Ace in the hole

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The site’s half-dug – complete with consent for new Hilton Hotel.

If Hendo’s Hole is a bit rich for your blood, you could always look at the Hilton Hole.

Bayleys Queenstown this weekend embarks on an international campaign for mortgagee tenders on the semi-excavated 1.2ha site between the two blocks of Pounamu Apartments on Frankton Road.

With a valuation of $10.4 million, the half-dug “hole” has consent for a $60m, 103-room five-star Hilton Hotel.

Now-bankrupt Auckland developer Dan McEwan’s hotel development company Pinpoint Trustees was liquidated last November by Inland Revenue – but its consent, which took 26 months to win, remains in place.

Bayleys earlier this year sought international tenders on the 31ha Five Mile site – famous for its Hendo’s Hole excavation nicknamed after troubled Christchurch developer Dave Henderson – but the prime property is still unsold.

The Frankton Rd tender closes on July 14, with Bayleys being instructed by mortgagee ANZ Bank.

The site has value because it’s the only undeveloped land in town with a hotel consent in place, according to Bayleys commercial agent Barry Robertson.

“It makes it more valuable because you know what you can do with the property, as opposed to a large area of high-density land without a consent in place.”

A proposed Queenstown Lakes District Council plan change also makes it even harder to win consent on similar high-density developments, Robertson says.

Pinpoint Trustees, which bought the entire former Mountain View Lodge property from Skyline Enterprises in 2003 for $15m, first developed the Pounamu Apartments on the road frontage.

Pinpoint then caused a hue and a cry with initial Hilton plans protruding 5.5m above the 7m height limit in places.

McEwan then lowered the building by 1.5m but QLDC planning commissioners still ruled its adverse effects were “more than minor” – shading a property below, reducing or destroying neighbours’ views behind it, and visually dominating a section of the resort’s main entranceway.

Pinpoint scaled things down a further 1.6m, lopping off about 20 rooms and much of the sixth floor.

After extensive mediation between the development company and objectors, the Environment Court finally signed off a 103-room Hilton in April last year.

McEwan then announced he’d separately apply for another 40-odd rooms to make the hotel more viable but this was never pursued.

The controversial developer also pledged to travel to Europe for construction funding so the hotel could open before the 2011 Rugby World Cup.

There was talk of some Pounamu units being brought into the new hotel operation, Robertson says.

The second Pounamu block of 34 apartments remains unoccupied because of a legal feud.

Strategic Finance and co-lender Bank of Scotland have been chasing apartment investors for about $20m in settlements but many buyers claim they signed up with McEwan as shareholders rather than apartment purchasers.

They claim they should have been given a registered prospectus.

Last December McEwan was separately convicted of selling properties to non-habitual investors without a prospectus.

Pounamu Prime, the McEwan company developing these apartments, went into receivership two months ago.

McEwan, who was also promoting a 104-lot rural subdivision at Queenstown’s Bob’s Cove and a commercial project in Kingston, also tried for another Hilton in Dunedin’s former chief post office.

That property also went up for mortgagee tender in February this year.