Tory Whanau has called revitalising Courtenay Place her top priority as mayor. A secret deal to reopen Reading Cinema could be the win she needs.

Wellington’s Reading Cinema complex has been sitting empty for four years, with fading paint and no signs of action in the heart of Courtenay Place, the city’s entertainment hub. Getting the retail and entertainment complex reopened would be a major win for Mayor Tory Whanau, who has repeatedly said her top priority as mayor is revitalising Courtenay Place and bringing back the sense of vibrancy that the city lost after the 2016 earthquake and Covid-19. 

It appears Whanau has struck a deal.

Earlier this month, Wellington City Council secretly voted on a “city activation project” in a public-excluded meeting. The details are still officially under wraps, but it’s an open secret now that the council is negotiating to buy out the land underneath the cinema complex – reportedly for $32 million – to help the building’s owner, Reading International, fund the earthquake repairs and upgrades it needs to reopen. 

Whanau has been tight-lipped, but she told Nick Mills on Newstalk ZB this week the cinema could be open “within a few years“. It’s a project that would have immediate and obvious flow-on effects. In combination with the Golden Mile (2.43km) upgrades, it would be visible evidence of progress in the centre city – the kind of thing that sticks with voters far more than new strategies and policy plans. 

Reading Cinema and its retail and entertainment complex, Courtenay Central, first opened in 2001. It closed temporarily after the Kaikōura earthquake in 2016, and briefly reopened in 2017 with a lick of paint and a spruced-up indoor food and entertainment space. It didn’t last long before it suddenly closed again in 2019 after an independent engineer’s report found seismic issues with the building. 

It wasn’t the most culturally esteemed institution to close in the wake of the earthquake. The Central Library, the Town Hall and St James Theatre all garnered more headlines and more sympathy. Courtenay Central was kitschy by comparison, with cheap movie tickets and tacky arcade games – but in terms of its impact on city life, it was possibly the closure that hurt the most. 

It was a rare spot on Courtenay Place that was an all-ages attraction. Families with young kids going to the new Pixar flick, students mingling after class, awkward tweens on first dates. It added vibrancy and diversity to a street that is now mostly pubs, nightclubs and strip clubs, and acted as a bridge between the nightlife end of Courtenay Place and the more daytime-friendly cafes and shops of Cuba St.

Since Courtenay Central closed, the 100m stretch of Courtenay Place it occupied went from one of the most appealing places on the strip to shop and spend time in to a boarded-up wasteland you try to walk past as quickly as possible. 

Who is Reading International? 

Reading Wellington Properties Limited, a subsidiary of Reading International, owns 1.5 hectares of central Wellington land across three plots – the Courtenay Central complex at 80 Courtenay Place, and two carparks at 200 Wakefield St and 24 Tory St, with a combined rating value of $55.5 million. 

A one point, Reading International was the largest company in the world. It began its history as Reading Railroads, which was featured on the original Monopoly board, and in 1870 it had a market cap of $170m – equivalent to about $4 trillion today. 

The company filed for bankruptcy in the 1970s, and Los Angeles-based lawyer James Cotter took over and used its assets to buy up movie cinemas across the United States, Australia, New Zealand and the United States. It now owns 62 cinemas with total worldwide real estate holdings of worldwide holdings of $540 million. Twelve of the locations and 70 screens are in New Zealand. 

James Cotter died in 2015, kicking off a Succession-style fight between his three children. His son James Jr was ousted as CEO in a “massive power grab” by his sisters, Ellen and Margaret, who are now the CEO and board chair respectively. Celebrity billionaire Mark Cuban is the largest outside investor, with a 12% stake. 

The company’s chief accounting officer, Stephen Lucas, is listed as living in Khandallah, Wellington, and is a director of Reading Wellington Properties Ltd. He did not respond to email inquiries for this story. 

What is Reading planning? 

Reading International has kept quiet in the media, but the company’s financial documents contain some key clues for its Wellington plans. 

The company’s 2019 report, soon after the complex closed, said it was “laser-focused on reinventing the Courtenay Central space” and revealed details about the redevelopment plan. It included a top-to-bottom renovation, converting all auditoriums to recliner seating, converting some cinemas to larger premium offerings to compete with Imax, an “elegant lobby lounge”, a new destination food hall, and additional tenant spaces. 

Since Covid-19 hit in 2020, however, the financial documents have been light on detail. No money was spent on development in 2020, and the report simply said management was working through feasible strategies. 

Investor reports continued to hype up the value of Wellington since the closure.“Wellington continues to be rated as one of the top cities in the world in which to live, and we continue to believe that the Courtenay Central site is located in one of the most vibrant and growing commercial and entertainment precinct areas of Wellington,” this year’s annual report said, emphasising its proximity to the new Tākina conference centre and the future Golden Mile upgrade. 

“We remain optimistic about the development potential for our Courtenay Central property,” the 2022 report said, noting the two car parking sites were some of the last large undeveloped sites in the city. That same year Reading secured council approval to use the Wakefield and Tory St sites for parking for the next 15 years, a clear sign the company has long-term plans in the city. 

The annual reports also revealed that a long-running legal dispute had delayed progress. Woolworths had signed a lease in 2013 to put a Countdown supermarket on the Wakefield St site, but seemingly backed out after the cinema’s seven-storey carpark had to be pulled down in 2017 due to earthquake risk. A Woolworths spokesperson said the lease was terminated by mutual agreement. “We are now able to proceed with our development and seismic strengthening obligations,” the Reading International investor report stated this year. 

Will Tory Whanau get her win? 

The big worry when the cinema closed down was that Reading International would cut its losses and walk away from Wellington for good. That doesn’t appear to be happening. If the company’s statements are to be believed, it is genuinely bullish on Wellington as an investment prospect. 

The bigger problem for Wellington would be if the company simply continued to landbank, using its two surface-level carparks to turn over enough revenue to pay council rates while adding nothing to the city around it. 

The deal between the council and Reading is reportedly a $32 million buyout of the land underneath the building, with a vote of 10 for and six against. Councillor Tony Randle, who was strongly opposed to the spending, tweeted immediately after the meeting that if the public knew the details they would be “incandescent”. 

It comes at a politically difficult time for Tory Whanau, after another cost blowout put the cost of repairing Wellington Town Hall as high as $330m, and with the Golden Mile upgrade about to start. Conservative councillors are predictably using the Reading Cinema purchase as another attack line about overspending.

From the information that has been made public, that line of attack doesn’t appear to be fair or accurate. This deal is not the same as council spending on roads or repairs. It isn’t an expenditure, it is an investment. The council already has significant land and stock holdings in its portfolio, and this deal would see it add a valuable piece of central city real estate – hopefully funded through the sale of other assets.  

A councillor The Spinoff spoke to said the deal was “cost-neutral”, and Whanau herself told Nick Mills on Newstalk ZB the deal “won’t impact your rates”. The Post’s Tom Hunt reported Reading International has the option of buying the land back from the council within a decade at the same price it sold it. The only real risk to the council in that scenario is that it might miss out on capital gains, but it would mitigate that by charging ground leases to Reading during that time.

Does the council need to get involved in this development? No, it would obviously be better if Reading International had funded this through a bank loan or managed to secure a deal with a private investor. The council can’t come to the rescue for every building that needs repairs. In the scheme of things, though, this is looking like a relatively cheap and sensible deal. 

More importantly, it’s a deal that will have huge benefits for the entire Courtenay Place precinct. Wellington needs its main entertainment street to thrive in order for the city to feel alive again, and getting Reading Cinema back could be the key that unlocks it all.