RESERVE REVOCATION FOR HUNDERTWASSER PROJECT Ruben Wylie - Manager - Infrastructure Planning

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1 MEETING: COUNCIL - 10 AUGUST 2017 Name of item: Author: Date of report: 09 June 2017 Document number: Executive Summary RESERVE REVOCATION FOR HUNDERTWASSER PROJECT Ruben Wylie - Manager - Infrastructure Planning A Item: 5.2 Kawakawa Hundertwasser Park Visitor Centre-Te Hononga is to be developed on Council owned land at the rear of the Hundertwasser public toilets. The reserve in question is Lot 1 DP Far North Holdings Ltd is delivering the project and will own the assets associated with the development. Far North Holdings Ltd has advised that it needs to own the land on which the development is to be completed in order to secure a bank loan. The reserve status of the land will need to be revoked before it can be sold. The purpose of this report is to seek a resolution to initiate the revocation process. This report was submitted to the Bay of Islands-Whangaroa Community Board meeting held 03 July The Board makes the following recommendations to Council: Recommendation: THAT the public consultation process for the revocation of the reserve status from the local purpose (parking) reserve contained in CFR is commenced; AND THAT the Bay of Islands-Whangaroa Community Board is appointed to hear any submissions and or objections received in response to the public process, and then to make a recommendation to Council in respect of the proposal. 1) Background Far North Holdings Limited (FNHL) has developed a commercial model to build the visitor centre at Kawakawa: the Kawakawa Hundertwasser Park Visitor Centre-Te Hononga (KHPCT). The initiative has received widespread community support. In 2012, Council, in conjunction with the Kawakawa Hundertwasser Park Charitable Trust, prepared a Reserve Management Plan (RMP) for those land parcels envisaged to accommodate the future Hundertwasser Park. This RMP was reviewed and amended in At the same time, FNDC signalled its commitment to the project through the Long Term Plan by agreeing in principle to relocate its library and service centre into the proposed Visitor Centre. In 2016, Northland Regional Council (NRC) commissioned a business case and committed further funds to the project. Far North Holdings Ltd (FNHL) was appointed as the project director. FNHL completed concept plans for the development. The plans have been developed in accordance with the RMP and propose the development of a Council owned parcel of land at the rear of the Hundertwasser toilets. It is relevant to note that FNHL has also lodged an application with the Ministry of Business Innovation and Employment Document number A Page 1 of 5

2 for investment from its Tourism Infrastructure Fund. FNHL has advised that delays that could affect the delivery of that project could place that funding at risk. The site subject to the development is a 2357m 2 parcel of Council owned reserve land, designated local purpose (parking) reserve. A map of the land is provided in Attachment 1. The RMP states that the land is to be leased to FNHL. However, FNHL has recently advised it cannot secure a loan agreement with its bank where the land for the proposed development has reserve status, or is leasehold. A statement issued by the BNZ reinforces this by setting out that securing a loan arrangement would be more difficult where the land is leasehold rather than freehold. To overcome the difficulty in securing funds, FNHL has requested that Council revoke the current reserve status of the car park and that ownership is transferred to FNHL. 2) Discussion and options 2.1) Reserve description The land in question is a 2357m 2 local purpose (parking) reserve, and is vested in the Far North District Council. It is described as Lot 1 DP , contained in CFR The site is depicted in the plan provided as Attachment 1. In 2001 Council approved expenditure to acquire a portion of land for additional car parking in the area for visitors to the Hundertwasser toilets and in 2003 this land was purchased by Council and vested as a local purpose (parking) reserve. The carpark is located behind the Kawakawa Hundertwasser toilets in the centre of Kawakawa township and is used for visitor and general public car parking. 2.2) Legal setting and process Reserves Act 1977 The Kawakawa Hundertwasser Park NZ Management Plan (Adopted January 2012 and amended December 2014) provides for the possibility of the local purpose (parking) reserve to be changed to a local purpose (community facilities) reserve if the main building is located on this portion of land. The RMP does not discuss revocation and sale of the carpark land. It does make provision for the lease of the land. Under the Reserves Act, Council is able to offer a long term lease of 33 years with a right of renewal for another 33 years, and another right of renewal for 33 years (a 99 year lease in total). Section 41 Reserves Act 1977 (Management Plans) places no requirement on a local purpose reserve to be covered by a reserve management plan. Consequently, changing the lease of the carpark allotment to a revocation and sale would not be considered a comprehensive review that would trigger the notification process typically required when reviewing reserve management plans. Such a change could be considered as a minor amendment to the reserve management plan and could be undertaken by Council resolution. Although there is no need to notify the public under section 41 Reserves Act 1977, notification of a proposed revocation and sale of the land is required under section 24 of the Act. Process A Council resolution is required to commence the public consultation process and every person affected may object to the proposal. All submissions are to be made in Document number A Page 2 of 5

