After pouring more than $11 million into a Rotorua motel complex for the homeless, Kāinga Ora has decided to tear it down and put the Fenton St site on the market. 

While the purchase and subsequent renovating of the former Boulevard Motel has been described as an “appalling waste of taxpayer money”, the sale has created fresh hope a new development will be a positive for the city and accommodation strip once known as Rotorua’s Golden Mile. 

Kāinga Ora has confirmed it is selling its transitional housing site, renamed 2six5 on Fenton, after buying it in July 2021 for $8.1m. 

The sale raised eyebrows at the time, with a local real estate agent saying the motel’s six property titles were then collectively valued at $4.3m. 

Kāinga Ora spent a further $3m on renovations converting it into 30 transitional housing units able to cater for 70 people. 

The site was also controversially granted a resource consent for this use without being publicly notified. 

Resident lobby group Restore Rotorua used it as a catalyst to spark a legal fight with the Ministry of Housing and Urban Development and Rotorua Lakes Council, pushing for public consultation on future similar applications. 

Late last year, the 16 households living in 2six5 on Fenton were moved out after its geothermal bore, which provided heating and hot water, broke. 

Kāinga Ora said at the time the bore was at the end of its operational life, and the agency was considering options for the site. 

Why Kāinga Ora is selling 

Kāinga Ora director of supported housing Lucy Ashby this week said the broken bore and other age‑related issues across the buildings and site meant remediation would require significant investment. 

Ashby said work would start soon to prepare the property for sale, which included demolishing the buildings to ensure the site was safe and secure. 

The former Boulevard Motel on Fenton St. Photo / Andrew Warner 

“This will make the site more appealing for potential buyers.” 

She said proceeds from the sale would be reinvested into new social housing. 

Ashby said the property was bought in 2021 as part of an “urgent Government response to meet an unprecedented spike in emergency housing need in Rotorua”. 

Since 2022, 174 households have stayed at 2six5 on Fenton. 

The former Boulevard Motel on Fenton St. Photo / Andrew Warner 

She said many had moved into some of the 395 new Kāinga Ora homes delivered in Rotorua since July 2023. 

“We will continue to keep local stakeholders, including the [Rotorua Lakes] Council, updated.” 

She said Wera Aotearoa Charitable Trust, the organisation contracted by the Government to manage the site and provide wrap-around support, helped residents move into alternative housing. 

The geothermal bore would be capped this month in line with WorkSafe requirements, Ashby said. 

‘Waste of taxpayer money’ 

Rotorua MP Todd McClay said the previous Government should never have bought the motel for permanent emergency housing as it was not needed and quickly became a liability. 

He said the previous Government overspent, considering the the $11.1m price tag against the 174 households who lived there. 

“They paid too much for it, and it now runs at a cost of $63k per family helped. They should be embarrassed at this appalling waste of taxpayer money.” 

Restore Rotorua chairman Trevor Newbrook outside the former Boulevard Motel in 2021 after the controversial sale. Photo / Andrew Warner 

He said Fenton St had been “reclaimed” with the final homeless motels having closed. 

“I’m glad this site will now be put to better use.” 

Restore Rotorua chairman Trevor Newbrook said the former Boulevard Motel’s history was, in his view, “typical of how government departments operated under the last Labour Government”. 

“It is very easy to spend other people’s money.” 

In addition to the $11.1m spent to buy and renovate the motel, he said there would now be legal and resource consent costs, costs to demolish the motel and prepare the site for building, real estate agent fees and internal staff costs. 

Newbrook said an “unprecedented” spike in emergency housing need in Rotorua was in his opinion created by the Government at the time allowing people to relocate to Rotorua from other places. 

“Chris Hipkins is on record saying they received bad advice about emergency housing in Rotorua – and we keep on paying for it.” 

Labour housing spokesman Kieran McAnulty. Photo / File 

In response to the criticisms, Labour housing spokesman Kieran McAnulty asked where those who were living at the site had gone. 

“We know they haven’t built or acquired enough houses for these people, nor have they spent adequate money on maintaining the portfolio they have left – we’ll see more tales of rundown housing managed by Kāinga Ora because [Housing Minister] Chris Bishop hasn’t funded housing properly.” 

Hope for the future 

Regarding the upcoming sale of the Fenton St site, Rotorua Chamber of Commerce chief executive Melanie Short said the chamber welcomed any opportunity to attract new investment and development into Rotorua. 

“Not only does this help build confidence in Rotorua as a strong place to invest, but it also creates jobs and opens up opportunities for local suppliers and contractors to get involved. 

“Overall, it’s a positive step for the city.” 

Kelly Makiha is a senior journalist who has reported for the Rotorua Daily Post for more than 25 years, covering mainly police, court, human interest and social issues.