Draft Contributions Policy 2019 Written feedback

Transcription

1 Date: Monday, 26 November 2018 Draft Contributions Policy 2019 Written feedback Universal Homes University of Auckland The Warehouse Group Woolworths New Zealand Limited

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22 I615 Westgate Precinct I Precinct plans I Westgate Precinct plan 1 PC 4 (See modifications) Auckland Unitary Plan Operative in part 20

23 I615 Westgate Precinct I Westgate Precinct plan 2 - conceptual road network Auckland Unitary Plan Operative in part 21

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25 I610 Redhills Precinct I Redhills Precinct: Precinct plan 1 [ENV-2016-AKL : Bunnings Limited] Advice note: the planning maps (GIS Viewer) should be relied on for the extent of all designations, overlays and controls applying to land within Redhills precinct. Auckland Unitary Plan Operative in part 24

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27 SUBMISSION ON AUCKLAND COUNCIL'S PROPOSED DEVELOPMENT CONTRIBUTIONS POLICY INTRODUCTION 1.1 This submission is in relation to Auckland Council's ("Council") proposed Development Contributions Policy 2019 ("Proposed 2019 Policy") on behalf of the University of Auckland ("University"). The University is one of the largest tertiary providers in New Zealand. The University also provides dedicated student accommodation for some of its students, including in central Auckland in close proximity to their campuses. 1.2 The University has consistently provided feedback on the Council Development Contribution Policies. Earlier this year, the University provided submissions as a student accommodation provider on the proposed 2018 Policy, which was also proposed to replace the current Development Contributions Policy 2015 ("2015 Policy"). 1.3 The purpose of this submission is to provide comment on the Proposed 2019 Policy, as it relates to the HUE rate for "Student Accommodation". In particular, the University: (a) (b) (c) wishes to reiterate the key findings of expert analysis of demand placed on Council infrastructure by Student Accommodation; supports the specific provision for student accommodation within the Proposed 2019 Policy; and proposes a minor amendment to the definition of student accommodation in the Proposed 2019 Policy. 2. NATURE OF FEEDBACK Expert evidence in support of student accommodation 2.1 As noted above, the University has been in ongoing discussions with the Council regarding concerns over the previously inappropriate treatment of student accommodation as "accommodation units" under the 2015 Policy. Through those discussions, the University commissioned two expert reports ("Expert reports") to assess the appropriate HUE rates for transport and open spaces and reserves for student accommodation. 2.2 These provided an objective and evidence based assessment of the correlation between student accommodation and the demand it places on activities such as reserves and transport. The Expert reports included a traffic report by Flow Transportation Specialists and a reserves and public open space report by Visitor Solutions. Both reports have previously been supplied to Council, but can be supplied again on request. 2.3 In brief, the Expert reports concluded that: (a) Transport demand: given the close vicinity of student accommodation from the University campuses (ie proximate walking distance) along with the analysis of student movements from the University's Travel Plan, the student demand on Council provided transport infrastructure is the equivalent of 0.09 HUE

28 SUBMISSION ON AUCKLAND COUNCIL'S PROPOSED DEVELOPMENT CONTRIBUTIONS POLICY 2019 (b) Reserve demand: the fact the University facilities (ie University recreational centre, internal courtyards, parks, performance spaces and gathering spaces across campus) provide students with a substantial proportion of their weekly "reserve" use hours means that the HUE rate for reserve demand correlates to 0.15 HUE. 2.4 The University considers it imperative that up to date and objective data and analysis is used as the basis for considering how the units of demand for each activity are attributed to a development type. 2.5 In light of the findings in the expert reports, the University considers that the Proposed 2019 Policy student accommodation rate of 0.22 HUE better reflects the demand that student accommodation places on new and additional Council infrastructure. Support for the Student Accommodation Development Type and rate 2.6 The University has remained vocal on requiring a change to the 2015 Policy on the basis that: (a) (b) the HUE rate attributed to "accommodation units" in the 2015 Policy did not accurately reflect the scale and unique nature of student accommodation; and the 2015 Policy overestimated the demand that student accommodation placed on new and additional Council infrastructure, particularly on activities such as reserves and transport. 2.7 As such, the University considers that the Proposed 2019 Policy rate of 0.22 HUE for reserves / open space and transport is more appropriate in its treatment of student accommodation, as: (a) (b) it better reflects the demand that student accommodation places on Council infrastructure (due, for example, to the typical single occupancy of accommodation rooms); and it now takes into account: (i) (ii) the amount of open spaces and reserves supplied by the University; and the fact all student accommodation is located in close proximity (walking distance) to the University, the primary travel destination. Proposed amendment to definition 2.8 While the University supports the introduction of a specific HUE rate for student accommodation, it proposes the following minor amendments to the definition of student accommodation set out in the Proposed 2019 Policy: Student accommodation: Living accommodation, primarily used or designed to be used by registered students, staff or guests of a tertiary education facilitiesy or education facilities and which is served by one or more communal living areas, including lounges, study areas, laundries or kitchens (additions are underlined, deletions are by strikethrough)

