by Selwyn Manning

Legal action looms over Auckland City Council after it rejected demands from Britomart developer Jihong Lu for $15million for costs incurred due to delays.

At a meeting last night, Auckland City councillors voted 9-8 to reject Mr Lu’s demands for the money.

The Council went in committee for seven hours to discuss the payment. It was the third time the developers had demanded that the money be paid, and the third time it had been rejected.

Renewed negotiations are about to begin this morning between the City Council’s Peter Menzies, Mr Lu, financier Salmon Smith Braney, and building contractor representatives.

However, unless Auckland City performs a definite U-Turn on the matter, it will face High Court action.

Political pressure to minimise costs associated with the Britomart development has been intense within Auckland City Council. Many councillors were elected on an anti-Britomart ticket. However, on entering office these councillors were whipped into line after learning Auckland City would face paying millions of dollars to back out of the deal.

Mayor Christine Fletcher says Auckland City still favours the revised Britomart scheme and would continue negotiations with developers and financiers.

But the vote last night is a clear signal that Auckland City no longer is a willing funder on what politically could become a white elephant.

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