Council prepares to dump hotel for $1.2 million loss

Rodney ratepayers will cop a massive loss on the sale of the prime Warkworth Hotel site, which fronts Neville and Queen Streets, if Rodney District Council accepts an offer currently on the table.

The property was on contract at the end of August to Rose Casey Ltd for $3,050,000 – a sale that would leave Rodney ratepayers $1.2 million out of pocket.

Council borrowed heavily to buy the property in October 2007, paying $4.2 million. The current valuation was advertised at just over $4.6 million.

Rose Casey director Greg (Hugh) Kasper is an Auckland accountant who has strong links with Warkworth’s history. Kasper Street was named (but misspelt) after his family, and the Kasper homestead still stands on the banks of the Mahurangi River. While reluctant to comment until the sale was finalised, Mr Kasper said his family’s connection with the area gave him “a lot of sympathy” for concerns about the hotel’s future.

Commenting on the possible sale, Cr Dave Parker, who voted for the purchase in 2007, said he was sad and disappointed to see such a valuable asset lost to the town. He said Councillors were not party to the decision.

“Although I was aware that it was on the list of properties senior management were selling, I am not aware that Councillors were consulted on the sale price,” he said. “We were merely being advised of the sale’s progression.” He says he only hoped that the new owner appreciated the significance of the building to Warkworth.

“It really is the centrepiece of the town and I would love to see it return to its former glory.”

The sale is being managed by Rodney Properties Ltd, the body set-up by Council to dispose of a list of Council-owned properties to off-set escalating Council debt.

Cr Grahame Powell said he had supported the purchase of the site in 2007, as the object was to preserve the amenity of Warkworth.

“There were real concerns that the site was going to be developed for a supermarket,” he said. “Our aim then was to establish a town square for Warkworth and sell-off the balance of the property to recoup at least some of the original purchase price. This obviously didn’t happen and its been sitting in the “too hard” basket for a long time.”

Cr June Turner said she was not happy about the sale either.

“It’s like a fire sale,” she said.

“I did agree to the purchase originally because we were told at the time, that if we didn’t, a big development was planned for the site. I really question why we’re selling it for the price we are.”

Crs Ross Craig, Pat Delich, Colin MacGillivray (just prior to losing his seat to Wayne Walker in the 2007 election recount) and Greville Walker opposed the purchase in 2007. Cr Grev Walker recorded at the time that he was against buying the property on the grounds that the investment income would only service a purchase price of $3.2 million.

The historic building, plus the oaks, pepper tree and Norfolk pine on the property, are protected under the District Plan.
The Auckland Transition Authority has approved the sale.

Mayor Penny Webster was not available for comment.

Meanwhile, the lease of the building, trading as the Warkworth Tavern came on the market late last month.

The lease is owned by Warkworth Tavern Limited, has nine years to run and is for sale for $200,000 plus stock. Shareholders of Warkworth Tavern Ltd are Stuart Wells and Julie Baturic. The tavern includes a gaming lounge with 18 gaming machines.