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1.
BACKGROUND
1.1
A letter was received from a Mr John Jenkinson (a builder) circa March 2010 enquiring if
CCDHB was interested in selling a 54 square metre section it owns situated at 29 Everton
Terrace, Kelburn, Wellington.
1.2
Over the next 3 years there was considerable correspondence between CCDHB and Mr
Jenkinson regarding whether a satisfactory contract could be agreed. The end result was
that no contract for its sale was concluded.
1.3
In late 2018, Mr Jenkinson again approached CCDHB to see whether this parcel of land was
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available for sale.
1.4
Since this time considerable effort has been applied by CCDHB to firstly understand the legal
obligations it has to release the land for sale and whether the quantum of the sale price is
aligned with market expectations.
1.5
Mr Jenkinson is attempting to purchase the CCDHB owned plot and has an agreement with
Victoria University to purchase their small lot which adjoins 29 Everton Terrace. Combining
these properties would give him the opportunity for a residential development.
1.6
It was noted in historical documentation that the owner of number 27 Everton Terrace (CPF
Limited) has been using a portion of our land to gain access to their property. As no formal
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agreement regarding legal easement was evident it seemed appropriate to also ask this
adjoining owner whether they were interested in purchasing this land to maintain their
access.
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1.8
Both Mr Jenkinson and
have been informed that CCDHB would be seeking
actual costs associated with the legal and mandated processes required to release this land
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for sale, on top of a market value
2.
LOCATION AND DESCRIPTION OF THE LAND
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2.1
The land comprises a steep unfenced predominantly grass covered, undeveloped bank being
54 square metres in area. The surrounding area comprises a high cost residential mixture of
villas, townhouses, apartments and student accommodation. There are no CCDHB related
services within the immediate area.
2.2
The adjoining owner to the CCDHB site, 27 Everton Terrace has a residential dwelling built
on a large 1,371 m2 site.
2.3
The owner of the land on the other side of 29 Everton Terrace is Victoria University. The area
of this land is approximately 23 m2.
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2.4
For land specific graphic location and description please refer to the attached satellite map.
3.
STATUS OF LAND
3.1
The land is currently under the ownership of Capital and Coast District Health Board as
identified in the Certificate of Title.
3.2
The property is “health sector reserve” within the meaning of the Health Sector (Transfers)
Act 1993 and “government purpose reserve” within the meaning of the Reserves Act 1977;
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and “public work land” for the purposes of clause 3 of schedule 1 of the Health Sector
(Transfers) Act 1993.
3.3
It was established earlier, by our Accredited Crown agent, that this land was provisionally
cleared of s40 under the Public Works Act (PWA) in February 1996. It was subsequently
advertised in the Maori Protection Mechanism. This advertisement would usually only
follow when a property was cleared of Public Works Act obligations.
3.4
Obtaining clearance under section 40 of the PWA will vary, dependant on who the successful
purchaser is. However, lifting of the reserve status is still required for both potential
purchasers.
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3.4.1
This gives Land Information New Zealand (LINZ) the
authority to approve the sale this land to an owner of adjacent land where they consider
that the land due to shape, size or situation precludes the sale to any other person. This
negates the need to offer back to successors [(sec 40(1) and (2)].
3.4.2
If Mr Jenkinson is the successful bidder then legal advice indicates that all processes required
under section 40 (1) and (2) will need to be completed.
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4.
VALUATION
4.1
The land parcel has been assessed by Colliers at a value of $35,000 excluding GST.
4.2
The valuation was based on the land being acquired as additional land to the site. This would
therefore confer benefits as an amalgamated parcel through its greater future development
potential, especially given its favourable zoning and height limits, and improvements to the
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driveway access or possibly for further off-street parking or landscaping enhancements.
4.3
Further investigations revealed that it appears that part of the land is already used as access
for 27 Everton Terrace, by way of an informal encroachment. No documentation can be
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located to formalise this encroachment. As this is the sole vehicular access to 27 Everton
Terrace its loss may, on a value reduction basis, be greater than the $35,000.
5.
SELECTION OF PURCHASER
5.1
While negotiations with Mr Jenkinson are at an advanced stage with a draft agreement to
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sale, legal advice has been received from Greenwood Roche confirming CCDHB does not yet
have an agreement to the sale.
CCDHB is obligated to achieve the highest value from the sale of the property and will
achieve this by negotiation with Mr Jenkinson and
5.3
While we understand that Mr Jenkinson is likely to be unhappy if CCDHB withdraws from
negotiations at this stage and may attempt to maintain that CCDHB is now required to sell
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the land to him, we cannot see that CCDHB is bound to do so at this stage from a legal
perspective. Mr Jenkinson has been advised of the process CCDHB must follow.
