Will the golden goose deliver?

The leveling of Nelson Park, approved by 30% of eligible Hastings voters, is virtually completed.

That means any day now Australian property developer Charter Hall should be dropping a check in the mail for $11 million or so, completing its purchase of the real estate.

In turn, this cash will be allocated to building a new athletic track at Percival Road and acquiring $3 million worth of green space in Hastings’ central area.

Will the check arrive?

You might have heard that the world economy has suffered a body blow from the implosion of the housing and property development market. Property-exposed financial companies in NZ have been dropping like flies.

Since the day Charter Hall announced its purchase of the Nelson Park land (September 18, 2007), the company’s stock price has fallen 64%! It would seem that some belt-tightening is in order there. Indeed, last week, two Charter Hall directors announced substantial personal sales of CH stock to meet margin calls on their investments.

One wonders, even if trusting the company will honour its purchase agreement, will they be in any shape to energetically develop their new Hastings property?

If the check does arrive, maybe HDC could make a tidy profit by purchasing the land back, flipping back just a portion of its $11 million payment. After all, HDC might be looking for a new (?) track and grandstand location in a week or so, if commissioners deny its required plan change for Percival Road. And Charter Hall might need the cash back. A win/win!

Maybe offer Charter Hall $7 million, reserving the other $3 million for the promised CBD open space. And use the last million to offset three years of Kelt Capital fees, as they supervise the re-building of the track at its original location.

Speaking of Sam, maybe he’ll step into the breach if Carter Hall doesn’t come through.

But then maybe Kelt Capital’s feeling the financial pinch too. There’s no way of knowing. As a private company it need not publicly report its financials … even though Hastings ratepayers might deserve to know, since a lot of “public good” is riding on Kelt’s private acumen.

Perhaps we should just accept that Sam’s a shrewd businessman, smarter than the other financiers now jumping into lifeboats, and not worry about it. Unfortunately, one can’t even get an online peek at what business Kelt Capital might have in the pipeline these days … its website has been “under construction” for at least the last month. Very strange — one might even say, unprofessional — for a big league business in this day and age.

The Kelt sports park is being sold largely on the credibility of Sam. If the project goes forward, we ratepayers had better pray we backed Hawke’s Bay’s Warren Buffett. And that Kelt Capital manages construction better in the real world than in the virtual one!

Tom