High-rise hotel site comes to market by mortgagee tender

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A development site uniquely zoned for a multi-storey hotel is for sale near central Queenstown. 

The 9107 square metre site behind Heritage Villas, off Fernhill Road, is for sale by mortgagee tender through Bayleys. 

Under the district plan, a buyer of this vacant land can build higher than 10m at the discretion of the council. 

Queenstown planning consultant John Edmonds, in the Bayleys information memorandum, says: “This is the only site in the district where additional building height has been intentionally anticipated and provided for by the district plan. 

“In all other cases throughout the district, a breach of height requires ‘non-complying’ activity approval.” 

The site, along with land later developed for the Heritage Villas and the Heritage hotel opposite, was originally owned by Queens­town Lakes District Council. 

Twenty years ago, the council controversially sold the entire site, on either side of Fernhill Rd, for only $2,050,000. Since then, at least three resource consents have been issued for the land that’s now for sale but none of the plans have got off the drawing board. 

The first plan was for about an eight-level hotel with two towers. 

A multi-storey hotel was also proposed by Heritage Villas developer Rod Nielsen, who was later bankrupted. 

The most recent proposal – which was twice presented to the council’s urban design panel but never lodged for planning approval – was for an upmarket 160-room backpackers on about six floors. 

Backpacker developer Homebush Trustees Ltd was placed in liquidation in 2011. 

That same year, site owner Brick Street Properties was also placed in receivership. 

According to the latest receiver’s report, Brick Street owes first creditor NZF Money Ltd – itself in receivership – $3,996,599. 

NZF Money’s receiver has now commissioned Bayleys to sell the property. 

The site – comprising two titles, one of 7034sq and one of 2073sq m – has an overall capital valuation of $7,075,000. 

Local Bayleys salesperson Dave Fea expects keen interest. 

“It will appeal to developers and land bankers who have a view to cash in and benefit from Queenstown’s next property cycle. 

“Queenstown has a limited supply of hotel and apartment development sites. 

“It is well-located … approximately two kilometres from the Queenstown CBD,” he says. 

The original site was sold by the council on the proviso it could only be used as visitor accommodation. 

However, Edmonds notes: “We have been successful in previously amending this covenant for those units that surround the site which allows them to be used for residential purposes.” 

The information memorandum notes several existing easements. 

Local Clark Fortune McDonald & Associates planner Emma Dixon, in an attached letter, says some can be removed or amended, subject to appropriate approvals and consents. 

If the easements are removed or amended, “it will enable an increase in buildable area from approximately 2500sq m to 7100sq m”, the letter says. 

The tender deadline is June 12.