Council Approves to Dispose of Land in Manukau City Centre

Earlier today I blogged on the Auckland Council Finance and Performance Committee looking at selling off land it (the Council via Auckland Council Property Limited) owns. An extract from that post:

Council Sells Land – Which It Should NOT in One Case

Disposal Recommendation Report

 

File No.: CP2014/20465

 

Purpose

1. This report seeks approval to sell two non-service council owned properties that Auckland Council Property Limited (“ACPL”) consider suitable for sale.

Executive summary

2. ACPL is required to identify properties from within council’s portfolio that may be suitable for potential sale to a combined value of $30 million by 30 June 2015.  ACPL and Auckland Council Property Department (“ACPD”) work collaboratively on a comprehensive review process to identify such properties.
3. Capital receipts from the sale of the surplus properties will contribute to all Auckland Plan outcomes by providing the council with an efficient use of capital and prioritisation of funds to achieve its activities and projects.
4. The two properties proposed for sale in this report have a cumulative rating value of $13 million and relate to the $30 million target.  These properties have been through the agreed consultative process including organisation wide internal officer consultation, local board and Iwi engagement.  The feedback has been supportive of the proposed disposal of the sites.
5. A detailed overview of the rationalisation process undertaken for these properties is outlined in the Comments, Local Board Views and Implications, and Maori Impact Statement sections of this report. Site specific detail, including information and feedback gathered through the rationalisation process, is contained herein under the respective property attachment.

 

Recommendation/sThat the Finance and Performance Committee: a)   approve the disposal of the land below, subject to the satisfactory conclusion of any required statutory processes: 20 Barrowcliffe Place, Manukau comprised of an estate in fee simple, containing 50,000m2 more or less being part of Section 13 SO 435724 contained in certificate of title NA 44C/3; 31-33 Manukau Station Road, Manukau comprised of an estate in fee simple, containing 9767.27m2 more or less being part of Section 1 Survey Office Plan 435724contained in certificate of title CFR 582667; b)   approve the final terms and conditions under the appropriate delegations.

 

Comments

 

6. ACPL and ACPD work collaboratively on a comprehensive review process to identify properties in the council portfolio that may be suitable to sell.  Once identified as a potential sale candidate ACPL takes the property through a multi stage engagement process.
7. The first phase of the process involves engagement with all council departments and relevant CCOs.  The engagement establishes whether a property is needed for a future funded project or whether it must be retained for some clear strategic purpose.  This is determined by an Expression of Interest (“EOI”) process whereby officers can request that all or part of a property is retained.  Alternatively officers may request that the property be encumbered or covenanted as part of the disposal process.  If the EOI sets out a robust financial analysis and evidence based rationale to retain the properties, then the EOI is endorsed.
8. If however the reasoning is more subjective a thorough business case is required.  An inter-disciplinary council and ACPL steering group comprised of senior managers, called the Property Review Steering Group (“PRSG”) meets on a monthly basis to assess the business cases.  The PRSG provides an opportunity for properties to be considered in a cohesive and integrated manner by relevant council departments and CCOs.
9. The Heritage Unit is invited prior to the EOI process to flag any sites of particular archaeological merit that need to be assessed further.  ACPL also engages with the Closed Landfills and Contaminated Land Response team prior to the EOI process commencing to ensure any possible contamination issues that may be associated with a property are identified.
10. The EOI process provides the Maori and Strategy Relations team the opportunity to flag any issue that is of particular relevance to Maori in connection with the potential disposal of a site.
11. Once a property has been cleared of any service requirements, ACPL then consults with Local Boards, Ward Councillors, Mana Whenua and the Independent Maori Statutory Board.
12. All sale recommendations must be approved by the ACPL Board before it makes the final recommendation to the Strategy and Finance Committee.

 

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31-33 Manukau Station Road, Manukau property information

This particular sale for me causes some issues in the fact Council is losing an opportunity here to leverage private and central government development on its (Council) land that is situated right next to a transport hub (if not on top of) and in the Manukau City Centre Metropolitan Centre Zone.

The agenda piece

31-33 Manukau Station Road, Manukau

Property summary

1. The subject property is comprised of three parts of 31-33 Manukau Station Road that are currently used for car parking.  The areas of this site that have been subject to rationalisation are proposed for residential and commercial development.  No funded service use has been identified for this site.  The Otara-Papatoetoe Local Board (OPLB) and relevant Iwi have been consulted and do not oppose the proposed disposal and development of this site.  As this property is not required for current or future service requirements, we recommend that this site be sold.

Property information

2. The subject property part of a 2.9381 hectare site.  Approximately 9767 m² of the entire site is subject to rationalisation.  Auckland Council’s Manukau civic building is located on this property, outside of the area subject to rationalisation.  The balance of the site is currently used for car parking.
3. The land value of the area subject to rationalisation is approximately $6.5 million.  The Proposed Auckland Unitary Plan zones are Metropolitan Centre, Manukau Rapid Transit Link overlying zone and Aircraft Noise Notification Area.  The site is subject to a Manukau Rapid Transit Link designation.
4. This site was acquired by the County of Manukau in 1963 for “an administration centre, reserves and general county purposes”.Planning and construction of the Manukau City Council administration centre was commenced in 1971 and completed in 1976.  The site was identified for partial transfer to non-service by the Portfolio Review Steering Group on 5 December 2013.
5. The entire property has been the subject of master planning, and has been identified for a transit orientated development.  The proposed development includes a bus terminal, railway station and commercial and residential development.  ACPL has been working on the proposed commercial and residential development, and the area subject to rationalisation is being rationalised to allow the commercial and residential portion of this development to progress.  The remainder of the property will continue to house Auckland Council’s Manukau civic building.

