The sale of Tauranga's marine precinct has been stopped at the last minute. Photo: LDR / Brydie Thompson
The sale of Tauranga's marine precinct has been halted at the eleventh hour after current users filed an injunction.
The $13.98 million sale of the Tauranga City Council-owned precinct to Christchurch developer Sam Rofe was due to settle on Friday.
At 8.20pm on Thursday, the High Court granted an interim injunction, which prevented the sale from being completed, Mayor Mahé Drysdale said in a statement.
The council was also served with judicial review proceedings that raised concerns about the council's processes relating to the transaction.
The council was assessing the documents to understand the nature of the claim, Drysdale said.
The council had requested information and legal advice, he said.
Tauranga mayor Mahé Drysdale said the council was seeking legal advice. Photo: LDR / Alex Cairns
"This is of significant importance to our city and the council will meet promptly to consider this matter after it has had an opportunity to assess the claim and its advice."
The injunction was filed by Sean Kelly, the managing director of marine service company Pacific7, which is based at the precinct.
Kelly said the injunction was on behalf of the affected businesses to safeguard the community's interests and the future of local marine businesses.
Earlier this week, Kelly said he had planned to file an injunction but had to abandon it due to the financial risk.
After obtaining the sale and purchase agreement, Kelly said he and his legal team felt compelled to act.
"We now have clarity about what's at stake, and it's our responsibility to protect the interests of our community and industry."
Pacific7 managing director Sean Kelly Photo: LDR / John Cousins
Kelly’s lawyer, Matthew King, said Pacific7’s main legal argument was that the council knew before entering into the sale agreement that many of the marine precinct users would be displaced, and that before deciding to go ahead with the sale, the council should have consulted with those users to understand the benefits they brought to the local economy and if it would be possible to move them.
“Pacific7 further states that the decision to sell places considerable risk to the future of our local fishing and marine service industries.”
In their view: "Pacific7 further states that the decision to sell places considerable risk to the future of our local fishing and marine service industries."
These concerns echo those of local MP Sam Uffindell, who told Local Democracy Reporting it was in his view a "really bad deal for Tauranga".
He met with the Auditor-General and asked him to investigate the sale.
Drysdale said he had written to the Office of the Auditor-General to express full support for any review or investigation it might deem necessary.
In May, Tauranga City Council announced the sale of the precinct at Sulphur Point for $13.987m to Rofe, to be developed into a superyacht refit destination.
The sale conditions meant most of the working-boat operators would need to shift from their precinct berths.
A report presented to the council said Rofe approached the council in late 2023 with a proposal to buy the precinct.
The Government-appointed commission running the council decided to sell the precinct. Elected councillors replaced the commission in July after the decision was made.
The 2.98ha precinct, also known as Vessel Works, was valued at $18.63m and $19.24m by different valuers. It is zoned for port industry and some sites within the precinct are already privately owned.
The 7195 square metre hardstand area was separately valued at $6.12m and $7.81m.
To reach the sale price, the council started with a "valuation midpoint" of $23.13m then deducted $6.96m for the hardstand and $2.54m for "risk". An agreed value of $110,000 for the hardstand and $250,000 for the Vessel Works plant and equipment was added, according to a report presented to the council.
As part of the sale, the council also agreed to pay up to $29.2m to develop an alongside wharf and replace the existing Bridge Wharf, and the council would receive part of the berthage fees.
Reports presented to the council said developing the precinct under private management would benefit the city's economy.
The council will meet at 1pm on Monday to discuss next steps.
Drysdale said the meeting would not be open to the public due to the sensitive legal and commercial nature of the information and advice to be considered. The council would not comment further because the matter was before the court, he said.
LDR is local body journalism co-funded by RNZ and NZ On Air