I am fortunate enough to be able to share someone else’s thoughts, rather than just my own. I haven’t got time to provide links right now. Here is the original article though for those not up to speed on ICC’s foray into property development (’cause Awarua and Esk St East have been soooo successful).
From hereon in is our guest:-)
Private Commercial Property Developers not required in Invercargill City CBD
That’s basically the message the Invercargill City Council’s recent announcement that it is now going to become a commercial property developer could be sending to potential local and outside investors.
This despite the fact that the ICC’s very own Investment Property Activity Management plan stating the activity “DOES NOT” include development.
It also states the activity is self funding and makes its money through the sale of property and re-investment, and that it will not require any additional capital funding. And based on some of this the public do not get consulted on the plan as it has a positive effect on rates.
So what has happened? There was absolutely nothing in the Long Term Plan consultation document to state that the ICC were significantly changing how its Investment Property Activity operated, or was funded, nor that they were going to become commercial property developers in their own right.
All of these points are something the public should have been consulted on and should have been able to have their say. The ICC by all accounts believe they have done this, they point to page 275 of the LTP which states “Council is investigating development opportunities at 16 Don Street with funding set aside in the 2015/16 and 2016/17 years.”
All well and good, apart from the fact that the LTP was not a publicly consulted on document, it was the after effect of consultation and only became public post adoption.
Despite this, that very statement simply implies they are investigating options which is actually part of what the function does, it could then look to sell the concept on to private investors/developers in line with its function, that statement itself does not state they are going to become developers.
If the ICC wish to try page 275 as their Clayton’s attempt at saying they have consulted then page 269 would probably put this to rest as it states the activity contributes by “Investment Property supports appropriate commercial and economic development in the District environs through the purchase, sale and/or lease of land. Investment Property maintains and administers commercial, industrial, residential, rural and retail property that supports economic growth.
I don’t see anywhere within those contributors a statement that says it will be the Developer.
Residents should be concerned with the ICC trying to become a commercial property developer, firstly because they haven’t even given the public the courtesy of being consulted in any meaningful way, but more so because it sends a very bad message to potential investors/developers that the City Council is prepared to step in and conduct the commercial development required in Invercargill.
Private developers can not compete with a councils ability to source cheap finance, backed by rates, how many other rather sad and sorry buildings in the Invercargill CBD will end up in council ownership and development down the track if the ICC continue on their path of being developers?
The signals being sent are wrong, by all means the ICC should be looking at what can be done, investigating options, but should then be acting in accordance with their plans and looking at passing these opportunities over to private investors and developers to draw them to the city and encourage outside investment as let’s face it, the public can ill afford to end up being the major property owners within the CBD, nor should they want to be.