 

Consideration

Internal consultation

6. The rationalisation process was commenced in April 2014.  No alternative uses for this site were identified during this stage.
7. The Heritage Unit was invited through the EOI process to raise any particular archaeological issues.  The Closed Landfills and Contaminated Land team are also asked to assess all properties prior to the EOI process commencing to ensure any possible contamination issues that may be associated with a property are identified.  Neither party has flagged any relevant issues.
8. The EOI process provided the Maori Strategy Relations team the opportunity to flag any issue that is of particular relevance to Maori.  No issues have been raised.

Local board views and implications

9. The OPLB endorsed the proposed disposal of this site at its August business meeting.

 

Technical Considerations

1. This site is not subject to offer back requirements under section 40 of the Public Works Act 1981.
2. This property is not one of the Council’s strategic assets to which the significance policy would apply.

ACPL’s independent commercial advice

3. The results of the rationalisation process to date indicate that this property is not required for current or future service requirements.  As such we recommend that this site be sold.  Should a resolution to divest this property be obtained, ACPL will continue to progress the proposed residential and commercial development of this site in conjunction with Auckland Transport, and will select an appropriate development partner.

 

 

 

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Seeming the flawed saw-tooth designed bus station is going ahead (a pity) the focus goes on what could be done with the land in yellow. Yes it can be developed as residential and commercial given that the area is a Metropolitan Centre. The large tract of yellow at the bottom would be PERFECT rather than using Hayman Park (thus shrinking it further) for the Te Papa North facility that Central Government wants to build as well. However, Council should NOT sell this land off but rather hold onto it and leverage private/central government development off it while still holding the land. Meaning Council is actively leasing the area out which would generate a greater rate of return than just the rateable valuable it would otherwise get from its annual rates collection.

Overseas including the USA Local Authorities through departments like Auckland Council Property Limited actively engage in property development as well as being a landlord. Usually through Public Private Partnerships the Local Authority’s property/development arm would own the land and even the building above but lease it back out to the private or central government sectors. Through this a Council can directly control what kind of development and activity occurs in the area while also pulling in a greater revenue stream for future investments than it would otherwise gain through standard land taxes (rates) on the land (or capital improvement in our case) itself.

Often such situations occur when mass transit is needing to be built. Given this particular area is to house the bus station such a PPP opportunity readily presents itself. An example of a situation can be seen here that I just picked up this morning:

Note: 1 million square feet is 92,903 square metres so that is a pretty large development.

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Situation

Just earlier this afternoon the Committee apart from Manukau Councillor Arthur Anae agreed to sell the land off.

What an absolute shame in the fact it should have triggered the Significance Policy which would have triggered full public consultation on the issue. Especially as the Independent Maori Statutory Board were not happy with the poor consultation (if any) it got from Auckland Council Property Limited around the sale.

 

With that land now heading to the blocks thanks to a Council knee jerk reaction (of which I highly doubt the Otara-Papatoetoe Local Board will see any proceeds from the sale when the Local Board faces the biggest incoming budget cuts  (being also discussed at the Committee today)(I wonder in the end if those proceeds instead of going to the Otara-Papatoetoe Local Board will go to the City Centre instead)) South Auckland just lost the perfect opportunity to engage in a full Public Private Partnership to develop the land – in a Metropolitan Centre – more to the point a City Centre while getting a healthy investment income from the subsequent leasing (as well as the standard rates) to future fund improvements in the Manukau City Centre and wider South Auckland area.

Pretty much the Councillors just sold our future (future investment income from contributions, rates and most of all leasing) off in the face of very large budget cuts coming up in the 2015-2025 Long Term. To make matters worse (and this really gets me going) is that Auckland needs all her existing park space she has as we intensify (Greenfield development gets new parks to serve it in most if not all cases) and for Manukau that is Hayman Park. Now we know Te Papa North will be built on Hayman Park effectively reducing the Park by up to half. Manukau City Centre loses half of its only large green park to a development (a good one though) that should be located on Council owned land (where Council can charge leasing fees) mixed in with other commercial and resident developments suited to a Metropolitan Centre. To make it more painful there is not any other decent green space to serve Manukau near by with the closest being the Botanical Gardens.

So all in all we all lose from the sale of the Manukau Land. 

[Update and Edit]: Being a blogger and one who is active in Auckland some days things can get very emotionally charged when elected representatives make decisions around projects close to your heart. In such emotional charge I levelled the accusation of gross and mass incompetency against the Councillors after they passed the resolution to sell the Manukau land. After reflection I have withdrawn the remark and offer my apologies to the Councillors over the remark as that was unprofessional of me as an Auckland Commentator to make such a claim. Do bear in mind though the rest of the blog post stands as I am still very angry (as are others looking at the feedback) over the decision to sell the land. And yes we all know budget pressures Council faces as well.

-Ben Ross, Admin to Talking Auckland-

 

Short sightedness, knee jerk, 20th Century thinking to a 21st Century problem. AND Otara-Papatoetoe Local Board face big deferrals while losing a potential revenue stream from its Metropolitan Centre. I really feel for the residents and businesses of South Auckland after Council including the Deputy Mayor said the South needs a lot of loving and can not fail.

Well Council just did the absolute opposite in selling that land.

What on Earth do we elect these Councillors to do? It is something if I was a Councillor I would never do what they just did. Yes I am not happy with this either!