29 SUBMISSION ON AUCKLAND COUNCIL'S PROPOSED DEVELOPMENT CONTRIBUTIONS POLICY The University considers that these amendments better reflect: (a) (b) the users of student accommodation, which may include staff of the educational facilities; and the inclusion of study areas and laundries which are "communal" but may not be considered "living areas" for the purpose of the definition. 3. CONCLUSION 3.1 In summary: (a) (b) the University supports the inclusion of student accommodation as a separate development type at a 0.22 HUE rate; and the University suggests that the definition of student accommodation to be amended slightly to better reflect the users and use of student accommodation. 3.2 The University is grateful for the opportunity to provide this submission to the Council on the Proposed 2019 Policy, and looks forward to further engagement with the Council through the consultation process. Date: 15 November 2018 Signature: THE UNIVERSITY OF AUCKLAND by their authorised solicitors and agents Russell McVeagh: Daniel Minhinnick Georgia Cameron Address for Service: Georgia Cameron C/- Russell McVeagh 48 Shortland Street PO Box 8 AUCKLAND 1140 Telephone: georgia.cameron@russellmcveagh.com

30 The Warehouse Group Limited 26 The Warehouse Way Northcote, Auckland 0627 PO Box 33470, Takapuna Auckland 0740, New Zealand phone fax web 15 November 2018 Auckland Council - Draft Development Contributions Policy 2019 Submitted by to: contributions.policyteam@aucklandcouncil.govt.nz Feedback on the Draft Development Contributions Policy 2019 by The Warehouse Limited 1. This is a submission on Auckland Council s Draft Developments Contributions Policy 2019 on behalf of The Warehouse Limited ( TWL ). 2. TWL is a retailer with significant business interests in Auckland and the Development Contributions Policy is critical to TWL s future investment decisions. 3. TWL is a publicly listed company that operates The Warehouse, Warehouse Stationery, Noel Leeming and Torpedo 7 brands throughout Auckland and New Zealand. 4. TWL opened its first The Warehouse store in Takapuna in Since then, the company has experienced phenomenal growth. Unlike most other large retail organisations in New Zealand, TWL is New Zealand operated and, predominantly, New Zealand owned. TWL owns or leases its sites and manages all of its properties. 5. TWL currently operates: 92 The Warehouse stores (24 in the Auckland region); 70 Warehouse Stationery Stores (19 in the Auckland region); 77 Noel Leeming Stores (23 in the Auckland region); and 7 Torpedo Stores (5 in the Auckland Region). 6. TWL provides the following feedback on the Draft Auckland Council Development Contributions Policy 2019 (the Draft Policy). 7. TWL has calculated the development contributions payable for the transport component under both the existing development contributions policy and the Draft Policy, for a standard 6,000m 2 The Warehouse store in a typical urban Auckland location. The amounts are as follows: Existing Policy: $162,670 Draft Policy: $1,595, Under the Draft Policy the development contributions payable for the transport component alone is almost ten times the amount payable under the existing policy. This is partly due to the proposed increase to the contribution unit price (amount per HUE), but mostly due to the proposed 600% increase to the unit of demand factor. 9. The contributions payable for retail activity under the Draft Policy would make it unviable for TWL to develop new stores for The Warehouse Limited. 10. That level of development contributions would also make it uneconomic for stores in The Warehouse Group to lease premises in new developments because the

