Mayor Mahé Drysdale says it’s time to draw a line in the sand and focus on how the Tauranga community can benefit from future development plans for the city’s Marine Precinct site.
The sale of the Marine Precinct was settled on 30 April 2025, after an application for an injunction to prevent the sale was dismissed by the High Court on 11 April 2025.
The new owners intend to develop the area into a purpose-built marine sector servicing facility, bringing with it the vision of significant employment opportunities and economic benefits for the wider community.
Mahé says that since learning about the impending sale when he became Mayor in August last year, his primary focus has been, and still is, on ensuring the sale achieves the best possible outcomes for the people of Tauranga.
“I’ve spent the last nine months learning more about this sale and listening to the views of various stakeholder groups,” says Mahé.
"During these discussions, I have been critical of the commercial terms of the deal and made it clear I would not have supported it as it was negotiated.
“That said, we have inherited this deal and while I may not like it, as Elected Members we have to accept past decisions and fulfil the terms of any contracts and legal obligations the Council entered into.
“While the sale has been controversial for some, the reality is that the Marine Precinct never achieved its full potential and Tauranga ratepayers have been funding ongoing operating losses of around $1.5 million a year.”
Mahé notes that the High Court recently determined that the merits of the application for a judicial review of the sale were ‘weak’.
“Furthermore, cancellation of the sale on the basis of an interim injunction, which was subsequently quashed by the High Court, could have exposed the Council and ratepayers to further, costly litigation.
Mahé says that now the Court has ruled, and the transaction has been settled, his focus is on making the most of the opportunity.
“While it’s been a tough road to get here, it’s time to accept the situation and embrace the vision of the developer, because their success will deliver the best outcomes for Tauranga.”
Mahé says the current Council has engaged with all parties involved and potentially affected by the sale, and will continue to do so, while also ensuring that the wider interests of the community are protected.
Although the sale of the Marine Precinct was settled on 30 April 2025, on 2 May 2025, Pacific 7 confirmed it will continue with its Court proceedings, which includes an amended application for a stay and an application for a leave to appeal.
Pacific 7 also indicated it will continue with its substantive application for judicial review (as set out in the amended statement of claim dated 20 December 2024).
In an Extraordinary Council meeting held on Friday, 9 May 2025, the majority of council members voted to oppose Pacific 7’s amended application for stay, application for leave to appeal, and any future applications by P7 related to these legal proceedings. At the same meeting, the Council also moved to put Pacific 7 on notice that the Council reserves the right to make a claim for legal costs incurred from the date of the High Court’s judgement of 11 April 2025.
Speaking of today’s decision, Mahé says: “It is not financially prudent to waste any more ratepayer money on an argument that the High Court describes as “weak” and has already been dismissed on three separate occasions.
“With the Precinct sale now settled, it’s time to move on and do what we can to ensure it delivers the best possible outcome for the marine industry and wider community.”
Background information
The deal struck between Tauranga City Council, negotiated during the Commission’s tenure, and the developer as part of the Marine Precinct sale was considered a ‘strategic’ disposal, in that the negotiated conditions meant the developer could only use the land to develop a marine industry servicing facility.
These conditions were in-line with the strategic objectives set out when the Marine Precinct was first established in 2015 – which was to help grow the region’s commercial marine sector and create significant economic benefits for the community.
The sale price was informed by two independent property valuations. The mid-point of these valuations was approximately $23 million. Following commercial negotiations, both parties agreed to a total sale price of $13,987,000 for the land and Vessel Works business (please refer to the Council report from the 23 October Council meeting for further details).
One of the terms of the agreement negotiated during the Commission’s tenure was for the Council to contribute up to a maximum of $29.2 million to build/renew wharf structures bordering the precinct. However, it should be noted that on completion of the renewed wharf structure, ownership will automatically vest back to the Council at zero cost.
