free trade agreements with New Zealand, or
• $650m for Australian investors (like NFF).

In this case, NFF has acquired Centuria’s interest in two entities involved in the development. We have no information that indicates that the $650m threshold is met for any of the reasons above. While we note reporting that the development may ultimately cost $2b, that cost (and the value created by it) will be incurred over a period of 15 years or more, with the development still at a very early stage today.

Success or failure of the project

LINZ’s role is to administer the provisions of the Overseas Investment Act 2005. However, on the information available to us, those rules do not currently apply to this transaction.

Changes to the Overseas Investment Act in 2020 mean that the land is no longer “sensitive land” and consent under the sensitive land rules is not currently required to acquire either the land or an interest in a person that owns the land.

The former Minister of Finance directed LINZ to revoke the conditions of consent for investors whose land had ceased to be sensitive land as a result of the legislation changing, and accordingly we revoked the conditions of consent that applied to this investment.

It would be inappropriate for us to comment on circumstances where the transaction is not subject to our jurisdiction."

Source:  Toitū Te Whenua Land Information New Zealand (LINZ) - responsible for the Overseas Investment Office. Friday June 27th.