PHOTO: Chris Hipkins. FILE
The Government has disbursed $37.8 million to a major developer in a land transaction, following alleged threats to violate legal obligations and sell numerous KiwiBuild homes from under concerned buyers. Official Information Act documents obtained by Stuff reveal that The Neighbourhood Ormiston informed Kāinga Ora (KO) of imminent receivership, prompting Cabinet ministers to override Treasury advice due to potential harm to the KiwiBuild program’s reputation.
Chris Hipkins, Carmel Sepuloni, Grant Robertson, Megan Woods and Kelvin Davis were each named on a document seeking approval despite Treasury. Treasury opposed the deal
Previous reports detailed stage one buyers facing completion delays due to the developer’s engineer withholding approval, coupled with looming sunset clauses. Government staff informed ministers that without intervention, the developer might cancel agreements, reselling homes or entering receivership. Ormiston set an October 6 deadline, indicating intent to defy contractual obligations.
The 56 homes faced potential market resale at $770,000 to $830,000 each, exceeding the KiwiBuild purchase price. KO explored options, including lifting price caps on future stages, but Ormiston insisted on a $46 million payment for stage three, eventually negotiated down. Treasury opposed the deal, citing precedent concerns and potential fiscal risks.
KO investigated 373 KiwiBuild properties facing market value drops below purchase price. The Treasury objected to using KiwiBuild funds for the deal, emphasizing the $40 million cost outweighing benefits. Cabinet approval was sought for fund appropriation, naming Chris Hipkins, Carmel Sepuloni, Grant Robertson, Megan Woods, and Kelvin Davis.
KO considered contractual enforcement but feared nudging the developer into receivership. Ormiston claimed $77.1 million cost increases, disputed by KO due to inconsistent information. Ormiston’s director, Tony Osborne, defended the deal, asserting fairness and necessity, highlighting the Crown’s support for KiwiBuild completion.
Without government intervention, 56 buyers faced uncertainty after waiting two to three years for their homes. The Maher family, anticipating a move with a child, feared starting anew on the open market. KO, initially reticent, intends ministerial approval for a development scheme on the acquired land, leaving decisions for the new government.
SOURCE: STUFF