Developers urge contributions regime delay

23:42, May 16 2012

Hamilton is under pressure to delay its flagship development contributions regime.

The levies ensure developers contribute to growth-related infrastructure costs and a draft policy proposes allocating costs in the area they occur instead of across the city.

But two of the city's biggest developers are urging the city council to rethink plans to levy them for infrastructure that they are describing as "fundamentally flawed".

Tainui Group Holdings and Chedworth Park Ltd, the major players in the proposed $3billion inland port and commercial hub at Ruakura, yesterday told the council it was leaving itself open to legal challenge unless it renotified its draft contributions policy.

"The significance of this issue means that should council decline to do this, and fails to implement a development contributions policy that is transparent, targeted and in accordance with [the law], TGH will have no option other than to pursue the remedies available to it at law," said a submission one city councillor labelled "threatening".

City performance general manager Blair Bowcott said the proposed catchment-based charging model would replace a policy where levies were paid equally across the city.


"This is just part of our hearing process and we'll go away and consider how we respond. If we feel there are issues we need to take more time on, we can do that.

"We are listening to these guys, we are working with them. We do a lot of work to hear their issues, and work it into policy. It's a complicated area," Mr Bowcott said.

Chedworth has developed more than 4000 residential sections in the city while Tainui Group Holdings has become one of the region's most influential corporate players.

The development of the inland port and logistics hub will be TGH's biggest project since the Base and Te Awa and opening the Novotel Auckland Airport Hotel.

Between them the two companies control nearly three-quarters of the land holdings between the city's eastern edge and the proposed Waikato Expressway alignment.

City infrastructure manager Chris Allen said the levies – split between citywide and catchment-specific costs – were a balance between what ratepayers and developers should fairly contribute: "If developers don't pay, the ratepayers pay," he said.

TGH counsel Andrew Beatson told councillors the companies were self-funding all of the infrastructure for the project, yet the council still wanted $88million over 20 years.

He argued that under the policy some work the council regarded as having citywide benefits meant the companies would have to contribute to catchment-specific projects such as the far eastern interceptor.

The interceptor did not benefit its plans at Ruakura, he said.

The two big players were not alone in their criticism.

Developers owning more than 120 hectares in the Rotokauri area also slating the impact of the draft levies.

Porter properties and Hamilton JV Investments said they faced a "massive" 86 per cent increase in development levies under the draft compared with the current policy.

Spokesman Mike McLennan said the development contributions for its plans for industrial development at Rotokauri would jump from $18m to more than $40m.

Waikato Times