3 writing within one month after the date of the first publication of the notice of the proposal. For those submitters who indicate they wish to be heard, Council will need to provide a forum to hear the submissions. The Reserves Act stipulates that Council can delegate the hearing process to a separate committee, or even an individual. Unless Council wishes to hear and consider submissions itself, a delegation from Council is required. The recommendation is to delegate this task to the Bay of Island- Whangaroa Community Board. In accordance with the Reserves Act, a decision on the submissions must be made by the full Council as the administering body of the reserve. The Council s resolution together with a summary of all objections and comments received, and a statement as to the extent to which they have been allowed or disallowed, must be sent to the Minister of Conservation for approval. 2.3) Options Option 1: Lease the local purpose (parking) reserve The current RMP envisages the reserve land to be leased as part of the Hundertwasser Park development. As outlined above, the Reserves Act 1977 allows, in this instance, for a long term lease of up to 99 years. External legal advice has been received confirming that Council can enter into a lease agreement without the need for any further public notification under the Reserves Act given the status of the reserve. Furthermore, it is also considered that the consultation undertaken thus far with the local community is sufficient to meet the general decision-making requirements of the Local Government Act The advantage of the lease option is that it can be put in place as and when required without any further delays of public notification. The disadvantage, as outlined earlier in this report, is that FNHL may experience difficulty in securing a loan arrangement to fund the project because leasehold land would inhibit the bank from obtaining appropriate security over land or assets. Option 2 (recommended option): Revoke the reserve status from the local purpose (parking) reserve, Lot 1 DP and sell the land to FNHL. As outlined earlier in this report, any Council decision to sell the reserve will require the revocation of the reserve status, and will trigger the public notification process under the Reserves Act. An estimated timeframe to complete the statutory process would be in the vicinity of 6 months. FNHL has indicated that it has applied for funding to the Ministry for Business Innovation and Employment (MBIE). FNHL advised that, once the funding has been approved, the physical works need to be able to start very soon thereafter. However, the application on the latest round of funding was unsuccessful. Whilst there will be another round of funding, it is unlikely an application will be decided upon until the end of That timeframe lines up with the estimated timeframe for the revocation process. 3) Financial implications and budgetary provision The report does not consider the project as a whole but only those matters relevant to the land on which the project is to be developed. The financial implications in that regard only relate to the value of the sale of the land. Should the reserve status be Document number A Page 3 of 5

4 revoked, a separate report will be brought before Council to enable the sale of the land. The value of the sale will be considered at that time. 4) Reason for the recommendation The preferred option will enable FNHL to secure loan funding though its bank to deliver the project. The sale of the land will not bring about any material changes to what is set out in the current reserve management plan, nor the project itself. In that regard, the subject land will be used for the same purpose whether it is leased or sold. The preferred option provides more certainty for the project to be funded. Manager: Jacqui Robson - General Manager Infrastructure and Asset Management Group Attachment 1: Site Plan - Document number A Document number A Page 4 of 5

5 Compliance schedule: Full consideration has been given to the provisions of the Local Government Act 2002 S77 in relation to decision making, in particular: 1. A Local authority must, in the course of the decision-making process, a) Seek to identify all reasonably practicable options for the achievement of the objective of a decision; and b) Assess the options in terms of their advantages and disadvantages; and c) If any of the options identified under paragraph (a) involves a significant decision in relation to land or a body of water, take into account the relationship of Māori and their culture and traditions with their ancestral land, water sites, waahi tapu, valued flora and fauna and other taonga. 2. This section is subject to Section 79 - Compliance with procedures in relation to decisions. Relationship with existing policies and Community outcomes. Possible implications for the relationship of Māori and their culture and traditions with their ancestral land, water, site, waahi tapu, valued flora and fauna, and other taonga. Views or preferences of persons likely to be affected by, or to have an interest in the matter, including persons with disabilities, children and older persons. Does the issue, proposal, decision or other matter have a high degree of significance or engagement as determined under the Council's Policy #2124? If the matter has a Community rather than a District wide relevance has the Community Board's views been sought? Financial Implications and Budgetary Provision. Chief Financial Officer review. There are no policies directly relevant to this proposal. The Hundertwasser project is aligned with the vision of the local community, and is generally in accordance with the Reserve Management Plan. Local tangata whenua have been involved with the Hundertwasser Project for a number of years and are in support of the intended outcome. The project has considerable community support and will provide for all members of the community. No. This is a report to the Community Board. No material impact on current budgets because the decision relates only to commencing a statutory process which is a standard operational matter. Report had been provided for review. Document number A Page 5 of 5