The former Whau Lunatic Asylum, now used for lessons, has A-grade heritage status and will likely be turned into apartments. Photo: Bruce Morris

This story first appeared on Mt Albert Inc and is reprinted here with permission.  

Bruce Morris finds the Government’s housing deal with Unitec was a happy marriage of high ambition, blessed with perfect timing. But there may be awkward times ahead for both parties

The new coalition Government was knocking on Unitec’s Mt Albert door chasing a housing deal straight after it was sworn in, quickly forging a $134m pact and shutting out private developers.

Labour couldn’t have got out of the blocks any quicker – ready to run as soon as Winston Peters decided which party he would go with.

The coalition agreement was signed in late October and Phil Twyford, the architect of the KiwiBuild programme promising 100,000 affordable houses in a decade, was named Housing Minister a day later.

After nine years to plan while in Opposition, the new minister was the guiding force when negotiations opened with Unitec’s Wairaka Land Company subsidiary in November, ending in a conditional agreement to buy the land in mid-February. The transaction was announced with plenty of fanfare on March 25 and settled on April 16.

It was a dream agreement for a government needing to show its commitment to tackling a housing crisis that National had allowed to fester.

Tying up 29ha of city-fringe land from a friendly and anxious seller to accommodate 3000 to 4000 new homes – under the noses of keen private developers not fussed with the idea of building affordable houses… what wasn’t to like about that for a Labour-led coalition?

Yet had the election been a few short months later, KiwiBuild may have been forced to look elsewhere for its high-volume start because the sitting National Government would happily have left it all to private enterprise.

For financially-stressed Unitec and its grand plan to sell off surplus land to fund the future, it was all very sweet timing – as suggested in the key dates laid out in its 2017 annual report.

The tertiary institution had just started its search for buyers and drew quick and serious private interest, but nothing quite as appetising as that offered by a Government in a hurry.

After five years of falling rolls and income – with knockbacks and the endless costs of administering a vast property with scores of ageing buildings not intended for teaching – the country’s biggest technology institute faced serious liquidity issues.

Many of the buildings, inherited from the old Carrington Technical Institute over 40 years ago and from the Ministry of Health when Carrington and Oakley hospitals closed around 1990, are decaying liabilities. Most of them will go in the development.

But the landmark original mental hospital, originally the Whau Lunatic Asylum built from the 1860s, has A-grade heritage status and cannot be demolished.

With perhaps tens of millions of dollars to be spent on seismic protection alone before the stately Victorian building can be turned into fancy apartments, Unitec is surely delighted to be rid of the millstone. (In the meantime, though, it will continue to be used for teaching architectural and creative industries courses.)

The institution’s plan to create a compact education precinct of perhaps 10ha and sell its remaining 40ha-plus began to take serious shape when the new supercity Unitary Plan created the Wairaka Precinct and zoned 29.3ha of the Unitec land land open to intensive housing.

The key objective for Unitec when the coalition came calling was a clean deal at a fair price, and nothing could be more attractive in the property game than an unconditional contract involving money shifted between Crown accounts.

The Government negotiators pitched a price that may have fallen short of true competitive market value, but it came without reams of caveats and allowed Unitec to continue using buildings on the land until the end of 2021.

Most important of all, it came with the cash upfront.

In a few short weeks, Unitec (in breach of its banking covenants at December 31 and under pressure) pushed aside private enterprise and took the secure state option, almost instantly wiping out its $108.5m debt.

The Government price was $134m, less $3.08m the institution was required to pay in a March 2017 agreement over the legal transfer of extra parcels of Crown-owned land on the block.

Now the minister and his KiwiBuild team are looking to forge a partnership with Ngati Whatua (with whom it has treaty obligations to regard as first cab off the rank) and working on a masterplan to squeeze in those 3000-4000 homes or apartments. Twenty per cent will be state housing, 40 per cent KiwiBuild and 40 per cent for private sale.

While Unitec gets on with the business of mapping its unclear future – with a new $35m bank borrowing facility to ease the way – the housing target still raises eyebrows.

The institution’s own masterplan to pitch to private developers envisaged 2675 houses and apartments. But up to 4000 dwellings? From the outset that seemed optimistic when housing was to cover just 19ha, though the minister soon hedged on the preciseness of the land set aside for actual buildings. Green space may become the casualty at that upper limit if it is still the aim.

The “gold standard” promise offered to locals by the Prime Minister will be judged in seven or eight years, with initial building not due to begin until well into next year.

But KiwiBuild has land in the bank, and perhaps the option of picking up a decent chunk more that will be surplus to Unitec’s future compact education hub.

Pre-agreement, Unitec owned 83 per cent of the 64.5ha Wairaka Precinct and its holding has now been trimmed from 53.5ha to 24.2ha. In the past, it has suggested its hub could be comfortably contained in 10ha, suggesting a further 14ha may be available to a future buyer.

Of the other Wairaka Precinct players, Ngati Whatua owns some smaller lots, but has its own plans to develop those, perhaps yielding up to 500 or 600 units.

For the full story, and details of Unitec’s original plans for its site and what lies in store for the insititution now, go to

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