Risk and reward: The art of the dealing with complicated real estate


New Plymouth entrepreneur Philip Brown is used to taking property risks but a section of city real estate saddled with sea views and a complicated legacy, is one he won’t be taking a punt on.

Within 12 months, manufacturing at the Corteva agrichemical plant on Paritutu Rd, will stop for good, a move which will impact 35 jobs, but is already creating speculation regarding the site’s future.

What Corteva plans to do with the land has yet to be revealed, but selling it is one possibility.

If this happens, it would become the latest in a string of well-positioned but problematic sites, where buyers in the market would be weighing the costs of clearing up against potentially cleaning up in terms of future profits.

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* Multi-national chemical firm Corteva closing manufacturing operation at New Plymouth site
* Health checks for residents near Paritutu chemical plant labelled a ‘sham’

Some of the old, and contaminated, buildings at the former Barrett St hospital site in central New Plymouth. (File Photo)

GLENN JEFFREY/Stuff

Some of the old, and contaminated, buildings at the former Barrett St hospital site in central New Plymouth. (File Photo)

The former Barrett St hospital, and its asbestos-ridden buildings, is an obvious example of a prime piece of central city real estate being left to languish for years, a victim of the time and regulatory bureaucracy needed before it can finally get sorted.

However, with the right treatment, its current value of $5.3 million could easily skyrocket.

For Brown, who built the New Plymouth Novotel which he later sold to a Taranaki iwi consortium for $23m, the dollar signs aren’t the first thing he thinks of when considering the Corteva site.

“At the end of the day you can only see what’s above the ground.”

Entrepreneur Philip Brown says there are a lot of unknowns about the Corteva site so prospective owners will do their due diligence. (File Photo)

STUFF/Stuff

Entrepreneur Philip Brown says there are a lot of unknowns about the Corteva site so prospective owners will do their due diligence. (File Photo)

It’s what lies beneath which is the issue, he says, and anyone who expresses interest in any future opportunity to purchase the Paritutu Rd site, which has a land value of $3.5m, would in no doubt do their due diligence.

“There are so many unknowns about the site.”

While he has no interest, Brown says the possibility the area could be remediated (if that was deemed necessary) and reimagined could never be ruled out.

He says with the lack of available land in the city, the Corteva site could be “ideal” for subdivisions.

Turning an industrial site into brand-new housing stock is not without precedent in New Plymouth.

The old Cambrian Engineering site on Carrington Rd in on track to become a 32-home subdivision, following in the footsteps of house and land sections created on the former location of the Fresha Fisheries factory on Brooklands Rd.

In 2012, an old timber yard site on Morley St, opposite the Todd Energy Aquatic Centre, became a multimillion set of new properties.

The former Ravensdown fertiliser site in Waiwhakaiho is destined to become a massive retail complex. (File Photo)

Andy Jackson/Stuff

The former Ravensdown fertiliser site in Waiwhakaiho is destined to become a massive retail complex. (File Photo)

New developments often reflected their surroundings, so you’re more likely to see new homes built in existing residential areas, while industrial or retail spaces stick together.

A major retail complex mooted to replace the former Ravensdown fertiliser site in Waiwhakaiho makes more sense, for instance, than a stack of new apartments.

A June 2017 survey found the old fertiliser site’s buildings and soil riddled with asbestos, but that has not stopped its new owner, Tauranga-based developer Bluehaven Management, moving forward with an ambitious plan to replace it with a 30-store shopping mall, coupled with 75 hotel rooms.

Plans for the multimillion-dollar retail complex at the former Ravensdown site in New Plymouth, now owned by Bluehaven Management. (File Photo)

Supplied/NPDC/Stuff

Plans for the multimillion-dollar retail complex at the former Ravensdown site in New Plymouth, now owned by Bluehaven Management. (File Photo)

Land suitable for industrial or big retail ventures is in hot demand in New Plymouth.

Benet Carroll, an agent for Colliers International, says while he can’t comment on the Corteva site, general interest in industrial sites is through the roof.

“There is really good demand for industrial land and it’s still really, really strong in New Plymouth.”

Carroll says he has fielded interest from businesses across Australasia looking for a foothold in the New Plymouth property market, including industrial ventures and those involved in bulk retail.

Under the right conditions, there was some flexibility in terms of a site which was industrially zoned to become residential, he says.

“It very much depends on the location.”

Colliers International agent Benet Carroll says, in general, there is strong demand for industrial properties in the city. (File Photo)

Simon O’Connor/Stuff

Colliers International agent Benet Carroll says, in general, there is strong demand for industrial properties in the city. (File Photo)

Shaking the social stigma connected to some properties is likely another hurdle to overcome.

In Corteva’s case, the closure of its manufacturing arm will mark the end of era for the city.

The agrichemical company has had a presence in New Plymouth since 1944, but not without controversy.

Up until 1987, the plant produced the herbicide 2,4,5 T, which was an ingredient of Agent Orange, a chemical exfoliant used by the US military during the course of the Vietnam War.

A by-product of the herbicide is dioxin, a known cause of cancer.

In 2001, Taranaki Regional Council (TRC), who inherited the Paritutu Rd site in 1991 and sold it to agrichemical company six years later for $1.7m, launched an investigation after fears surfaced about the cancer-causing dioxin waste being buried at sites around New Plymouth.

No evidence was found of illegal dumping, and subsequent, ongoing testing done since has ruled out any major contamination concerns at the site.

Taranaki Regional Council director resource management Fred McLay says any remediation of the Corteva site will be the responsibility of the New Plymouth District Council to monitor. (File Photo)

Andy Jackson/Stuff

Taranaki Regional Council director resource management Fred McLay says any remediation of the Corteva site will be the responsibility of the New Plymouth District Council to monitor. (File Photo)

This week, in a written statement, TRC director resource management Fred McLay confirmed comprehensive site investigations conducted by council officers and the company found low-level traces of contaminants in a couple of places, but well within limits set by international guidelines.

“Ongoing modelling and monitoring by the company and council have shown there is no risk of migration beyond the site boundary.”

He says TRC had no regulatory role in any site remediation or development as such, as that responsibility falls to New Plymouth District Council (NPDC).

Under its watch, NPDC is responsible for determining whether a site investigation has to be done; that any inquiry completed is adequate; to regulate any remedial work; set the standard to which the work needed to meet; and complete final certification.

Teresa Turner, NPDC group manager community and customer services, says it is too early to speculate about the site’s future but it is committed to working with Corteva.

“NPDC’s view is that Corteva has a duty of care for that site and a moral responsibility to ensure the site is remediated so it poses no future threat to our community. Council will work with Corteva to achieve this end,” she says.

In a statement this week, Corteva repeated its past stance regarding the site, saying no decision had been made about future land use.

“However, in line with Corteva’s values and commitment to sustainability, the company intends to work closely with local authorities to ensure the appropriate management of the site for whatever future design is decided.”