On 15th February 2011 Penny Hulse, Deputy Mayor of Auckland Council, was quoted in the Western Leader saying re the possible sale of Council’s shares in Auckland Film Studios Ltd “But if it still creates employment for people in the industry in west Auckland we’d have to look at keeping it.” She went on to say “The way it is set up we don’t bear the risk. We are the property owner and landlord. If the company gets into trouble we still own the land and building. The ratepayers don’t need to be worried . There are no great losses at stake.” Since that article several people have commented to me “But the Council still owns the land and buildings.” That’s not so. They’re owned by Auckland Film Studios Ltd.
Below is a flow chart I presented to Auckland Councillors on 10th February 2011 when I addressed the Accountability & Performance Committee on the issue of the Film Studios and Tony Tay Film Ltd’s receivership.
The detail below comes from part of the minutes of a meeting held by Waitakere City Council on 25th May 2005 from which the public were excluded:
The preferred option brought to Council by Waitakere Properties Limited and Enterprise Waitakere as a result of the work with B&A Management is Option 5. In summary, the preferred option entails:
- Development of a new sound studio with the involvement of private sector equity;
- Contribution from New Zealand Trade and Enterprise of $888,889 (excluding GST) on the basis of acceptable private sector investments of at least $2.5 million;
- Sale by Council of its land and buildings comprising Henderson Valley Studios (current valuation $6 million) into a joint-venture company that will own these assets plus the new sound stage, in exchange for shares in that company to the same value;
- Creation of a joint-venture management company between Council or its nominee and B&A Management with Council or its nominee having a 40 percent shareholding;
- Possible additional investment of $3 million by private sector investors into the asset owning company to be invested in industrial property investments to increase the proportion of revenue generated from term tenants and thereby decrease the dependency on film studio occupancy;
- A management agreement between the Management Company and asset owning company that focuses on the Council maintaining a significant influence.
The proposed structure is set out in the following diagram:
|14th June 1996||B & A Management incorporated with directors and shareholders Andrew Maher and Andrew Coldicutt|
|20th Jan 2005||Prime West Ltd incorporated. Sole director & shareholder Andrew Maher|
|20th Jan 2005||Prime West Management Ltd incorporated. Sole director & shareholder Andrew Maher.|
|11th Apr 2005||WCC FOP(Finance and Operational Performance Committee) signalled its intention to continue its investment in Henderson Valley Studios.|
|9th May 2005||Kenneth Michael Williams appointed as director of Prime West Ltd|
|25th May 2005||WCC voted for Option 5 in confidential meeting|
|21st Jul 2006||Coldicutt’s share in Prime West Ltd cancelled.|
|21st Jul 2006||60,000 $100 shares in Prime West Ltd issued to Waitakere Properties Ltd (WPL) in exchange for land and buildings valued at $6m a year earlier.|
|21st Jul 2006||75,000 $100 shares issued to Tony Tay Trust Ltd.|
|21st Jul 2006||Tony Tay and Ross Jewel appointed as directors of Prime West Ltd.|
WCC elected to have WPL as a MINORITY shareholder in Prime West Ltd which removed the need for public accountability. Land and buildings were swapped for shares.
Proof of this is in the title search for Auckland film studios which shows that it is named as the owner of the land on which the buildings the illustrations of the title can be found in this related post