The developer and Council also agreed at the time to enter into a Management Agreement for the management and operation of the new wharf structure, with Council receiving 60% of the net income it generates, after management fees are deducted.
When the new Council was briefed on the deal, Elected Members expressed some surprise and disappointment at what was seen as a one-sided deal, although it was also acknowledged that the asset hadn’t realised its potential and was a drain on ratepayers in its current form.
The sale was due to settle on 22 November 2024, but late on the day before, Tauranga City Council was served with judicial review proceedings relating to the Marine Precinct transaction. Injunction proceedings were filed at the same time.
The High Court granted an interim injunction late on 21 November 2024, which prevented the sale from being completed.
The developer joined the interim injunction proceedings in December and filed to have the Injunction dismissed and Judicial review struck out.
There has been some discussion about clause 24.1(b) of the Business sale agreement, which relates to cancellation of the contract. Council took advice on this clause and the advice was very clear that the Interim injunction was ‘skinny’ and couldn’t be relied upon to invoke that clause without significant risk of breach of contract litigation.
The current Council did not make any decisions related to the terms of the deal and whether they were in support of those terms or not. Rather, the current Council has only made decisions related to contractual obligations and legal advice during litigation, while considering what they believed would deliver the best outcomes for the city.
The High Court’s subsequent decision quashing the interim injunction confirmed the accuracy of the advice that the current Council received. This is further explained in the attached note titled “Overview of the Council’s decision not to cancel the transaction”.
Timeline of related events:
- May 2024 – Marine Precinct deal is signed, and the sale contract goes unconditional.
- July 2024 – New Council is Elected.
- August 2024 – New Council is briefed on the deal.
- 21 November 2024 – Pacific 7 applies to the High Court for judicial review of Council’s decision to sell the Marine Precinct. At the same time, Pacific 7 applies for, and is granted by the Court, an Interim Injunction pausing the sale.
- 22 November 2024 – Deal is due to settle.
- December 2024 – Court orders that the Developer/Purchaser be joined to the proceedings. Developer/Purchaser applies to have the interim injunction dismissed and Judicial review struck out.
- 19 December 2024 – Council and the Developer/Purchaser agree that if the Court lifts the injunction and/or strikes out the judicial review application, settlement will occur 10 working days after the High Court releases its written judgement.
- February 2025 – High court hearing
- 11 April 2025 – High Court quashes interim Injunction, leaving no impediment to settlement.
- 11 April 2025 – Pacific 7 files first application for a stay (pause) of the High Court’s Judgment dated 11 April 2025.
- 15 April 2025 – High Court dismisses Pacific 7’s first application for a stay.
- 22 April 2025 – Pacific 7 files application for leave (permission) to appeal to the Court of Appeal.
- 24 April 2025 – Pacific 7 files a second stay application.
- 30 April 2025 – Deal is settled.
- 30 April 2025 – Pacific 7 files third application for stay.
- 30 April 2025 – High Court dismisses third application by Pacific 7 for a stay.
- 2 May 2025 – Notwithstanding the deal being settled, Pacific 7 confirms to the Court it intends to continue with its second application for a stay, application for leave to appeal and its substantive application for judicial review. The Court implements a timetable to rule on Pacific 7’s second application for stay and application for leave to appeal. There are currently no Court orders to progress Pacific 7’s application for judicial review.
- 6 May 2025 – Pacific 7 files an amended stay application (which amends the terms of Pacific 7’s second stay application) and submissions in support of its amended stay application and application for leave to appeal.
- 13 May 2025 – Council to file notices of opposition to Pacific 7’s amended stay application and application for leave to appeal, together with submissions in support of Council’s oppositions.
Note: A more detailed chronology of the relevant steps in the Court proceeding is set out in the document below titled “A Summary of Court Proceedings.”
Further information
In the interest of transparency and to ensure the community is fully informed, a raft of information related to recent court proceedings and the Marine Precinct sale is now available on the Council website.
This information includes: