TDHL negotiates further extension with Showgrounds developer

Friday, 16 August 2024

The developer of The Showgrounds has been granted an extension to October 2025 to settle on the final lots of land for the second stage of the retail centre.

The developer of a large format retail centre in Timaru has been granted yet another extension to the settlement deadline for the last three lots of land.

Timaru District Holdings Limited (TDHL) general manager Frazer Munro confirmed it had reached an agreement with the developer of The Showgrounds, Redwood QT Limited and Timaru Mega Centre Limited Partnership.

In June, TDHL confirmed the developer had sought a second extension to the settlement deadline for the land for the second stage of the development.

Munro confirmed the holdings company had agreed to a further 15-month extension this week.

“The settlement date for Lots 8 and 9 at Showgrounds has now been updated to be 31 October, 2025, to reflect the actual development time frames and to align to the recently issued resource consent,” Munro said.

The developer has been told to remove a large stockpile of materials which has been sitting on land at the development since earthworks for the first stage.

The Timaru Herald has requested a copy of that resource consent, and the application, from the Timaru District Council.

Munro said the right of first refusal for the transfer of lot 7 at the Showgrounds had also been “actioned to transfer in the same timeframe”.

“The rationale of including lot 7 is that it requires, and supports, the developer to remove the stockpile currently occupying the adjoining land, and continues TDHL’s approach of actively exiting this legacy purchase, freeing up capital for investment in our Washdyke Industrial Park/Lyndon St extension.”

The 9242m² lot 7, sits at the bottom corner of the development. In the original agreement it had a settlement date subject to clause 32.14. It was not known what that clause stated, as that information was fully redacted in the copy of the agreement released to The Timaru Herald.

TDHL general manager Frazer Munro confirmed the developer had been granted a further 15-month extension to the settlement deadline for some of the second stage land. (File photo)

“In line with the contract … the sale price will remain commercially confidential until settlement,” Munro said.

TDHL entered into an agreement to sell the land at 233 Evans St in Timaru to the developer in October 2020.

The original settlement date for lots 8 and 9 was to be October 12, 2023.

Unable to meet that, TDHL granted the developer an extension to June 30, 2024. At the time, Munro said they could have decided not to proceed with the deal, but had granted an extension because they just wanted to “see him finish it off’’.

With the June deadline approaching, Munro confirmed the developer had asked to further extend the deadline.

Last week, just shy of six weeks after the previously agreed date, Munro said TDHL had not yet agreed to the extension and was “still working through options with the developer”.

Woolworths (branded Countdown at the time) was the first business to open at The Showgrounds development in March 2023.

The sale and purchase agreement between the two parties shows lot 1 was sold for $6.35m.

A copy of the agreement, supplied to The Timaru Herald, had been heavily redacted, including the agreed amount to be paid for the second stage, lots 5-9.

However, in his annual management report to June, TDHL chairperson Mark Rogers released financial statements which show the holdings company sold lot 5 for $663, 075.

Lot 8 was originally planned to accommodate a tavern, food and beverage businesses and a large format retail store, and lot 9 a car park.

The Showgrounds at 233 Evans St. (File photo)

According to QV, as at September 1, 2023, 233 Evans St had a capital value of $42.35m and a land value of $17.55m.

In April, it was confirmed the council would grant an application by Timaru Mega Centre Limited Partnership to change the subdivision consent for The Showgrounds to allow it to split the development.

At the time, the council stipulated a $100,000 bond be lodged and gave a non-negotiable deadline of December 1, 2024, for the removal of a large stockpile of material at the development.

Last week the council confirmed the $100,000 bond had been lodged and the subdivision consent process had been completed.

Earlier this week, Australian discount retailer Kmart said it had no confirmed plans to open at The Showgrounds despite having been listed an the ‘anchor tenant’ on a website seeking investors for the second stage of the centre.

“Should this change, we will make a formal announcement,” a company spokesperson said.

KC Securities, the investment company linked to the development, had listed Kmart, Supercheap Auto, Petstock and Anytime Fitness as stage two tenants in information on its website seeking potential investors.

When asked about those, company director Cameron Dargaville said the tenancies were not confirmed, and earlier this week the website was update and reference to all four businesses was removed.

A Supercheap Auto spokesperson said the company had “no comment” to make about the possible tenancy. Petstock is yet to respond. Anytime Fitness was confirmed as a tenant, by Gapes, in December 2023.