31 increased costs of development will be reflected in the rent that must be charged by the owner to achieve an appropriate rate of return. 11. The unit of demand factor for transport associated with retail activity is unrealistic and unjustifiable in terms of the stated purposed of the Draft Policy to recover a fair, equitable, and proportionate portion of the total cost of capital expenditure necessary to service growth over the long term. 12. Travel associated with retail activity has very little impact on the capacity of the transport network because that travel mostly occurs outside the weekday commuter peaks (which is when the transport network is under most pressure). In relation to the private motor vehicle, travel associated with retail is often part of a multi-purpose trip or undertaken as a pass-by visit with the vehicle already on the road network, and it frequently involves a more than one person (such as a family or a group of friends). 13. For these reasons, the unit of demand factor for transport associated with retail activity should be a fraction of that for offices but, under the Draft Policy, it is nearly four times greater. 14. The amount of the transport related development contributions payable under the Draft Policy for retail activity cannot be justified and will be a significant disincentive to development needed to serve, and provide employment for, Auckland s growing population. 15. TWL urges the Council to reconsider its Draft Policy, particularly as it relates to retail activity, and to reinstate the transport unit of demand factor for retail activity to that applying under the existing policy. Yours Faithfully, Fiona Shilton General Manager Property The Warehouse Group

32 SUBMISSION TO AUCKLAND COUNCIL ON THE DRAFT CONTRIBUTIONS POLICY 2019 TO: Auckland Council ("Council") SUBMISSION ON: Draft Contributions Policy 2019 ("Draft Policy 2019") NAME: Woolworths New Zealand Limited ("Woolworths") Summary 1. Woolworths is one of New Zealand's leading supermarket operators. It operates over 180 Countdown supermarkets throughout New Zealand, as well as distribution centres, meat processing plants, warehouse operations and support offices. Woolworths is also the franchisor for both the Freshchoice and Supervalue supermarket brands across New Zealand. We employ 18,500 people nationwide. 2. Woolworths is actively engaged in an expansion of its store network throughout New Zealand. With the growth planned in Auckland, it is anticipated that a significant number of new supermarkets will be required over the next 30 years to service that growth. 3. Supermarkets are critical infrastructure in communities. They serve catchments of people living and working in an area, and provide an essential support function for domestic living. Woolworths is also a significant positive contributor to the communities we operate in, and with our growth comes jobs, increased prosperity and positive outcomes for communities. 4. Woolworths has concerns with the Draft Policy 2019, and in particular the proposed increase to the transport development contributions for retail activities, from 0.47 to 2.79 HUE per 100m 2 of GDA. This six fold increase will, if approved, have significant impacts on retail development in Auckland. It will result in major cost increases which will affect the viability of retail development. Some retail developments will experience upwards of 500% increases in their transport contributions, on top of the already significant costs incurred by developers mitigating the traffic effects of their developments (often with benefits for other network users). 5. In our view, the transport contribution for retail proposed in the Draft Policy 2019 does not comply with the Council's obligations under the Local Government Act 2002 ("LGA"). In particular: (a) (b) (c) (d) there has been inadequate consultation with affected parties; insufficient information has been provided on the methodology and assumptions used by the Council to calculate the proposed transport contribution; affected parties have not been and will not be provided with a reasonable opportunity to present their views to the Council, and due consideration is unlikely to be given to the view of those parties; and the proposal fails to adequately consider the statutory purpose of development contributions

