The Property Council is warning of developers quitting Hamilton as the 10-year plan draws a mixed reaction from business.
The Waikato branch of the council has written to Hamilton City Council chief executive Richard Briggs, describing the change to the development contributions regime as disappointing “and in our view bad for the city”.
It says it believes there is a strong risk that the new policy, signed off at the end of June, will slow development in Hamilton, with fewer houses being built, less affordable housing and a less competitive city.
Branch president Brian Squair says the council’s members are happy to pay their fair share of development contributions. “We do not see potential increases of up to 144 percent as fair.”
He warns that such increases are unsustainable and likely to see developers leave Hamilton for Waipa, Cambridge, and other cities.
“Property Council surveyed our members on the policy and the results were telling. Eighty-three percent of respondents foresee Hamilton as an unattractive option for development, with zero percent of developers saying they would continue business as usual.
“This shows a clear uncertainty on how the policy will affect the development community.”
Brian is concerned at what he sees as a lack of transparency around the new model.
“We don’t know the rationale, and because it’s not transparent it gives rise to a little bit of scepticism out there in the marketplace.
“We get that things change, but there’s no trail for us to view.”
He says one comparison of a subdivision in Hamilton and in Tauranga, under the new plans, would see DCs costing 10 times more in Hamilton.
“Why should a pipe in the ground cost 10 times more on this side of the Kaimais than it costs on the other side of the Kaimais for a similar development?”
He wants to engage with the city council over his organisation’s concerns, and was due to meet with key staff ahead of the plan’s sign-off.
Meanwhile, Hamilton Central Business Association general manager Vanessa Williams is happy with compromises which have seen the CBD developer contribution remission phased out over three years and, similarly, a three-year phase-in for the shift to capital value for rates.
Her organisation submitted against the immediate removal of the remission and switch to capital rates, two measures which she says would have had significant impact on her membership if they had been implemented from day one.
She says there is about a 50-50 split of CBD businesses between those that benefit from a move to capital value and those that don’t.
“The biggest thing was around those that weren’t having the time to be able to plan and incorporate what it would mean to go to a capital value. Having a three-year lead time at least allows that.”
Vanessa says the DC remission has encouraged investment in the city centre. “We were hoping to keep it for another five years. However, three years is a reasonable compromise.”
Vanessa is also pleased about a new activation fund for the city, with HCBA getting $100,000 a year for three years, largely to leverage around events in the region including sporting events in Hamilton. The activations will happen in Civic Square, Garden Place, Victoria on the River and Embassy Park.
“We had supported the Garden Place upgrade because the membership was in support of it; however, this is a good alternative,” Vanessa says.
Waikato Innovation Park chief executive Stuart Gordon also sees positives in the 10 year plan.
“I’m very pleased they’re investing in growth and separating growth from business as usual, so a big tick around that.”
But he is unhappy with the phase-in of capital rating after his submission had strongly opposed the shortening of the transition period.
“Three years does soften it, but the original plan should stay in place. I felt the council had effectively made a promise to the business community, who like certainty,” he says.
“There’s no extra information provided as to why it should not continue on its present stream.”
He also questions whether the balance sheet over the next 10 years has kept capacity for further economic development infrastructure, citing the need for an East Ruakura spine road as the expressway further increases traffic on the already busy Ruakura Rd.
Agenda Waikato chair Graeme Dwyer says of the 9.7 percent rates rise: “If it has to be that much, it has to be that much, but let’s make sure we don’t come in another three years’ time and say, oops we got it wrong and we need some more.”
He questions whether there’s enough focus on reducing costs, and wants to see sharing of services with neighbouring councils to gain efficiencies.
“As a property owner, doing stuff is getting harder and harder,” he says. “I know [Mayor] Andrew [King] was keen to see some more efficiency driven in that area but it doesn’t seem apparent yet.”