5.4
Research could indicate that the land was included in the Maori Protection mechanism and
part of the Port Nicholson settlement, though it is not registered on the title. This could
trigger the Right of First Refusal (RFR) requirements of the settlement and require an offer
to sell to Tenths Trust under this RFR.
6.
SALE PROCESS
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6.1
Before any sale can be concluded
CCDHB must meet the requirements of
the Ministry of Health’s disposal process, the Public Works Act and remove the current
reserve status off the land (a hangover from the parent lot which was sold many years ago).
This is specifically:
The revocation of the reserve status of the land under section 24 of the Reserves Act 1977;
and;
All approvals needed under section 40 of the Public Works Act 1981 to sell the property.
Noting that these differ for each of the potential purchasers.
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Minister of Health requirements contained in the “Guidelines for disposal of DHB Land”
dated December 2010.
6.2
The “Guidelines for disposal of DHB land” requires the DHB to advertise its intention to
dispose of the property and note any public response accordingly, and quantify expected
proceeds (include in Annual Planning) and its intended use. Ministerial approval can be
given subject to the DHB complying with its statutory sale obligations (e.g. PWA and RFR).
6.3
It is the intention of CCDHB to seek an exemption from this particular requirement given the
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very small size of the land, its ultimate value and restricted use and interest other than to
someone who is an adjoining owner i.e. CPF Ltd or Victoria University. Noting they have both
been contacted regarding this proposal.
6.4
If the purchaser is
) section 40(4) of the Act
should streamline the process by having LINZ approve a sale without going through the
formal mechanisms of section 40.
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6.5
The other potential purchaser is not an adjoining owner and therefore we envisage there
will be more complex approvals required under section 40 such as offer back under our
treaty obligations and assessing whether there are any other central agencies interested in
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acquiring this land for housing or conservation purposes.
6.6
It would be beneficial for the DHB to work with a property professional who is a “LINZ
accredited supplier” to assist in the process. The accredited supplier should undertake
investigations to consider former owners and likely PWA offer back obligations – these
investigations can be completed including consultation on behalf of CCDHB with DOC, HNZ
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and the Wellington City Council. Note this full requirement may not be required if section
40(4) of the PWA can be used in the event
are the successful purchaser.
7.
NEXT STEPS
7.1
Following the declaration by the Board of its intent to declare the property surplus to the
DHB’s requirements the next steps would be:
Instruct a property professional who is a “LINZ accredited supplier” to assist with the
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disposal process.
Notify the Department of Conservation (DOC) of the proposed intention to sell to
determine whether DOC would include a marginal strip notation on the titles to the
properties.
o Ask DOC to confirm whether there are any conservation ‘values’ related to
present on the properties, which would assist in satisfying the Values Protection
Policy,
o Ask DOC to confirm whether a separate public notice will be needed to revoke
the “Health Sector Reserve” status if the Minister of Health has approved the
revocation under section 24(6) of the Reserves Act 1977.
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Give notice to Housing New Zealand to enable HNZ to consider if the land would be
suitable for State Housing.
Consult with Council with regard to whether any public walking tracks crossing the
properties should be protected by easement and whether the Council wishes to purchase
the properties for recreation/heritage/public works purposes.
7.2
If the DHB is aware that another government entity (apart from DOC, HNZ and the Council)
might want to purchase the properties for public works, consult with that government entity
about a possible transfer.
7.3
Seek Ministerial approval in accordance with the “Guidelines for DHB Disposal of Land”
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issued by the Ministry of Health Dec 2010.
7.4
Seek approval from the Minister of Health for the revocation of the “Health Sector Reserve”
status to allow sale under the PWA, under the RFR or under a market sale. (This could be
requested at the same time as the Ministerial approval to sale.)
7.5
Obtain the agreement of the Minister of Conservation to the revocation of the “Health
Sector Reserve” status. The Minister of Conservation can revoke this status without
following the standard reserve revocation process if the Minister of Health has approved the
revocation (DOC to advise whether a public notice will be required).
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7.6
If required by LINZ, supply LINZ with a report and recommendation from the LINZ accredited
supplier which contains all relevant information and requests that either the properties be
cleared of section 40 PWA offer back obligations or an offer to the former owners (or their
successors) be made.
7.7
If there is a section 40 PWA offer back obligation, make the offer and await acceptance or
non-acceptance within 40 working days.
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7.8
If required offer the property for sale to the Port Nicholson Block Settlement Trust under the
Right of First Refusal provision in its Treaty settlement.
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