33 2 6. Woolworths seeks that the Council reconsiders transport contributions for retail activities in the Draft Policy We seek that the transport development contributions for retail proposed in the Draft Policy 2019 be rejected. Insufficient consultation 7. The Council first released a revised Draft Development Contributions Policy 2018 ("Draft Policy 2018") for consultation in May The Draft Policy 2018 set transport contributions at 1.0 HUE per 215m 2 GDA, which amounted to approximately 0.47 HUE per 100m 2 GDA. This was consistent with the Development Contributions Policy Variation A ("Existing Policy"). 8. On 1 June 2018, the Council extended the expiry date of the Existing Policy to 31 January 2019, to allow time for (amongst other things) further consultation on the Draft Policy The Draft Policy 2019 was released for consultation again five months later, on 19 October The Draft Policy 2019 proposes to increase the transport contributions for retail activities to 2.79 HUE per 100m 2 almost six times higher than that provided under the Existing Policy and the Draft Policy 2018 released in May this year. 10. Despite extending the expiry date of the Existing Policy to enable further consultation, the Council has not consulted with key stakeholders on the proposed increase in transport contributions for retail activities. Under section 78 of the LGA, the Council has an obligation to give consideration to the views and preferences of persons likely to be affected by, or have an interest in, its decisions and policies. 11. Given that major retailers like Woolworths will be clearly directly affected by the Draft Policy 2019, we would have hoped to have been consulted on the proposed changes. However, the Council made no contact with Woolworths, or any "Key Retailers Group" members on the proposed changes. The Key Retailers Group worked closely with Council staff throughout the Unitary Plan process on a range of retail-related issues, and its members are well known to the Council. All relevant information has not been provided to affected parties 12. Section 82(1)(a) of the LGA states that the Council should provide affected persons with reasonable access to relevant information. Woolworths, which will be significantly affected by this change, has not been provided with access to all relevant information. In particular, the Council has not provided sufficient information on the methodology and assumptions used to calculate the units of demand for transport, nor has it provided robust data to justify such a significant increase. 13. The Council's consultation documentation does not provide sufficient information. Some high level explanations are given as to how transport demand factors have been calculated and the material lists a series of research reports that the Council has relied on. 1 Those reports are outdated, based on material / authorship outside of Auckland (or even New Zealand) and do not provide a robust basis for calculating development contributions. For example, the RTA Guide to Generating Traffic Developments, one of the reports cited, was issued 16 years ago for authorities in New South Wales, Australia. A New Zealand Transport Agency ("NZTA") report cited is dated November Auckland Council, How we set development contributions charges. 2 NZTA Research Report 453, Trips and parking related to land use, November 2011, at page

34 3 14. The data provided in the 2011 NZTA report is not an appropriate basis for determining development contribution charges. The report states that it: 3 includes a review and comments on existing guidelines for use by practitioners when assessing parking demand and trip generation rates for a wide range of land uses and situations. It indicates the probable range of demand rather than recommending the application of a fixed standard or rule. 15. That report, while noting that retail has higher trip generation rates than other land uses, also states that a comparative analysis of average trips over the past 10 to 15 years has shown that the trip generation rates for supermarkets have declined. 4 It is difficult to see how this report provides any justification of such a substantial increase in development contributions for retail activities. 16. We note that, even if the reports are relevant, both were available at the time the Existing Policy and the Draft Policy 2018 were released. It is our view that the Council should not now choose to rely on those reports (or parts of them) to justify such a significant increase in transport contributions in the Draft Policy In the Draft Policy 2019, the Council appears to have set the proposed transport contributions by taking an average daily trip rate for retail (this trip rate is not provided, nor is it explained how it was determined); which then has an undisclosed reduction factor applied to it to take into account pass-by trips; then an arbitrary reduction to that figure is applied to recognise that it is actually households that generate traffic not retail activities; and then a further arbitrary reduction to that figure is applied to recognise that retail is usually more efficiently located that residential. 18. In our view, this level of detail does not satisfy the Council's statutory obligations. Inadequate opportunity to present its views to the Council 19. Section 82(1)(d) of the LGA provides that affected parties must be provided with a reasonable opportunity to present their views to the Council in a manner and format that is appropriate. Woolworths considers that the format in which the Council has enabled parties to present their views is inappropriate. 20. The Council released the Draft Policy 2019 for consultation on 19 October 2018, providing only 20 working days for parties to make written submissions. The Council has not allowed time for a hearings process to enable parties to speak to their submissions. It has scheduled one day for some submitters to present to the Councillors (on 23 November 2018) on a "first come first served" basis. We do not consider this appropriate in the context of such significant changes. 21. In our view, it would be unreasonable and unfair for the Council to implement the Draft Policy 2019 without having given submitters a sufficient opportunity to present their views to the Council. 22. Under section 82(1)(e) of the LGA, the Council is required to undertake consultation and make decisions with an open mind. The Draft Policy 2019 states that "it becomes operative on 1 January 2019". This provides the Council with just a few weeks (over Christmas) to consider any submissions received and incorporate any changes. This 3 NZ Transport Agency Research Report 453, Trips and parking related to land use, November 2011, at page NZ Transport Agency Research Report 453, Trips and parking related to land use, November 2011, at page

