Skyline to pay almost $10m for remediation after 2023 landslip
And, according to the company's annual report, obtained by Mountain Scene , another $3.7m is expected to be incurred in further financial years.
On September 22, 2023, during the highest 24-hour rainfall recorded in the resort for decades, rock and soil excavated as part of the redevelopment of the gondola's top station was dislodged.
The material plunged down through the Ben Lomond Reserve and into the Reavers Lane neighbourhood, while a second slip under the gondola cableway deposited forestry slash and mud on to Queenstown's historic cemetery and surrounds.
More than 100 people were evacuated from Reavers Lane and Brecon St, and a state of local emergency was in place for a day.
The slips forced Queenstown Primary School, Whakatipu Kindergarten and BestStart Queenstown daycare to temporarily close, and blocked access to the Queenstown Medical Centre.
Subsequently, Skyline, Naylor Love Central Otago Ltd and Wilson Contractors Ltd were prosecuted by Queenstown's council in relation to the Reavers Lane slip - last month, it was revealed the three companies admitted charges brought under the Resource Management Act of breaching their consents.
They were due to be sentenced in the Christchurch District Court in December.
According to Skyline's annual report, the company expects the maximum fine - $600,000 - for its charge to be reduced due to an adjusted starting point and discounts for good character and "an early guilty plea".
"It is likely that the Queenstown Lakes District Council will seek reparations for the cost of prosecution and for remedial steps taken.
"These costs have not yet been quantified and will be apportioned between Skyline and the other defendants."
The report says the slip costs remain as a contingent liability on the balance sheet, as any potential liability or regulatory infringement for either slip occurrence can not be reliably estimated, and it's not practical to do so.
"The company's insurer has confirmed partial coverage in respect of Skyline Enterprises' claims, with a decision on the remainder of the coverage pending.
"The extent of any ultimate recovery through insurance or other avenues cannot be reliably quantified at this time," the report says.
Skyline chair Peter Treacy said the company has so far done all the cleanup itself, but the question as to where costs would sit remains undetermined.
"We've got claims in with insurers at the moment, so I'm just not sure where that's going to end up.
"At the time we said how mortified we were it had happened, and we did everything we possibly could to clean up and get the thing fixed as fast as possible - it's our home town, obviously, and we were pretty distraught by the whole thing."
The report also revealed Skyline's negotiated a confidential commercial settlement with DFS Group following its "lease surrender".
Last month it was revealed DFS was pulling a pin on its high-end T Galleria store, occupying two floors of Skyline's redeveloped O'Connells building in Queenstown's CBD - its last day of trading is September 30.
Skyline's report says DFS' departure "significantly alters the risk profile of the property, given its scale and status as anchor tenant", and it is "highly unlikely" a replacement tenant, of similar scale, will be secured in the short term.
Summary market valuation advice indicates a potential reduction of between $16.5m and $19.5m in the fair value of the property.
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