Council boss calls in legal hotshots

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Queenstown’s council has called in a top law firm over a consultant property manager’s possible conflict of interest.

Council boss Adam Feeley says Simpson Grierson will conduct an independent legal review of the purchase of a pricey Fernhill section by One Mile Holdings.

The company is part-owned by Dan Cruickshank - a council property manager contracted from local firm APL Property.

Feeley backs Cruickshank and APL: “From the information I have had available, I have been satisfied that there has been no prejudice to council from Mr Cruickshank acquiring the property, having declared his conflict.”

But he says if concerns are raised he’ll call in the Auditor-General.

There must be “the utmost probity in all council transactions”, he says.

The review was prompted by Mountain Scene investigation into negotiations between the council and One Mile Holdings, over access to Fernhill’s main reservoir.

Emails obtained from council records show Cruickshank raised access issues over the Fernhill block with the council in May 2013, in his professional capacity.

That’s just four months before One Mile Holdings was incorporated and bought the land. 

Cruickshank is a 6 per cent shareholder and director of One Mile Holdings.

Minutes from the council’s secretive audit and risk committee suggest a right-of-way agreement over the land might cost ratepayers as much as $250,000.

In a statement to Mountain Scene, Cruickshank says on behalf of the company’s directors: “The company considers that all necessary disclosure of the conflict was made to both APL Property and the council, which they have subsequently been responsible for managing.”

In May 2013, Cruickshank wrote to Peter Laurenson, Lakes Environmental’s acting boss, to say informal discussions about access took place with the company which then owned the Fernhill property - before that company went bust.

He adds: “Council will be looking to negotiate with the bank in possession of the land in order to try and resolve the right of way formally.”

Clearly those negotiations were unsuccessful - or didn’t happen.

Feeley says the council passed on an opportunity to buy the property.

And he’s now been told it’s no longer necessary to access the reservoir through that block.

Feeley says APL director Joanne Conroy advised him of the potential conflict in mid-2013.

In a statement, Conroy says APL followed the necessary process - disclosing the conflict to council prior to and after the purchase.

“Extensive measures have been taken to ensure all relevant information relating to the negotiation by council is kept confidential. We appreciate Dan’s work at the company and consider him a valued employee and colleague.”

Local Government NZ president Lawrence Yule says conflicts of interest need to be carefully managed and they’re best declared when they arise.

One Mile Holdings bought the 9100 square metre block on Fernhill Road in September 2013.

The plot’s rates valuation is $7 million and the site is thought to be ripe for apartments or terraced housing.

david@scene.co.nz