The front of the former Mueller Wing owned by Scenic Circle, now abandoned following the 2016 flood which broke through a protection bank from the Waiho River to the rear of the complex in a 'flash flood'. Photo: Greymouth Star / Brendon McMahon
A $30 million claim against West Coast Regional Council by the Scenic Circle Hotel Group, after its former Franz Josef hotel was flooded, is not "community-minded" and puts the entire community on the line, council chief executive Heather Mabin claims.
The first stage of a $12.5 million project to improve and extend stopbanks for the South Westland tourist hotspot is on hold 10 months after a contract was first awarded by the council because it cannot get affected party approval from Scenic Circle.
The council's 2021-22 annual report released last week notes it is still to resolve the $30m claim by the hotel group, relating to the inundation of the now abandoned former Mueller Wing in 2016.
"The claim is denied and will be defended by council with the backing of its public liability insurer," the report said.
Westland District Council has also been sued by Scenic Circle.
Mabin said the hotel chain's refusal to sign had put the council in an "unenviable situation".
It was now having to wait on a statutory process taking up to 70 working days - or 10 weeks - to get a formal remedy, given the affected party impasse.
Construction of the stopbank should have been well under way by now, and with the known flood season still to come, the position it had been left in was "not acceptable", Mabin said.
The back of the former Scenic Circle hotel now a wasteland following the 2016 flood. Photo: Greymouth Star / Brendon McMahon
In December, the council lodged a limited notified consent for the stopbank, giving Scenic Circle 20 working days to respond.
"They lodged an objection on day 19," Mabin said.
This suggested the interests of the Franz Josef community were "not at front of mind" with Scenic Circle, she said.
The late objection and the statutory steps it triggered, including the appointment of a hearing commissioner, was an unwanted delay, she said.
Mabin noted Te Rūnanga o Makaawhio had been very helpful in trying to help broker "a faster solution" including to Scenic Circle.
Meantime, the council has again had to justify to the government the $12m of 'shovel ready' money already allocated towards the project.
"Our concern is that the Kanoa (MBIE) board have their next meeting today, and how this will be reflected at board level because of construction not starting."
Meanwhile, all of Franz Josef lived with the fear of another rainstorm which could turn nasty, and a repeat of previous floods.
Mabin said the way it was heading the contractor, MBD, would have waited for a year to start the work.
Scenic did not respond when invited to comment.