Queens Wharf development a mystery

Maarten Holl/Dominion Post

DOUBLE BUNKING: Prime Minister John Key remains confident that New Zealand can still host the Rugby World Cup in 2011 despite suggestions of a looming accommodation crisis.

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Despite rushing an $84 million funding proposal into Auckland City Council's long-term plan to develop Queens Wharf, some councillors still have no idea what they are meant to be doing with it.

At a meeting to finalise the city's ten-year plan yesterday, councillors decided to add a provision for $84.3 million into the plan, which would include $18 million for repairs and $14.1 million for restoring the pier's two old storage sheds.

However, deputy mayor David Hay told BusinessDay this decision was rushed into the ten-year plan because rates, which need to be set in the next eight working days, could not legally be finalised without it. 

"Council officers had a week to prepare something and it would be irresponsible for us to not flag it in the ten year plan," said Hay.

He said there had been no prior communication from either the Government or the Auckland Regional Council (ARC) that the sale was going to proceed, and he wasn't even sure if the Auckland City Council (ACC) was expected to develop the wharf because it had not been asked to.

"I asked a specific question of our council officers, 'have we had any letter or written communication from either the ARC or the Government?' and the answer is no," said Hay.

"I have had no discussions as deputy mayor and leader of the majority group on council... with the Prime Minster or [Rugby World Cup Minister Murray] McCully, verbally, or in any way, and the council has not received anything written, so how we're supposed to know seems to be a bit of a mystery," he added.

Equally mysterious was why the ARC would spend $20 million to half fund the purchase of the wharf from its own subsidiary Ports of Auckland, and then expect another council to develop it.

"Queens Wharf has always been owned by the public, so why there's now $20 million being spent to take from under one umbrella and put into public ownership under another umbrella so that it can be opened up to the public, is a bit of a mystery," said Hay.

Meanwhile, rates reform campaigner David Thornton said Auckland City's decision to fund the Queens Wharf development from rates was unimaginative and unacceptable.

"Harbourside property is the most valuable in the country and the opportunity exists for a variety of commercial activities to operate on Queens Wharf in conjunction with a passenger terminal and an events centre," said Thornton.

Last week Prime Minister John Key announced Queens Wharf was to become "party central" for the 2011 Rugby World Cup, and put forward $20 million to buy half of the dilapidated pier from the Ports of Auckland, with the ARC buying the other half.

Ports of Auckland is wholly owned by Auckland Regional Holdings, the investment arm of the ARC.

However, now that $40 million of public money has been spent acquiring the wharf, both Key and McCully are silent on what should happen to it.

When announcing the purchase of the wharf, Key also said he wanted it to incorporate a cruise ship terminal, and for it to leave a "legacy of infrastructure that will enhance the visitor experience long after the cheers have faded and the scores are forgotten".

However when asked by BusinessDay what he believed "party central" would entail specifically, a spokesman for Key refused to comment saying it was a matter for McCully.

Asked the same question, McCully also refused to provide details on the "party central" idea, but said he would be travelling to Auckland for discussions in several weeks time.

Whatever the outcome of those discussions, McCully has suggested the Government is not keen to provide any further funding for developing the wharf.

"We felt that securing Queens Wharf area was a good contribution to make, but having made that contribution we now want to see the purposes that were set out by the Prime Minister last week achieved," said McCully after a meeting with Auckland City mayor John Banks and ARC chairman Mike Lee.

This would leave the funding for development of the wharf to local ratepayers, meaning the council would have to increase rates, flying in the face of the local government cost cutting campaign being undertaken by Local Government Minister Rodney Hide.

Hide has been highly critical of local governments' engaging in activities outside their "core business".  Hide has suggested previously that transport, water services and rubbish collection were core businesses, while investment in property development was not.

When asked by BusinessDay if constructing a cruise line terminal could be considered "core business" for the council, Hide backtracked on his earlier comments, saying what constituted core business was still being reviewed.

"We've got analysis on that underway now, so I'm not in a position to draw a line on any of that," he said.

"I'm not particularly wanting to circumscribe it, I'm just wanting to get the emphasis right so councils focus on their core [business] and don't go off building monuments all the time," he added.

Hide repeated his opposition to councils raising rates above the rate of inflation, but refused to comment specifically about the prospect of raising rates to pay for the Queens Wharf development, saying that was for the council to decide.

The Queens Wharf debate comes at a time when Auckland is preparing for the transition to a Super City, which was estimated to cost around $306 million over four years in direct transition costs by international consultancy Deloitte.  The same report said $132 million would be saved through efficiencies.

However, Employers and Manufacturer's Union chief executive Alasdair Thompson has noted that the savings would be unlikely to result in reduced rates due to the relatively small scale of savings compared to debts owed by the region.

The transition could also cause a $605 million drop in the region's annual gross domestic product through lost jobs and business, according to a report from University of Auckland economics lecturer Rhema Vaithianathan.

- © Fairfax NZ News