How US TV star won approval to buy a South Island sheep station

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There was widespread criticism last month of the Government’s decision to allow Amercian TV personality, Matt Lauer, to buy the lease of the  10,000 hectares, Hunter Valley station which borders Lake Hawea.

A review of over 200 papers provided to the Overseas Investment Office by both the Department of Conservation and the Walkways Access Commission and various local hunting fishing and tramping groups obtained under the Official Information Act indicates that the sale was approved on the basis of fairly flimsy evidence.

Indeed the OIO found that Lauer’s ownership of the station would not add jobs or increase exports.

These papers raise questions about what the role of the Government's statutory advisors really is in the OIO process.

Matt and Annette Lauer

Matt and Annette Lauer

That’s because the OIO ignored advice from both Walkways Access Commission and DOC which said the sale should not go ahead without Lauer providing public access to a road which runs across the property and which in turn provides access to the Lake Hawea Conservation Area, a 100,000-hectare DoC wilderness area at the head of the lake.

That area includes the Hunter River which is considered to provide renowned trout and salmon fishing but which can currently only be accessed by air, jetboat or a ten-hour tramp down the opposite lake shore to Lauer’s station.

Those who supported the access saw the OIO approval process as a once-in-a-lifetime opportunity to impose conditions on the sale.

In its submission to the OIO, the Walking Access Commission's Operations manager, Rick Cullinane said that an easement over the road to allow public access “is essential” if the OIO wished to have the sale meet the test which required that the benefit from the sale be "substantial and identifiable".

Ironically, as Lauer's lawyer, Graeme Todd, pointed out, if the sale had been to a New Zealander there would have been no opportunity for the public to have any say at all. Indeed a new New Zealand purchaser could have completely closed the station to the public, and there would be no recourse.

But the sale itself is complex.

The land itself is not being sold. It is crown land held in a pastoral lease by Taf and Pene Cochrane who have been farming the property for 40 years.

They want to retire and five years ago put the property on the market. The OIO concluded that they were struggling financially.

Until Lauer turned up, they had received no bids.

The Cochranes had won few friends over the years among the trampers, hunters and fishers, who wanted to use the road through the station to access the Hunter River and the Lake Hawea Conservation Area.

The 40km road was partly on their leasehold land, and they certainly maintained it at their own expense.

Though they produced a sheaf of statements from people saying they had been given access to the road, there were strong complaints from the local groups at a meeting after the Cochranes had left the room, according to DoC’s Central Otago Operations Manager, Mike Tubbs.

One source, familiar with the Cochranes described them as “difficult buggers”.

Murray Burns, the secretary of the Upper Clutha branch of the NZ Deerstalkers’ Association, said that there was a need to bring “this long winded debate” about access to a conclusion.

Lauer did offer some concessions including a $1.2 million farm investment programmes; the ending of a dispute about another section of road which he simply offered to gift to the Queenstown Lakes District Council and easements over a number of tramping tracks running up the property.

He has also confirmed he wants to build a $3 million house on the property.

But he was totally opposed to opening up the road.

Or maybe it was more a case of the Cochranes being totally opposed to opening up the road.

That was because in many ways they were going to remain the effective proprietors of the station even after the lease was sold.

Lauer is going to sub lease to them his own lease on the crown land.

And that is where Land Information Minister Mark Mitchell sees a window opening that might yet see an easement placed on the road to allow public access.

The Commissioner of Crown Lands has the power to impose conditions on the lease.

On April 6 the Commissioner issued a press statement saying consent had been granted for Lauer to buy the lease but it added: “The Commissioner will make decisions on any formal applications for public access.”

Mitchell told POLITIK he had met with some of the submitters calling for the opening up of the road and told them to go through the Commissioner.

Even so, reading the documents there is still an impression that this was a sale that proceeded on fairly flimsy justifications.

The Overseas Investment Office’s report says that Lauer purchased the lease in order to provide accommodation and facilities for his family and guests.

“The Lauers expect to be in residence for a number of stays in each year and to spend longer periods in New Zealand and on the land in future years.”
The OIO said he was also proposing to enhance and develop the land and to provide for production off it to be substantially increased.

However, the OIO offers an intriguing counterfactual analysis of the sale which concluded that if the sale to Lauer did not go ahead, the lease would be likely to be sold to an alternative New Zealand purchaser because the vendor would be forced to lower the price.

One of the reasons for that would be that “substantial debt obligations require repayment” and the level of debt meant that the Cochranes would find it difficult to maintain the station to the standard required under their pastoral lease.

In other words, the Cochranes, were struggling financially.

But if the sale to Lauer were to go ahead the OIO was required under its Act to satisfy a number of tests:

Did the purchasers have business experience and acumen relevant to their investment?

The answer was: “Matt Lauer is graduate of Ohio University and has been co-anchor of NBC News’ “Today” show since 1997. Annette Lauer (his wife) was a top level model and currently serves as a Goodwill Ambassador for Unicef.”

(Lauer’s degree is in media and communicaitons)

The property is to be managed by the Cochranes' son.

On the basis of that information, the OIO was satisfied that the purchaser satisfied the business experience qualification.

Has the purchaser demonstrated financial commitment to the investment?

Lauer paid a deposit, but the actual amount is redacted. Otherwise he spent “approximately $100,000” om professional advice and doing due diligence.

That got a tick from the OIO.

Is the purchaser of good character?

“The OIO conducted “open source background checks on the individuals … and found nothing relevant to the criterion.”

In other words, a Google search.

Another tick.

Will the investment benefit New Zealand?

The OIO doesn’t offer any evidence but just simply ticks the box.

Will the benefit be or be likely to be substantial and identifiable.?

The Walkways Commission and DoC had agreed that for this criterion to be met access would need to be provided over the road.

The OIO does not mention it in their report at all.

Instead, the OIO says Lauer's other concessions were sufficient.

There are questions about whether the investment would create jobs and whether it would increase exports --- the OIO decided the sale met neither criteria.

So, in the end, it was approved on the basis that Lauer would invest $1.2 million over five years, vest part of a road in the Queenstown and Lakes District Council and support legalising access to DoC tracks already on the land.

He also undertook to transition the property to a breeding farm and to increase stock numbers and per animal stock performance.

It seems the over-riding factor may not have been Lauer's qualifications or even the money he was bringing in - but the need for the Cochranes to sort their financial circumstances out and to sell the lease so they could retire.

There simply weren't any other buyers.

 

 

 

 

 

 

 

 

 

 

 

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