Marine Precinct sale: Audit review finds process okay but communication lacking

An Auditor-General review of the controversial $14 million Tauranga Marine Precinct sale has found the council followed an appropriate process and demonstrated it considered value for money.

It could, however, have done a better job of explaining the sale price to the public, the review found.

The Auditor-General previously declined to inquire into the sale, due to court proceedings at the time.

In a letter to the council last week, principal inquiries specialist Andrew Goddard said the Audit Office reconsidered because of new issues raised, further information provided, and time that has passed since the previous decision.

The council agreed to sell the Sulphur Point precinct – also known as Vessel Works – to Christchurch developer Sam Rofe for $13.987m in 2024.

The council was governed by a Government-appointed commission at the time.

The sale attracted public criticism, mainly because independent valuations of the site were millions of dollars higher than the sale price, with no open tender process followed.

The Audit Office's letter said an October 2024 council briefing put the valuation midpoint at $23.131m.

It found the council could explain the difference between the valuation and the sale price, which resulted from negotiations with the purchaser.

The price included deductions for the hardstand – which could only be used as a hardstand – and for risk.

Under the sale and purchase agreement, the council agreed to contribute up to $37m towards wharf upgrades and replacements.

The council would own the upgraded wharves and lease them back to the purchaser. The parties would share the revenue from their use.

Goddard's letter said the sale was a "policy choice" the council was entitled to make.

It was not for the Audit Office to decide if it was a "good" or "bad" deal for ratepayers.

The council's rationale for selling included that the precinct had been operating at an average loss of $1.5m a year in the five years before the sale and significant investment was needed to realise its economic potential.

It had twice failed to find a buyer for the precinct when it received a direct approach.

Staff advised that an open tender was a viable option but would take "some time", require a marketing campaign and might not work.

The council decided to directly negotiate with the buyer.

Goddard advised the council to consider making its policy clearer for when an open tender was required to dispose of assets, and to improve its public communications about financial decisions.

He said a lot of the information made public about the sale was technical, and did not help the council demonstrate how the sale price was set or how it represented value for money.

Providing clear information would help to prevent misunderstandings.

The Audit Office also found the council did not help finance Rolf's purchase, despite having used the phrase "term loan agreement".

It did not intend to carry out any further inquiry work into the sale.

Tauranga Mayor Mahé Drysdale – who previously described the sale as a "s*** deal" for the city – said in a council statement that he invited the Auditor-General to carry out the independent review.

"This transaction was completed before the current council was elected, and it is fair to say this council most likely would not have structured or approached the deal in the same way," Drysdale said.

Drysdale said the Auditor-General's conclusion was important and that the review found "no impropriety" in the commission's process.

It was for "those who made the decision" to explain and justify it.

"The sale is complete. We have inherited the terms, and our focus now is ensuring the Marine Precinct delivers the greatest possible benefit for Tauranga."

He said the council accepted the recommendations and that more transparency and clearer communication of complex transactions would help build public understanding and confidence in future decision-making.

The council said the new owner intended to develop the site into a purpose-built marine servicing facility.

Tauranga MP Sam Uffindell, a critic of the precinct sale, said those hoping for accountability over it would "feel let down" by the Audit Office's finding.

Uffindell and local Act list MP Cameron Luxton asked the Auditor-General to investigate the sale in November 2024, but were declined because of the court action.

The precinct sale was due to settle on November 22, 2024, but was halted by an injunction application.

The High Court dismissed this application in April 2025.

The first stage of the sale settled that month, with the second stage due to settle in April 2030, subject to conditions being met.