Waiata House. PHOTO/FILE
Grants from the Masterton Trust Lands Trust are down, and have stopped to small community groups, while it fixes near-new buildings and tries to claw back the cost in the courts.
In 2016, 11 commercial buildings built for the trust failed seismic design standards.
Work is under way to correct the issues, and legal action is continuing in an effort to recover costs.
The trust has been operating since 1872, and leases about 80 properties, with income from rents returned to the community.
But while its annual report for the year to March 31, 2018, released on Tuesday, shows an operating surplus up 176 per cent to $1.5 million, notes to the accounts tell the story of the buildings’ remediation and updates on court action.
Chairwoman Leanne Southey notes the impact on grants, which amounted to $678,209, down 23.81 per cent due to the financial implications of the building remediation.
The board opted to continue supporting education and the arts, because that is what is specified in its Act of Parliament, she said.
It made educational grants of $292,000 and supported the arts by not charging Aratoi rent that would otherwise have amounted to $324,000. There are also concessionary rents to Harlequin Theatre, Young Citizens Club and Te Kura a Rangi Trust.
But while it made a civic grant to Masterton District Library, there is no long list of small grants to community groups, as in the past.
“Limited funds meant that we were unable to offer the usual community grants programme,” Southey said.
“We just had to make the call and the trustees did not want to cut education.”
She said the trust was “stopping now in order to be able to give more back later”. It could not say when a full range of grants to smaller community groups would resume.
The trust said legal proceedings were under way covering six buildings.
The amounts involved were so large that they would be heard in the High Court. Hearing dates were not expected until mid-2019.
Three buildings were judged to be outside the legal time frame and the question of litigation on them was still being assessed.
The trust has fixed 52 Dixon St, and work on Waiata House was a big focus of the year.
The annual report states that the remediation on that building was more extensive than originally thought and the final cost was not known.
It has been sold to Masterton District Council to house council staff, but the trust is in charge of the work.
Trust general manager Andrew Croskery said the repairs would not cost more than the $4m the building was sold for.
“We are hoping to be finished at Waiata about November 30, or thereabouts,” he said.
Remediation of buildings involved columns and steel frames being put into buildings.
“The buildings weren’t built to code, so it generally means more structure.”
Over the year, the value of the trust’s portfolio increased marginally to $71m.
The trust is still making new investments, having redeveloped two previously-vacant properties, transforming them for new tenants Whaiora and ConArt.