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Council plans to buy island jewel for $12.5 millio

MAYOR’S OFFICE
AUCKLAND CITY
MEDIA RELEASE
13 July 2005

Council plans to buy island jewel for $12.5 million

Mayor of Auckland City Dick Hubbard announced today council plans to secure land at Matiatia – often referred to as the “Gateway to Waiheke Island.”

The council plans to purchase all the shares of Waitemata Infrastructure Ltd (WIL) for $12.5 million to ensure that the land at Matiatia is developed in a unique and memorable way.

The purchase would be funded by short-term borrowing, pending an agreed sustainable funding package.

The council is entering into public consultation for the purchase of the company as a council controlled organisation. Submissions close on 15 August, 2005.

Mr Hubbard, who played an active role in negotiations with WIL’s shareholders, said Waiheke Island held a special place in most Aucklanders hearts and the land at Matiatia was a vital strategic asset for the island. It is the main arrival and departure point for passenger ferries from the city and the first glimpse of Waiheke Island for visitors from around New Zealand and the world.

He said that the purchase would ensure the people of Waiheke Island are involved in the how the gateway to the island is developed in the future.

“I am confident that with some creative and innovative thinking we can do something really special with this piece of land.”

The Mayor said he and the council were grateful for the support of WIL’s shareholders on working proactively to conclude the purchase.

Subject to consultation, the council would advise the Environment Court that it would pursue plan changes but not all the conditions requested by WIL under the current private plan change appeal. The court’s decision would set in place the planning rules for the land but leave actual design of the development to a further process such as a design competition under the council’s proposed property enterprise board, Development with Vision.

Once the Environment Court proceedings were completed the council would work with Community and People of Waiheke (CAPOW) and other parties to resolve any outstanding issues.

In the Environment Court hearing the council will be suggesting mixed-use development on the site. An interim decision by the Environment Court had allowed as a permitted activity 10,000m2 building development with additional development opportunity as a discretionary activity. WIL wanted to develop 18,500m2 after amending its original plans for 29,000m2.

Speaking on behalf of the vendors, Waitemata Infrastructure Ltd director Stephen Norrie said, “We recognise the strategic importance of this property to Auckland City and, in that spirit, have agreed to sell the company to the council. We believe the price fairly reflects the strategic importance of the property which is located directly adjacent to one of Auckland’s major transportation hubs.”

Waitemata Infrastructure Ltd was established in 2000 to acquire the Harbourmasters property from Japanese owners.

The Mayor said there was a price to be paid for saving such a key asset for a more environmentally suitable scale of development.

Funding arrangements are still being considered by the council but include the following to cover part of the cost:

- the sale of a Church Bay property, part of WIL’s land at Matiatia (Lot 51) which has no strategic value
- sale of a long-term lease for some or all of developable floor area on the Matiatia land
- full user pays car parking at Matiatia.

The council is also investigating other additional funding sources.

WIL’s plans for a $35 million township at Matiatia were opposed by over 1000 locals who said the bulk and scale of the proposed development was out of character with the area.

Hauraki Gulf Islands Councillor Faye Storer said the decision to obtain the assets of WIL was a fantastic step forward.

“Special thanks are due to the mayor. He has helped champion the cause in support of the people of Waiheke who also deserve praise for their foresight and tenacity. For them, it’s been a very long haul,” she said.

For people who want to make a submission on whether Auckland City should establish a council controlled organisation to acquire Waitemata Infrastructure Ltd (WIL), information is available from the council’s Waiheke service centre; from Level 11, Civic Administration Building, 1 Greys Avenue, Auckland; from Auckland City on (09) 379 2020; or at www.aucklandcity.govt.nz/matiatia


Ends

Statement of proposal to establish a CCO by acquiring the shares in Waitemata Infrastructure Limited

This statement of proposal invites submissions on whether Auckland City should acquire all of the shares in Waitemata Infrastructure Limited (WIL) and as a consequence establish this entity as a Council Controlled Organisation (CCO).

Description of the proposal
This proposal involves the acquisition of all of the shares in WIL, to enable the Council to obtain control over WIL’s assets. WIL’s assets comprise two lots of land on Waiheke Island adjacent to the Matiatia ferry terminal known as the “Harbourmaster site”. The details of this site are as follows:

Name Harbourmaster site

Address 10 Ocean View Road, Waiheke Island

Owner Waitemata Infrastructure Limited

Land Lot 8 DP 146325 and Lot 51 DP 1519304

Area 7.0988ha and 1.6068ha – total area 8.7056ha.

Title 129A/130

Description The property comprises prime land adjoining the foreshore at Matiatia Bay, being the gateway to Waiheke Island. The land is currently under-utilised, with some portions used for car-parking and others containing various existing older buildings. The land generally comprises three distinct areas:
1. the foreshore area which comprises approximately 3.64ha. This is the main development area.
2. an area of wetlands of approximately 3.46ha. This is to the south and east of this main development area.
3. land being Lot 51, which is a separate area from the main block and is undulating with steep to moderate contours.


If Auckland City were to purchase this site it involves the acquisition of all of the shares in WIL and this acquisition amounts to the establishment of this entity as a Council Controlled Organisation (CCO) in terms of section 56 of the Local Government Act 2002.

Reasons for the proposal and proposal objectives
The Harbourmaster site is owned by WIL. To acquire control over this site would involve Auckland City taking over the ownership of WIL by purchasing all of the shares of the company, and would therefore involve Auckland City establishing a CCO as an incidental part of that purchase.

The objective of the establishment of the CCO is therefore to enable Auckland City to acquire control over the Harbourmaster site as described above. Following acquisition Auckland City would then undertake its own assessment of the type and scale of development of the site in accordance with its Development with Vision policy. This policy was established as a mechanism to implement Auckland City’s vision of a quality urban city. The policy specifically contemplated projects in key strategic areas where it is perceived that private development will undermine or underdevelop the public good aspects of the area. The Development with Vision policy was the subject of public consultation and approved by council in May 2004. Copies of the Development with Vision Statement of Proposal are available upon request.

Costs and funding of the proposal and potential impact on the Council’s capacity
The establishment of a CCO is likely to involve administrative and set-up costs, but these are unlikely to be significant. The purchase of the land (through acquisition of the WIL shares) is in accordance with council’s Development with Vision policy. It is not anticipated that the establishment of a CCO would have any impact on council’s capacity to meet present and future needs in relation to any of its statutory responsibilities.

Analysis of the benefits and costs of this proposal to the community
The benefit of this proposal is that it will enable Auckland City to acquire control over the
Harbourmaster site and therefore to:
- have control over the scale and intensity of future development;
- ensure a high quality development; and
- manage the environmental issues such as wetland protection, and water discharge from the Owhanake treatment plant.

There is unlikely to be any material costs to the community of the proposal to establish the CCO.

Other options
The other options available to council are:
1. to purchase the assets directly from WIL; or
2. to wind up the company and to administer the company’s assets through an alternative governance arrangement not involving a CCO; or
3. to do nothing; ie to not purchase the shares in WIL which would therefore not require the establishment of a CCO.

The first option is not considered viable as the vendor has stated that they would not contemplate selling the assets of the company only. Furthermore, obligations contained in the Deed and Agreement would survive a direct asset purchase.

Logistically the second option could not be considered until after the purchase, so would still require the establishment of a CCO for at least an interim period.

The “do nothing” option would mean Auckland City would not be able to achieve its objective of acquiring the land and therefore would not have control over the nature and intensity of the development of the land and the impacts of this development.


ENDS

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