New Zealand / Local Democracy Reporting

'Bizarre' property strategy leaves ratepayers out of pocket over scout den rental

17:37 pm on 29 March 2022

Awakeri Scouts will be able to stay in their den for another 10 years, at a cost of $120,000 to the Whakatāne District Council, after the council sold the property it stands on for $135,000 five years ago.

Awakeri Scout den will remain at its current premises for at least the next 10 years. Photo: LDR / Troy Baker

The council voted last week to enter into a lease agreement with the owners of the scout den - a decision that will push its obligation to accommodate the group out for another 10 years.

The annual rental of the hall will be $12,000 a year for the next 10 years plus utility costs of $6000 for the full term of the lease. The council also acknowledged its continued obligation to provide accommodation for the scout group beyond the 10-year lease period.

Awakeri Scouts assistant leader Daimon Jones addressed councillors at a meeting of the project and services committee last Thursday before it made its decision.

He said Awakeri Scouts, established in 1943, had just over 50 members. The den was used four nights a week and some weekends.

For the benefit of those councillors who hadn't been on the council when the Awakeri War Memorial Hall and the adjoining scout hall had been sold, Jones explained how, in the 1980s, the same family that had previously gifted the land for the hall, gifted Awakeri Scouts some land next door to build their own premises.

The vestment of land to the Whakatāne Borough Council came with a letter stating that it was for the sole use of the Awakeri Scouts, free of charge. Funds were raised and the den was completed in the mid-1980s.

Jones said the scouts' tenure of the land was what had given them the ability to operate for the past three decades at very little cost to the council.

"We never asked them to mow the lawns, reroof the building or buy us heat pumps. We did all of that. We've done the painting, we've done everything."

In late 2017, the council sold the Awakeri War Memorial Hall, along with the Awakeri Scout Den and the land it stood on, to neighbouring farm owner Barry Caulfield for $135,000.

The land has since been sold twice and is now the property of Watt Electrical.

At the time the council divested ownership of the scout den and hall, an agreement was made between the council and Awakeri Scouts that they would be relocated to another premises that was "like for like".

The council had planned to build a new den on the Awakeri School grounds. However, when quotes were sought last year the project was estimated to cost around $474,000.

Jones said last week that Awakeri Scouts had urged the council against the sale from the start.

"We went to council and said, 'we don't want to do this'. Because the council petitioned, pressured and persuaded us to help progress the district we were promised that if we allowed the council to remove our rights, they would ensure these would be reinstated at an agreeable location."

Obligation ' not going away'

Community experience general manager Georgina Fletcher presented a report to the council recommending it enter into the lease agreement with Watt Electrical.

She said the current owners of the hall were very community minded people and were happy for the scouts to remain where they were on the terms that council pay rental.

"We could spend a lot of time going over the rights and wrongs of the deal that was entered into previously. That is not what the report is about today. Today is about how do we honour the agreement that we did enter and continue to provide the scouts with a premises.

"It does not make the obligation go away; it provides certainty of tenure for 10 years but at the expiry of that time we will still have an obligation to the scouts to provide them with a premises."

She said the agreement provided the council with some time to investigate other options so it could continue to meet its commitments to the scouts.

Judy Turner Photo: RNZ

Mayor Judy Turner told Jones she believed the council and the scouts had gone into the deal with very different expectations of what they were agreeing to. She didn't recall that storage currently provided by the Awakeri Hall, or toilets, were part of the scout premises at the time.

"Certainly, as somebody who sat at the table listening to the deal at the time, it's shifted considerably as to what your expectations are... At that time, it was looking very likely that it could go onto the school grounds. There was the ability to use the toilets there. It all looked a pretty easy job for us. As time went on it got more and more expensive."

Jones told the mayor he thought she had been misled in her understanding of the deal the scouts made with the council.

"I have a submission in front of me dated December 17, 2015, where we outlined what we had there. We always had our own toilets."

Councillor Lesley Immink asked for clarification from Fletcher that, taking into the consideration the $27,000 spent to date on plans for a new build, the council did not have enough left from the sale of the hall to cover the expense of the lease of the premises and cost of utilities for the next 10 years, let alone to build new premises for them at the end of the 10 years.

Fletcher confirmed that this was the case.

"You need to factor into your decision today whether we do need to put it in the budget for 10 years' time, to account for potentially having to build new premises.

"It's hard to believe we've got ourselves in this position," Immink said.

Council's property strategy queried

Councillor Victor Luca questioned the council's property strategy.

"This all seems a bit bizarre. You sell a piece of property that was gifted, for what now seems a very cheap amount, with no long-term solution in sight, and now we're in this position which might involve us having to go to the ratepayers again. I'm not very happy about that. Maybe we need to think harder about our property strategy."

Councillor Wilson James questioned whether the scouts would be around in another 10 years' time.

"The present situation is probably ideal. The annual lease is acceptable. The way scout dens have been closing around the district over the past 20 or 30 years we can't guarantee that even Awakeri Scouts are going to be needing a building in 10 years' time."

Councillor Nandor Tanczos said that, as one of the councillors who had voted against the sale of the hall in the first place, he was "intensely frustrated at where we've ended up".

"It's really a ridiculous position to find ourselves in and we are going to have to seek some rates funding to sort that out and we're just going to have to suck that up because of a decision that was made some time ago."

He said, in the situation, the 10-year lease of the hall was probably the best thing they could do even though they were just "kicking the issue 10 years down the road".

Local Democracy Reporting is a public interest news service supported by RNZ, the News Publishers' Association and NZ On Air.