Housing for the elderly in the Horowhenua district is about to be sold off by the council despite opposition from mayor Michael Feyen, who says it is bad deal for residents.
Horowhenua District Council Photo: google maps
A total of 115 units across eight complexes, mainly in Levin, as well as a 1.1 hectare block of land, will be sold to Compassion Horowhenua Limited, a company which only registered on the companies office last month.
Compassion Horowhenua will be an equal shareholding between the Sisters of Compassion, and developer Willis Bond & Co.
Sisters of Compassion is the sole shareholder of Compassion Housing, which is a registered provider of elderly housing.
A leaked document said the units had been sold for $5.5 million, below the council's own book value of $7.2m for the properties.
The council would not confirm the price, but did not deny it was below the rateable value of the properties.
The sale has been vehemently opposed by residents and the district's new mayor Mr Feyen, who stood on a platform running against the sell-off.
A media briefing outlining some of the details was held this morning by the council's chief executive David Clapperton and Compassion Horowhenua.
However, Mr Feyen was not advised about the announcement, something he said he was "brassed off" about.
"I am definitely opposed to the sale, I'm opposed to the whole process that I've seen, I'm opposed to the way the public are being excluded and I've been opposed to just even what the case was to sell it."
The mayor and the chair of the Horowhenua Rates and Residents Association, Christine Moriarty, both describe the deal as a fire sale.
Ms Moriarty said the district was largely made up of retirees, many of whom could not afford their own home.
She said the units should be kept in the community's ownership.
In the council's own Expressions of Interest document put out to potential buyers, Ms Moriarty said the rateable value of the land was listed at $9.2m.
She said she believed that was a lot less than what the land and properties would be worth on the market, which she estimated to be about $20m.
Ms Moriarty is also worried about who the units have been sold to, pointing out that one of the conditions of the sale is that the buyer must be a registered Community Housing Provider, or have the ability to become that before the transfer.
"They've [the company] got no history and they state that they're a land developer."
Units would remain as social housing - developer
Willis Bond & Co specialises in property development and investment in Auckland.
Its website said its projects were predominantly large scale, medium to high-end developments based in urban environment, which is why Ms Moriarty questions its participation in social housing.
The council said Compassion Housing and Willis Bond & Co had a long-standing relationship.
David McGuinness is a director of both organisations.
He said Willis Bond & Co's investors have an interest in social investment, and the pensioner units as well as the partnership with the Sisters of Compassion "fits that bill."
Mr McGuinness said he guaranteed the units would remain as social housing.
A 1.1ha block of land is also part of the deal, which Mr McGuinness said would be developed by Compassion for elderly units.
However, Ms Moriarty said there was nothing to safeguard the existing tenants.
The Horowhenua District Council has said it will include in the contract a condition of sale that all the properties will be retained as community housing for the district, ensuring existing tenants can stay in their units, which Compassion Housing has agreed to.
The sale is due to go ahead in September.