35 4 limited timeframe raises real concerns that the Council has not allowed enough time to properly consider any submissions received. Recovery of disproportionate portion of the costs 23. The statutory purpose of development contributions under section 197AA of the LGA is to enable councils to recover from developers "a fair, equitable and proportionate portion of the total cost of capital expenditure necessary to service growth over the long term". 24. A contribution of 2.79 HUE per 100m 2 GDA will result in the Council recovering an unfair and disproportionate portion of costs from retail developers. Contributions can only be required where there is a causal nexus between the demand created by a development and the need for the Council to provide new or additional assets of increased capacity to service the growth. 5 Such a high unit of demand runs the risk of an "over-recovery" of costs, which is contrary to the development contribution principles in the LGA. 6 There is not enough information in the consultation documents to provide certainty or comfort that the Council will not be over-recovering costs from developers. 25. Fundamentally, the shift in weighting of development contributions from households to retail is unfair. Households are the true generators of traffic, and other activities like retail are predominantly a consequence of residential development. The presence of retail can moderate trips, and the more retail that is built, the more efficient the shopping trips become. While retail can benefit from the households and the infrastructure that serves the households, fundamentally the cost to the retail developer for the supporting infrastructure should be in proportion to their contribution. However, the Council appears to be looking to the retail sector to shoulder a disproportionate amount of the costs of the Council's transport spend commitments over the next 10 years. 26. Section 200(1) of the LGA also prevents the Council from requiring development contributions where the developer will fund or otherwise provide the same infrastructure. Retail developers are already required to undertake significant transport and traffic mitigation works as part of the resource consenting process, at their own cost. The Council cannot "double dip". The reports that the Council has relied on (while outdated) also expressly acknowledge the need to take into account any existing or prior contributions for developments undertaken over time By way of example, for Countdown Ponsonby, Woolworths paid $1.5 million on transport related works to mitigate the effects of development, in addition to $500,000 (plus GST) in transport development contributions and $1.7 million in rates over the development period. If the contributions were calculated under the Draft Policy 2019, they would be have been significantly higher, and would have had a detrimental impact on what has become an award-winning project. 28. In other recent developments, such as Hobsonville and Beachlands, Woolworths has spent over $3 million on transport related upgrades with no reductions in development contributions. This expenditure is significant and benefits the wider network. 5 LGA, s 197AB(a). 6 LGA, s 197AB(b). 7 RTA, Guide to Traffic Generating Developments, October 2002, at

36 Relief sought The six fold increase in transport contributions for retail activities will, if approved, have significant negative impacts on retail development in Auckland. It will result in major cost increases which will make development, in many cases, untenable. 30. Woolworths seeks that the Council reconsiders transport contributions for retail activities in the Draft Policy 2019, having regard to its legal obligations under the LGA. We seek that the transport development contributions for retail proposed in the Draft Policy 2019 be rejected. 31. Woolworths wishes to be heard in relation to this submission. Signature: WOOLWORTHS NEW ZEALAND LIMITED by its solicitors and authorised agents Russell McVeagh: Allison Arthur-Young / Lauren Eaton Date: 15 November 2018 Address for Service: C/- Lauren Eaton Russell McVeagh Barristers and Solicitors Level 30 Vero Centre 48 Shortland Street PO Box 8/DX CX10085 AUCKLAND 1140 Telephone Facsimile