New developer pays deposit for Showgrounds land, wants further extensions

Wednesday, 18 December 2024

The council was paid a $100k bond following an agreement the large stockpile at The Showgrounds would be removed by the start of this month.

The new developer of The Showgrounds retail centre in Timaru has paid a deposit for the final three lots of land at the site, but wants the council to extend the deadline for removing a pile of dirt and hold a $100k bond.

In April, the council granted an application by former developer Tony Gapes to change the subdivision consent for The Showgrounds to allow it to split the development. At the time, the council stipulated the bond be lodged and gave a non-negotiable deadline of December 1, 2024, for the removal of a large stockpile.

The bond was paid, and the deadline was missed.

The stockpile of clay and dirt in November. The developer wants an extension of the period to move the stockpile, until October 31, 2025.

In November, it was confirmed Gapes had run out of money and Kerry Knight of Equinox Group had taken over.

At the time, Knight described himself as a passive investor in the development and said Gapes had struggled to find the $60 million needed to refinance the embattled project.

“We took over, otherwise there would have been a mortgagee sale and the equity would be wiped out.”

And now, the new owner wants further changes to resource consent conditions for traffic monitoring it is required to do, another 10 months to move the pile and the council to extend the deadline for the bond.

Timaru District Council group manager corporate and communications, Stephen Doran, has confirmed the council had agreed to hold the $100k bond while the application was considered.

The council’s group manager corporate and communications, Stephen Doran, confirmed the developer had sought changes to the consents for the development and that council had agreed to hold the bond.

“Just prior to the deadline the developer applied for a variation of the consent conditions to enable them more time to complete highway monitoring and to use the stockpile to complete the development.”

Doran said that had been returned due to inadequate information, and the developer had relodged the application on Friday morning.

“A replacement application has been received … and while this is under consideration the council has agreed that the bond will continue to be held in the interim.”

Asked why the council had not kept the bond given the deadline was not met, Doran said:

“As the stockpile is required on site to complete the development, a short extension with any necessary mitigation measures is considered a prudent approach under the circumstances.”

TDHL confirms deposits paid on final land

Timaru District Holdings Limited (TDHL) general manager, Frazer Munro, confirmed deposits for lots 7, 8 and 9 had been paid in November.

The developer has now paid a deposit for the final three lots of land at the 12ha site on Evans St/SH1 in Timaru.

The original settlement for lots 8 and 9 was to be in October 2023, but TDHL agreed to a second extension in August, with the date now October 31, 2025. In confirming that decision, Munro said the new date reflected “actual development time frames”.

At the time, he said the right of first refusal for the transfer of lot 7 had been “actioned to transfer in the same time frame”.

“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 7956m² lot 7 sat 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.

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

However, the TDHL annual report presented at last week’s council meeting showed the land had been revalued from $1.681m to about $770k.

TDHL chairperson Mark Rogers said land was revalued regularly, and the higher value had been based on developed market rates.

The three lots the developer has paid a deposit for in recent weeks sit to the right of the first stage of the development above.

Rogers said lot 7 was undeveloped and had been revalued to reflect that.

He said the sale price of lot 7 was based on the rate in the contract at the time the original sale and purchase agreement for 233 Evans St/The Showgrounds, was signed in October 2020. However, he said that had been adjusted for inflation.

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

A amount to be paid for lots 5-9, which form the second stage of the development, was also redacted.

However, in June TDHL released financial statements which showed the holdings company was paid $663, 075 for the 8590m² lot 5.

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.

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.

TDHL bought the 12ha site from Christchurch-based developer Calder Stewart in 2017 as a “strategic purchase” for $6.296m.

The purchase came as the council was looking into the threat potential big-box development posed to the viability of the CBD, an issue identified in the District Town Centres Study released earlier that year.

At the time, then council district planning manager, Mark Geddes, who co-authored the report, said big retailers based outside of the CBD could draw business away from the town centre.