Dire picture painted by Auckland Trotting Club Auditor

[ivanthegreat 1,123]

From the outset Canam encountered problems with the foundations. Unstable volcanic rock forced the club’s engineers Engenium to fill cavernous holes with concrete and to use piles instead of concrete bases under each column of steel, at an extra cost of more than $5 million, putting the build a year behind schedule.

Meanwhile the Australian company Ganellen, hired to construct two more apartment buildings, had even worse problems with its foundations.

In April, 2018, the Auckland City Council ordered a halt to all work on both projects, citing issues with the steel, bought from China, and breaches of the building consent through lack of inspections. It took three months to resolve the issue.

While the parties bickered about who was responsible, questions arose on why the club had engaged Engenium, whose engineer Alan Reay designed the Christchurch CTV building that collapsed during the February, 2011 earthquake, killing 115 people. Reay escaped charges but was later criticised by a Royal Commission.

The trotting club’s steel was supplied by Reay’s long-time associate property developer Bert Govan’s Challenge Steel which later went into liquidation owing $10 million.

Unhappy with Canam’s progress on the job, the ATC terminated Canam’s contract in July, 2018, and appointed another Auckland company, CMP Construction, spending many millions correcting Canam’s mess.

Another major disruption that cost millions and months to fix came when the wrong cladding was put up on the buildings and had to be pulled down and replaced.

Ganellen also took a case against the ATC, believed to be for more than $13 million for lost time and variations to its contract. Despite repeated assurances from its legal advisors that the club would win, the judgements came back in favour of Ganellen and the club ended up paying out an undisclosed amount in a mediated settlement.

Insiders believe much of the legal fee haemhorraging could have been avoided had the club sat down and discussed the issues with its contractors, rather than pointed guns at each other.

ATC directors served with legal papers

Unknown to its members, Ganellen served every director on the board with legal papers, saying they could be personally liable for acting unreasonably in not trying to work out a solution.  

But, according to one inside source, perhaps the most costly decision the board made in its naievity over property development, was not taking the chance to mitigate its losses when various sunset clauses were activated after the project fell years behind schedule.

With all the delays and with costs of labour and materials rising, most savvy property developers would have revised the price of the apartments to more like market level. The units had already risen in value by 20 to 30% over the years so investors would not have suffered.

President Bruce Carter, however, was determined to honour the club’s word to buyers, passing on the chance to recoup tens of millions of dollars, the suggestion also that he feared people might choose to walk away and a glut of apartments would come up for resale.

Ultimately, it appears the turnaround on a project initially projected to earn the club $48 million, came down to a lack of construction expertise on the board, though many sitting round the table were reportedly often never privy to dispute details, handled by a dominant president and CEO. 

The project was developed and managed by CEO Dominique Dowding, who had no experience in property development when she came to the club in 2012 after seven years as the sales, marketing, events and entertainment manager at the Christchurch Town Hall.

Dowding, who was also responsible for the investment, funding and all legal and financial reporting, won the Auckland Property Council’s inaugural Women in Property Award in 2016 for her ongoing leadership on the significant urban village.

A citation at the time said: “As chief executive, Ms Dowding has led the board’s strategic turn-around of the 126-year-old iconic Auckland Trotting Club to put it on a more commercial footing, ensuring its long-term financial sustainability and the survival of harness racing in the northern region.

Dowding left the club in March, 2019.

[meomy 971]

On 12/28/2021 at 9:54 AM, We're Doomed said:

Would the committee members of the club be legally liable for the losses, in much the same way as the Jenny Shiply case?

Not only Committee members but also Council staff and Contracted Agents who allowed this apartment complex to be permitted in the first place.

The lack of basics with Town Planning and why things were set out in the manner they used to be was undertaken in the way it was for a reason.

There's a lack of practical life experience now with kids at school, when they attend school, not helped one bit by the dumbing down of New Zealand with people from completely different countries backgrounds to our own who don't care.