The University of Otago faces a ''large'' rates hike for
its Executive Residence amid complaints it has been
undercutting private hotels by offering on the open market
rooms meant for university guests.
The situation came to light after a Dunedin hotelier
complained to Dunedin City Council chief executive Paul
Orders and the Otago Daily Times last month.
The man - who would not be named - told the ODT his
business was being undercut by the university, which had been
advertising the residence for commercial use despite not
paying commercial rates.
He first complained to the council in July last year, but
alerted Mr Orders again, and the ODT, when adverts
could still be found on an accommodation website and in a
magazine in December.
He said room rates at the residence were ''quite low''
compared with his own, despite both operating in the same
sector of the market.
''If you are not paying commercial rates then you can do that
sort of thing,'' he said.
Council staff last week confirmed they had been in contact
with university staff since June 1 last year - before the
man's complaint - about the institution's use of the
Council financial controller Maree Clarke said a timeline of
contact - released to the ODT after an official information
request - showed council staff had warned the residence could
face higher rates if found to be operating outside its
existing resource consent.
The university was ''non-rateable'' and only charged for
drainage, water and other services, but the residence was
supposed to be used primarily by university guests - not
offered on the open market.
Mrs Clarke said university staff had responded on June 20 by
changing a listing on the website, to show no availability,
and ''hoped this was sufficient proof that the residence is
not operating as a commercial activity''.
There was further contact after the Dunedin hotelier's
complaint in July, and the university sought a legal opinion
while considering a new resource consent for the residence,
When the Dunedin hotelier complained again in December,
council staff made contact again and were told the university
now had a new consent to operate as a public accommodation
provider, she said.
However, that meant the residence would face a ''large rates
increase'', but not until July 1 this year, as council staff
could not change rates partway through a financial year, she
The change would lift the rates bill for the residence from
about $9000 to $31,000 a year, Mrs Clarke said.
University senior communications adviser Jo Galer, responding
to detailed ODT questions, replied with a one-line statement
from chief operating officer John Patrick.
''The university has been discussing this matter with the
DCC, and is seeking a resolution that will be fair to Dunedin