Decisions about a $15.5M Queenstown property purchased by the Queenstown Lakes District Council (QLDC) several years ago should be on the radar of Upper Clutha ratepayers, two Wānaka councillors say.

Upper Clutha ratepayers will be partly responsible for funding the purchase of the high profile property, as well as its redevelopment and ongoing operations.

The hasty deal (made in a public excluded meeting) to secure the property resulted in the council setting New Zealand’s record payment for a rural zoned, residential or lifestyle property in 2019.

Last week QLDC announced that toxic mould had been uncovered in the house.

The existence of mould meant the council had to take “a fresh approach” to the building, the council said in a statement released to media.

Toxic mould was found behind the house’s cladding. PHOTO: Sotheby’s Queenstown

“QLDC purchased the former Walker family property [which includes a 440m2 five-bedroom house and swimming pool] in 2019 for the strategic long-term value of the land and at that stage never intended to reuse the existing house,” QLDC sport and recreation manager Simon Battrick said.

“Subsequently councillors asked staff to investigate the possibility of retrofitting the old house as an interim facility serving the surrounding communities of Lake Hayes Estate and Shotover Country.”

However, architects engaged during the design stage discovered the game-changing mould.

“My primary concerns are that too much may have been paid for this property and ratepayers are now burdened with a large expense to remediate it,” Wānaka councillor Lyal Cocks told the Wānaka App.

Lyal Cocks said he is concerned too much may have been paid for the property and ratepayers are burdened with a large expense to remediate it. PHOTO: Supplied

He said he was surprised at the time by the purchase price of $15.5M, which he said “seemed excessive”.

Lyal said at the time of purchase he was not aware that Upper Clutha ratepayers would also be paying for the property, its redevelopment and future operations.

“Most of the decisions were made with [the] public excluded, but as we will now be considering further large expenditure of ratepayers’ money on this asset, it is important that we have a clear understanding of the decisions made regarding the purchase process and intended use before further decisions are made, and that is what I will be asking,” he said.

“I am keen for council staff to address these concerns in the upcoming meeting.”     

New councillors Barry Bruce and Cody Tucker declined to comment, saying they needed to be briefed by council first.

Councillor Quentin Smith acknowledged that Upper Clutha residents may want to know more about the issue.

“The concern here is equity across the district, not who is paying for it,” says Quentin Smith. PHOTO: QLDC

“It happened quickly and in a publicly excluded way which doesn’t give people transparency,” he said.

However, he noted that when the council bought the land it did not assign the building “any significant value”.

“It was … understood that the building wasn’t perfect,” he said, adding that councillors “weren’t aware of the specific condition of the building”.

“If we knew the condition it would have been bulldozed at day one.”

A building inspection report conducted before purchase highlighted issues with moisture levels and suggested remediation to the cladding.

Quentin said it should not be a surprise that Upper Clutha ratepayers would also be paying partially for the property.

“Yes we will be paying for some aspects of Ladies Mile in the same way that Wakatipu residents will be paying for parts of the Luggate Hall.

“The concern here is equity across the district, not who is paying for it.”

QLDC finance general manager Stewart Burns told the Wānaka App in March 2022 that about 80 percent of the property’s purchase price will be funded by Wakatipu Reserve Land Development Contributions with the balance funded district-wide, in line with council’s policy for community halls.

Any future operations of the Ladies Mile complex will be funded the same way as all QLDC sports, halls and library facilities, he said, “that is as a district-wide targeted rate and by user charges”. 

There are exceptions to district-wide funding for community services and assets, including ward-based funding for the Wānaka and Queenstown swimming pools.

Quentin said the Ladies Mile property is “a significant community asset, it’s not sunk money”, and the question being asked should be around the strategy for community facilities.

“We can go back to the drawing board and make sure those decisions around the buildings … are strategic and not reactive,” he said.

“I don’t think the building was ever particularly suited for community use. It’s disappointing that we’ve waited for two years looking at retrofitting options.

“But I think it’s a good thing that council is looking forward and buying land that can be used for facilities. It’s a key part of any growing community.”

The next council meeting - the first since the October 8 election - will take place tomorrow (Thursday October 20).

The Wānaka App submitted a series of questions about council decisions on the Ladies Mile property, including why the state of the building was not mentioned in communications around the purchase, and whether a reduction in price was sought because of the buildings’ poor state of repair.

The council requested the questions be considered as an Official Information Act request, “on the basis of the work involved for council staff across different departments to track back through three years of documentation, and also the need to examine potential legal and commercial sensitivity regarding the purchase process”.