10/327 Subject: Prepared by: Te Araroa Domain Leasing Decisions Angus Glengarry (Community Property Officer) Meeting Date: 27 May 2010 Report to COUNCIL for decision SUMMARY There are two sporting clubrooms situated on Te Araroa Domain that do not have any occupational agreement in place. It is proposed that Council enters into lease agreements with the clubs to formalise the occupation of recreation reserve. This issue needs to be decided by Council, as staff do not have the delegated authority to enter into lease agreements. The lease of land to be used for sporting clubrooms is consistent with the Reserves Act 1977, the LTCCP and Council polices. The options have been considered, together with the legal and financial implications, and there is nothing to impede the Council from entering into a lease agreement with the clubs. RECOMMENDATIONS That the Council 1. receives the report 2. agrees to enter into two separate lease agreements with the Tokararangi Sports Club Incorporated and East Cape Hunting Fishing and Tourism Incorporated for part of Te Araroa Domain 3. agrees to a lease term of five years with two five year rights of renewal expiring 30 May 2025. The annual rental shall be $225 excluding GST, to be reviewed every five years in accordance with the GDC Reserves Rental Policy. Angus Glengarry Community Property Officer Peter Higgs Engineering and Works Manager Page 1 of 5
1. BACKGROUND East Cape Hunting Fishing & Tourism Incorporated The club was recently formed 1 for the promotion, encouragement and enjoyment of amateur sports, hunting and fishing, event tourism and the promotion of youth development and local culture 2. The club wanted to operate out of the Kawakawa clubrooms located on the reserve. However, the club was unable to enter into a lease as it was not the owner of the building. At a meeting held on 30 March 2010, the trustees of the former Kawakawa Combined Sports Club moved that the ownership of the Kawakawa Combined Sports Club premises be transferred to the East Cape Hunting Fishing & Tourism Club Incorporated to allow for the lease agreement with the Gisborne District Council to proceed. Tokararangi Sports Club The Tokararangi Sports Club has operated out of a clubroom on Te Araroa Domain for a number of years without any formal agreement in place. In the interests of fairness, it is proposed that the Tokararangi Sports Club also enters into a lease agreement with the Council. It would be inconsistent to allow the club to continue operating without an agreement while the adjacent club is complying with the GDC Reserves Rent Policy and paying the associated site rental. The term for the lease agreements is for five years with two five year rights of renewal. The rent shall be reviewed every five years. There are currently many informal occupations of Council reserves that are being progressively worked through and the review of this arrangement is part of the process of formalising all activities on Council reserves. Refer to the appended site plan for the leased areas. 2. DISCUSSION AND OPTIONS The following options have been considered: Status quo and let the clubs continue to operate without a formal agreement in place. This option has been rejected as section 40 of the Reserves Act 1977 requires the Council to administer, manage and control in accordance with the provisions of the Act. To allow occupation by an organisation without the controls of a lease could lead to a breach of this obligation. Have a registered valuer ascertain a market rent for the sites and enter into a new agreement at a commercial level. This option has been discounted as the clubs are clearly not operating in a commercial manner. It would therefore be inappropriate to apply strict market principles. 1 Incorporated under the Incorporated Societies Act 1908 5 March 2010. 2 The primary objective from the society s rules. Page 2 of 5
Enter into new agreements and determine the annual rental in accordance with GDC Reserves Rental Policy. This is the preferred option. The granting of a lease puts in place controls and measures that allow the Council to properly manage tenants on reserves in accordance with the Council s obligations under the Reserves Act 1977. A lease also clearly defines both parties obligations mitigating the likelihood of disputes arising over responsibilities for outgoings such as building and grounds maintenance. 3. SIGNIFICANCE The leasing decisions have been assessed against the criteria and have not been deemed decisions of significance. 4. CONSULTATION The proposed lease agreements were publicly notified in the Gisborne Herald on Wednesday 14 April 2010. No written submissions were received for or against the proposed agreements. Further negotiations with the clubs will be required to clarify maintenance responsibilities for a shared septic field. 5. COMMUNITY OUTCOMES The leasing of Council land contributes to the community s wellbeing through indirect investment in sports and recreation. This is consistent with the community s primary outcome for a Healthy Tairāwhiti. The public notification of the leases aligns with the community outcome for a Fair and Active Democracy by providing the community with an opportunity to comment on the proposed agreements. 6. LEVELS OF SERVICE The proposed lease agreements will have no impact on levels of service. 7. FINANCIAL The lease conditions place all of the maintenance obligations for the buildings onto the lessee. The income from these leases is an operational income, which is used to reduce costs associated with maintaining Council s parks and reserves. 8. LEGAL Te Araroa Domain covers an area of 6.2 hectares and is legally described as Section 33 BLK IX, Te Araroa Maori Township ML 1312/3. The land was classified as recreation reserve in 1980 and is subject to the provisions of the Reserves Act 1977 3. 3 New Gazette 1980 page 1049 Page 3 of 5
The Council may enter into agreements with the clubs pursuant to section 54(1)(b) of the Reserves Act 1977. This section fits appropriately with the clubs use of reserve for outdoor sports, games and other recreational activities and also refers to buildings or other structures already on the reserve. 9. POLICY Where a leasing proposal is required to be approved by Council, such as the leasing of reserves, the report is to include the results of applying the GDC Reserves Rental Policy. The rent has been calculated in accordance with that policy. The leasing of recreation reserve for sporting purposes is consistent with the Reserves Act 1977, the LTCCP, the Annual Plan and Council policies. The options have been considered, together with the legal and financial implications, and there is nothing to impede the Council from entering into the lease agreements. 10. APPENDICES Site Plan. Page 4 of 5