Suburban office construction ban could have opposite effect

LIZ MCDONALD
Last updated 16:04 30/03/2014

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Some say it's a case of shutting the stable door after the horse has bolted. Others say a carrot, not a stick, is the best approach to draw businesses back to central Christchurch.

Equine metaphors aside, a Christchurch City Council scheme to clamp down on suburban office development and strengthen the central city has triggered vigorous feedback.

The plan, part of the council's District Plan draft review now up for discussion, would tighten rules in light industrial zones. With the exception of a few office parks, it would mean no more new office buildings, shops and hospitality outlets in locations such as Blenheim and Lincoln roads, Moorhouse Ave and around the airport.

Property and business lawyer Simon Mortlock, a partner at Mortlock McCormack, believes the plan is "on the right track".

"How else will we get back the central city? It's critical the suburbs don't expand any further, or we can say goodbye to a central city."

Although suburban growth has been great for developers and investors "it's not good for the central city", Mortlock says.

His firm has already put its money where its mouth is, leasing space in The Terrace precinct being built in town. He is optimistic others will follow.

"The inner city will still be popular, it will be a vibrant place. The turnaround will eventually come, even if it takes five or 10 years."

While a press.co.nz reader this week complained the council plan would "drag businesses kicking and screaming back to the CBD", there is in fact plenty of suburban space for those keen to stay, and probably more in the pipeline.

One suburban developer predicts a rush of projects as fellow developers try to beat possible changes, and says the council will soon be "awash with consent applications".

The developer, who did not want to be named to protect a consent bid just lodged, says developers missing out faced land devaluation. "You'd be pretty grumpy if they changed the rules on you."

The draft plan still faces the lengthy hurdles of council meetings, public submissions, hearing commissioners, and ministerial approval before anything becomes law. But even if watered down, it could go a lot further than the normal council tweaking.

Independent planning consultant Dean Chrystal, of Planz Consultants, describes the plan as "very significant".

Clients have been calling about the changes, and he says the combination of uncertain timeframes and development timetables could make things tricky.

"It could be very tight. Everyone is waiting with bated breath".

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Chrystal points out that unlike the usual reasons for zoning changes, this latest scheme has not followed "grumbling" in the zones where it applies. The grumbling has been in the city.

While central city landowners may have land values boosted by such a rule change, many say the move comes too late. A case of locking the stable door after the horse has bolted.

Among those unhappy are the City Owners Rebuild Entity (Core).

Core spokesman and developer Ernest Duval says their 2011 warnings of suburban flight were ignored by authorities and now the stick approach - attempting to ban suburban development - is not enough.

He bemoans lost opportunities and that "we are only now having this discussion about limiting development outside the CBD over three years after the earthquakes."

Developers have "voted with their feet" and this has created a "polycentric city", he says.

Core wants incentives to boost the central city's appeal - the carrot approach. They want more details and certainty over the anchor projects, a clear parking plan to compete with the suburbs, and incentives to drive development.

The group's views are echoed by Jonathan Lyttle, general manager at real estate firm Colliers. The market implications of a clampdown at this late stage must be carefully studied, he warns.

"All it does now is incentivise people to build - if you've got land in the suburbs, do it now."

He acknowledges that any zoning changes could level the playing field, focussing attention back on the central city.

This should be followed by discounting council rates and development levies, he says, and offering seed funding through local or central government loans.

But ultimately the markets will out, even in the face of rules and regulations, Lyttle says. He warns developers to build only where there is strong demand, or face empty buildings while tenants settle elsewhere. In other words, you can lead a horse to water, but you cannot make it drink.

- The Press

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