Westgate developer sues Auckland Council for $33 million
Tuesday, 26 June 2018
The developer of one of Auckland's biggest sub-regional centres is suing the Auckland Council for $33 million.
The council in turn is asking the High Court to order Westgate's developers to pay it more than $11.8 million which it says is owed.
The pair have filed claims in the High Court in a lengthy and complicated dispute related to the way the Westgate Town Centre is evolving in Massey in the city's north-west.
New Zealand Retail Property Group (NZRPG) claimed the development of the centre doesn't meet agreements reached with the council, deterring customers and lowering its value.
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Auckland Council rejected the bulk of the claims by NZRPG and a series of related companies, and said only $3.22m has been paid from $15.1m owed by the developer.
In mid-2017, the council said it had spent $1.15m in external legal fees on the dispute.
The parties have gone to court after arbitration, which began in March last year, failed to resolve their major differences.
The dispute has its origins in a series of agreements which began in 2004 between the former Waitakere District Council, and NZRPG, to create a fully-fledged town centre with community facilities, a transport interchange and with good urban design.
These included cost-sharing agreements for significant infrastructure, a common view on road layouts and amenities, and how the original Westgate Shopping Centre would link to the big new commercial centre and library, being built on the opposite side of Fred Taylor Drive.
NZRPG claimed Fred Taylor Drive has evolved as a higher-speed arterial route with turning restrictions, rather than a main street, which effectively splits the two halves of the development.
It blamed roading impacts for creating a divide in the public perception of the 'old' Westgate, from the newer developments underway on the northern side.
The absence of a long-planned Bus Interchange in the centre has reduced ease of access, it said in papers filed with the Court.
The end result, it said, was a loss of $1m in potential rental income, and its properties worth $32m less than if the development had proceeded in line with its view of the agreement.
Away from the legal arguments, difficulties with the road layout are visible around Westgate.
A right-hand turn off Fred Taylor Drive into Maki Street in the development has been blocked to reduce traffic volumes through a 'shared space' where vehicles and pedestrians mix.
The original bus hub in the original Westgate centre has been abandoned, with Auckland Transport building a make-shift facility on public roads nearby.
The involvement of Auckland Council and the former Waitakere City Council in the development has at times been controversial.
The Auditor General released a report in February 2017 on the councils' agreements and how it managed its role in the development, noting the increasing financial risk to ratepayers.
It ordered the public release of an internal 2012 legal review of Auckland Council's contractual arrangements, and said the council should have been more transparent.
The review by barristers Meredith Connell found that while decision-making was not always 'best-practice', the principles of 'legality and probity' had been observed.
The Auditor General Lyn Provost noted that the arrangements were different from those normally made between a council and a private developer.
'My view is that it is too early to definitively determine the extent to which the Council's vision will be achieved, and the ultimate cost to be borne by the ratepayers to achieve that,' she said in her report.
Papers continue to be filed in the High Court in Auckland, with no date set yet for a hearing.