Council venture hit by slowdown
27 October 2005
By BETH CATLEY
The Ridgeways Joint Venture subdivision has been hit by the slowing property market, and is unlikely to make the $2.4 million the Nelson City Council had budgeted for this year.
Last year, the subdivision made just $385,000 for the council compared with the $3 million it had expected.
A report to the council's corporate governance committee said this shortfall was the result of section sales having been put on hold for most of the past year.
The report said the project's completion date had been extended by two years to March 2008 because of the stalled sales, and the slower sales now being experienced.
But Ridgeways Joint Venture chairman Seddon Marshall said that ratepayers should not worry the council's investment in the scheme would be lost, as the 220-section subdivision was now making pure profit.
"This has been a brilliant revenue producer for the city and has taken pretty much unusable hill country and turned it into one of the city's best ... subdivisions."
Mr Marshall would not reveal why sales had been stopped for the better part of a year.
The slowing property market after 2003's boom meant the joint venture was expecting the remaining 30 sections to take about two years to sell, although all forecasts were subject to changing circumstances, Mr Marshall said.
"We know that we have got incredibly good sections and certainly some of the best in the district."
Council chief financial officer Chris Fitchett said the council had paid back the loan it used to pay for the development about three years ago, and since then about $5 million profit had been made.
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27 October 2005
By BETH CATLEY
The Ridgeways Joint Venture subdivision has been hit by the slowing property market, and is unlikely to make the $2.4 million the Nelson City Council had budgeted for this year.
Last year, the subdivision made just $385,000 for the council compared with the $3 million it had expected.
A report to the council's corporate governance committee said this shortfall was the result of section sales having been put on hold for most of the past year.
The report said the project's completion date had been extended by two years to March 2008 because of the stalled sales, and the slower sales now being experienced.
But Ridgeways Joint Venture chairman Seddon Marshall said that ratepayers should not worry the council's investment in the scheme would be lost, as the 220-section subdivision was now making pure profit.
"This has been a brilliant revenue producer for the city and has taken pretty much unusable hill country and turned it into one of the city's best ... subdivisions."
Mr Marshall would not reveal why sales had been stopped for the better part of a year.
The slowing property market after 2003's boom meant the joint venture was expecting the remaining 30 sections to take about two years to sell, although all forecasts were subject to changing circumstances, Mr Marshall said.
"We know that we have got incredibly good sections and certainly some of the best in the district."
Council chief financial officer Chris Fitchett said the council had paid back the loan it used to pay for the development about three years ago, and since then about $5 million profit had been made.
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