Leases Lead To Fortune

Sun (Auckland), Volume 1, Issue 52, 24 May 1927, Page 8

Leases Lead To Fortune

Original Waterfront Sites

“ANE shilling - , if demanded”—that is the annual rent of ’LI several valuable sections in the heart of the business quarter of Auckland. Picture the Harbour Board, which owns the properties, going round to wealthy firms to collect the year's rent. The history of the leases dates from early reclamation efforts, and is a quaint phase of Auckland’s development.

A CCORDING to the Harbour Board's ■ J ‘* m annual statement of accounts, there are in Customs Street and Gore Street a dozen or more lots occupied virtually rent free. The rent as quoted, is one shilling if demanded, a trifle more than the traditional peppercorn.

The meagre shilling is never demanded. Such a return would not pay for the bookkeeping involved. The ridiculous terms on which these properties are occupied cannot be charged to the discredit of the Auckland Harbour Board. The sections came to the board as a legacy from the old Provincial Council, which undertook early reclamation projects. Having raised the land—Customs Street was then a newly-created waterfront quay—the council went on to dispose of the building lots, but did not discover a brisk market. The tenure was for 86 years, and the rent merely nominal, and on those terms the attractive leases were auctioned. LEASES CHANGE HANDS

Probably the original buyers doubted if they had struck a fair bargain, but the manner in which all the leases have since changed hands, at high figures, suggests that those who got in early were the lucky ones. Among the original lessees were Messrs. C. J. Hutchinson, H. and E. Isaacs, H. Brown and J. M. Geddes, A. Rooney, T. C. Law, W. S. Laurie, J. Casey, D. Simpson and J. L. Campbell. The Campbell property, in Gore Street, is the only one that has not changed hands, and the executors of the estate are still responsible for the shilling, if the Harbour Board cares to demand it.

The apparent philanthropy disclosed by the terms of the leases is offset to some extent by the fact that at the end of the term the board takes over all improvements, without compensation, and there is no renewal clause. Under the circumstances the present lessees are not likely to burst into the

limelight with elaborate building schemes and in 1959, when the expiring leases are re-auctioned, the existing buildings will not add much to the value of the properties. The Harbour Board’s association with the shilling leases goes back to 1876, when the Provincial Councils went out of business. In handing over the free rentals the council omitted to surrender any of the money paid for the leases, but in those days, apparently, that was by the way. MORE BUSINESSLIKE Arrangements much more businesslike were made when the board fixed its own leases. Hence the rents of adjoining properties were as high as £371 per year, and in many cases the leases terminate earlier. Some of the lease’s provide for half compensation for improvements, but very few —and those only in outlying residential areas—provide for perpetual right of renewal on the Glasgow system. Much valuable property is let on nominal terms for the benefit of civic institutions, and rowing clubs and other sports bodies have been handsomely assisted. As for the fondly remembered peppercorn, the board is entitled to only one, payable by the Devonport Borough Council in return for the strip of foreshore between Calliope Dock-and North Head. THE ADJUSTMENT IN 1959 With the shilling a year leases, the position for the present is that the lessees in possession may stay in occupation, or sell and sell again, and the ratepayers will benefit not a jot. In 1959, however, there will come a day of reckoning, and the values will be readjusted on a reasonable scale. As a result there will be a sudden accretion in the volume of gold flowing into the Harbour Board’s coffers, and the day of a free port for Auckland will either be at hand, or appreciably nearer.