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$90 Million, No Asset: The Truth About 90 Devonport Road

Review of Corporate Infrastructure: Capital Markets Takeover

From Public to Corporate Ownership

  • Once, roads, offices, and utilities were community assets.

  • Today, they are increasingly owned by capital market vehicles: property funds, infrastructure trusts, PPPs.

  • The Property Income Fund owning 90 Devonport Road is a prime example: public money pays rent, while equity and tax benefits flow to investors.

The Mechanics of Transfer

  1. Build with public planning – Councils justify need.

  2. Fund with private capital – Ownership is vested in funds, not the public.

  3. Lease-back to the community – Councils pay escalating rent with no asset at the end.

  4. Capital market gain – Rent becomes dividend streams for investors, often overseas.

Consequences

  • Debt without equity: The community funds infrastructure but owns none of it.

  • Perpetual rent cycle: Every generation pays again for the same services.

  • Profit line offshore: Wealth extracted from Tauranga doesn’t circulate locally.

  • Strategic vulnerability: Councils trapped into corporate dependence, with no exit strategy.

Case Link

  • 90 Devonport Road = Textbook transfer:

    • Public need (Council office) → private build (Willis Bond/LT McGuinness) → fund ownership (Property Income Fund) → lease-back at double cost.


02 Sep 2025 13:15 -------------------------------------------------------------------------


Dear Marty,

Thank you for your letter of 29 August 2025

As you know, candidates for the mayoralty are expected to demonstrate due diligence in understanding Council’s fiscal responsibilities and commitments that they will have to manage.

In preparing for 2028, I am beginning this process.

The leasing of 90 Devonport Road has become a matter of discussion within the community, and I must be able to provide clear and accurate answers.

Accordingly, could you please outline the total cost to the public of this decision, including:

  • Lease arrangements and term
  • Fit-out expenses
  • Ownership of the land and whether land cost is included or separate
  • Depreciation treatment, and how this impacts ratepayers
  • Number of staff to be accommodated
  • The eventual fiscal outcome of the arrangement
  • The planning and construction timeline, including whether purchase or community ownership was considered
  • The strategic plan for 5–15 years: what happens at lease expiry? Will Council face relocation, or higher rents dictated by the Property Income Fund?

In particular, I seek clarification on the rationale for choosing a lease structure with no asset accumulation, rather than an ownership model that would leave the community with a lasting asset.

This request is made as part of my due diligence responsibilities and in the spirit of transparency.

Nāhimi Mai,

Respectfully and sincerely,

Ian Stephenson

2028 Mayoral Candidate

Please note: All correspondence is open for public review

--------------------------------------------------------------------------------------------------------------



Link: Property Income Fund

$90 Million, No Asset: The Truth About 90 Devonport Road

In March 2025, Tauranga City Council moved into its brand-new offices at 90 Devonport Road.

On the surface, it looks impressive:

  • New Zealand’s largest mass timber office building.

  • A 6 Green Star accreditation, with more sustainability awards on the way.

  • The entire Council administration finally under one roof after more than a decade apart.

But behind the glossy marketing, there’s a fiscal truth that ratepayers must not ignore.

Who Really Owns 90 Devonport Road?

Not Tauranga.
The building is owned by the Property Income Fund — a corporate landlord.

Council is merely a tenant.
That means:

  • The community pays around $90 million over 15 years in lease commitments.

  • At the end of the lease, we own nothing.

  • The building, fit-out, and asset equity all remain with the Property Income Fund.

The Fiscal Trap

  1. Build Cost vs Lease Cost

    • Build cost: $45 million.

    • Council’s lease cost: $90 million.

    • Double the price, with zero equity.

  2. Fit-Out

    • Paid for by ratepayers.

    • Left behind at the end of the lease.

  3. Depreciation

    • The corporate owner claims depreciation as a tax benefit.

    • Council books depreciation as an expense — effectively passing the cost back onto ratepayers.

    • A double hit to the community.

  4. The Lease Endgame

    • What happens in 15 years?

      • Move out and repeat the cycle at new cost?

      • Or stay on, trapped into higher rent from the same corporate landlord?

    • Either way, the public loses.

The Real Question

Why did Tauranga City Council choose to fund corporate ownership through lease payments, rather than secure community ownership and build long-term equity?

This decision isn’t just questionable. It’s the very definition of fiscal irresponsibility.

Due Diligence Demands Answers

I have written to the CEO of Tauranga City Council requesting full disclosure:

  • Lease arrangements

  • Fit-out expenses

  • Land ownership

  • Depreciation treatment

  • Staffing numbers

  • Eventual fiscal outcome

  • The plan for Council accommodation after the lease ends

  • The planning and construction timeline, including whether purchase options were considered

The public deserves answers. And as a candidate for Mayor in 2028, I am committed to bringing those answers into the light.

$90 million. No asset. Just rent.
That is not sustainability. That is not community. That is fiscal negligence.

Tauranga deserves better.



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