Guest Blog

22 Dec

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.

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4 Responses to “Guest Blog”

  1. Kylie December 22, 2015 at 9:12 am #

    An awesome blogpost, I have to say. Totally agree!

  2. Realist December 22, 2015 at 9:48 am #

    You only have to look back a few years, a Private developer who owned land on Don street was considering building a hotel on his site, something that would have drawn people into the CBD (private investment too) however between the ICC and ILT the whole concept was knobbled, the developer sold the land and here we are a number of years later, the ILT still haven’t developed any new hotel in the center, and the ICC have the feeling they need to do something themselves to try and re-vitalize the area by becoming developers.
    The answer is rather simple, remove the obstacles to investment, reduce the monopolies and allow private enterprise to flourish.

    To quote the article: (May 2010, yes over 5years ago)

    However, Mr Thomson said he thought Invercargill was ready for a new hotel and the foot traffic it would generate would benefit local businesses also. The council lacked business acumen and the crossover of councillors and members of the ILT was inappropriate.

  3. Phil T December 22, 2015 at 7:52 pm #

    Some very pertinent points made. I totally agree that council should never be the developer and their role should be in assisting interested parties in what ever manner is suitable. Even forming partnerships with developers would be a far better way of encouraging development. The other point that is missed is this proposed development is not bringing anything new into the CBD. it is catering for businesses that are already there and so will leave other buildings empty. The ICC has been buying up inner city property for some time without any clear strategy on why or what for other than they have the money so why not. And the management think as the money is from a separate fund they don’t need to consult which is rubbish.
    Mr Thompson has just completed the multi million dollar rebuild of the old Dunedin PO which gave the economy up there a major boost when we could have had the same money being spent in our CBD. The ILT president made plenty of noise at the last election about the new hotel but it was just hot air and no doubt we will hear all the same stuff in the lead up to next years election. But like it has been pointed out the incestuous relationship between the ILT and the ICC over many years has a lot to do with why its just to easy to do nothing but talk.

  4. Phil T January 9, 2016 at 12:32 pm #

    A good example of how a city should be progressing. Invercargill is sitting on its hands while Dunedin is pushing ahead with development. So many jobs will be created just with the build. http://www.odt.co.nz/news/dunedin/369256/hotel-cost-90m

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