Councillors will meet in secret to vote on a $1.5m dollar deal, paid to a property developer to halt legal action and demolish and renovate a derelict and run-down block of shops.

Upper Hutt City Council will weigh-up giving the cash to the Ganson Group, which owns Upper Hutt Mall and a neglected, adjacent Main Street complex, once slammed for giving off an “earthy smell.”

It comes despite the company previously failing to meet its obligations under a $1 million redevelopment deal and later suing the council after the agreement was terminated.

Documents obtained by The Post reveal that councillors will decide today (Wednesday 14th of May, 2025) whether to approve the new deal, which would see Ganson drop its court action in exchange for the fresh funding.

Mayor Wayne Guppy — who once called the block “an eyesore” — said he was unable to comment until after the closed-door meeting.

The council responded to questions threatening legal action if The Post chose to report on the proposal before the meeting. The paper says the public are to be excluded from the meeting to “enable Council to carry on, without prejudice or disadvantage, negotiations.”

The Ganson Group did not respond to a request for comment.

Local government sources spoken to by The Post have drawn parallels with the failed Reading Cinema deal, which saw Wellington City Council blasted for giving the entertainment giant corporate welfare.

Mayoral candidate Peri Zee, an urban planner, said ratepayers would be “incredibly concerned” by the proposals.

“Council has forked out a lot of money for no community benefit and they look to be continuing down the same path again. The proposed deal would lock up the city centre and compromise any future revitalisation projects that could deliver on community values,” she said.

“Debt funding corporate welfare at a time of high rates rises is simply absurd. That this has been happening behind closed doors for more than a decade with no independent analysis raises serious concerns about transparency and accountability.”

In a 2015 agreement, the council agreed to provide $2.5 million plus GST to the developer in four tranches over five years.

It was contingent on milestones being completed, including increasing the number of jobs on the strip, and finishing the redevelopment of the Main Street precinct, which is also bounded by Logan Street, Centre Walk and Queen Street.

The council paid out over $1m but the development stalled and in 2019, Ganson requested an extension to December 2022, claiming interest from a “major retailer,” the council paper says.

The company then came back to the council seeking to change the agreement and proposed new milestones. That included the refurbishment of the Old Defence Building on Main Street and the demolition of buildings bordering Queen Street to build a new 3000sqm property.

After months of wrangling, Ganson launched court action claiming a breach of the agreement.

The case is set down for an eight-day hearing next month. So far the council’s legal costs are close to $300,000.

That has been borne by ratepayers. Officials propose the deal is debt-funded. They also point out council would be required to hold $1.5 million of funds up to 30 June 2030, meaning it wouldn’t be available for other purposes..”But in a bid to stave off litigation, council officials have inked a new deal with Ganson.

That would see $450,000 paid when former Hazlewood’s department store, left vacant by the Defence Force in 2017, is revamped into retail space and a four-year lease signed by appliance store Newbolds, or another large format retailer.

Another $150,000 would come when the Main Street building currently occupied by Newbolds is occupied by another retail tenant with a four year lease.

The final $450,000 payment would see 76-80 Queen Street, once home to United Video and The Pet Centre, demolished, remediated and transformed into at least 2,000 sqm of retail and car parking space with another four-year tenant.

“The objective of the original proposal…was to create an invigorated Upper Hutt Central Business District and an environment that was a vibrant shopping destination,” the report says. If the new milestones were met “some buildings in the Upper Hutt city centre will be developed and tenanted, which may increase retail activity and vibrancy in the area,” it adds.

The paper also points out the risks to council. That includes the firm prioritising the less expensive Main Street developments and not undertake the Queen Street refurbishment, leaving the buildings untenanted or partially filled, and of drawing in existing city businesses.

It also raises concerns about the potential for cheap or unattractive developments. And it notes entering the agreement also carries the risk of future litigation.

This article has been reproduced from The Post.

14/05/25