The Hamilton City Council’s resurrected municipal endowment fund (MEF) is set to reawaken development interest in Hamilton’s central business district.
By reactivating the fund, council is opening up the doors to commercial developers to its multi-million dollar property portfolio.
As a result of property revaluations over the past year, the portfolio’s overall value has increased from $46.4m to $56.3m – a 20.71 per cent increase.
Comprising 13 property assets totalling $24.73m and reserves of $31.5m, the long-dormant MEF is being reinstated to its original purpose, councillor Ryan Hamilton says.
Ryan Hamilton
“Around the Julie Hardaker time when we had the V8 debt drama, they took the fund and basically used it to offset debt.
“That council took quite an austerity approach and reined in everything and cut spending.
“Potentially that was fit for purpose at that time.”
Uncomfortable with using ratepayer money on commercial developments, the fund was also put on hold during Andrew King’s time as mayor.
Chair of the Economic Development Committee, Hamilton says, in the current property market the council would be remiss to ignore opportunities to invest in the city and to fulfil the intention of the fund.
“There were requirements to preserve and grow the fund and when we were using it to offset debt, we weren’t honouring the legal intent of the fund.”
A prime example is council-owned land opposite the Claudelands Arena, currently marketed through Colliers as “an outstanding development opportunity … freehold development site adjoining the Waikato Events Centre and near Hamilton’s CBD precinct”.
“The council doesn’t own a lot of property now, certainly not strategic property.
“We are prepared to sell this piece of land provided the developer does something that meets the aspirations of the site.
“We’ve said those things might be a three or four-star hotel, some rental apartments with maybe some retail on the ground floor.
“We will go to market and see what comes back and evaluate potential developers against those criteria.”
Criteria for investment include commercial viability, returns on investment, delivering on the council’s key strategic plans, aspirational projects intended to make Hamilton “a better place”, and inspiring consequential developments by others.
“Council as a whole has to meet the full wellbeing around environment, social, community and economic. The endowment fund does tend to have more of an economic framework; it’s mandated around that.
“We are always looking for catalyst investments that also have good social outcomes and good community outcomes.”
Hamilton says council is looking for property investments, land banking for future developments, property development, partnerships/joint ventures, debt funding investments and equity partnership to generate returns to grow the MEF into the future.
The council’s decision to reactivate fund is also aimed at continuing to grow Hamilton as a city of the future, Hamilton says
“We’ve got to be good stewards and grow the fund for the benefit of the city.
“When you look at the CBD redevelopment in the next 10-15 years, Hamilton is going to be a force to be reckoned with.”
The Municipal Endowment Fund (MEF) was originally created back in 1886. Over the following 146 years it went through several changes and is now governed by Hamilton City Council.
The council set up Hamilton Properties Ltd in 1989 and used the property company to develop commercial and community sites, including the BNZ building, Novotel Hamilton Tainui in the central city and Pukete residential development, before retiring it in 1998.
