Developers raise legal arguments

The finer points of the legal argument against a proposed new Dunedin City Council charge on developers began to emerge yesterday, the second day of hearings on the draft development contributions policy.

The discussion preceded what is expected to be a much more detailed airing of that issue on Monday, when the group set up to oppose the charge will send its legal representative to take on the council.

The policy has been vociferously opposed by developers and related industry groups, who claim it will kill development in Dunedin.

But, for the first time, the policy found a supporting submitter, when Save the Otago Peninsula (STOP) representative Lala Frazer argued opposition was coming from "vested interests" concerned the policy would "better reflect the reality of the cost of subdividing".

It was those issues, she said, that the Occupy Dunedin protesters in the Octagon were highlighting: "developers being subsidised by ratepayers".

Development contributions are charges paid by property developers to pay for infrastructure required by subdivisions, such as water and wastewater, roads and reserves.

Under proposed changes, developments placing additional demand on infrastructure could attract extra charges.

Some of the many arguments from submitters against the policy included that the low rate of growth in the city meant the policy was unjustified, and the costs were too high for developers or buyers to bear.

The council has argued it is looking for a fairer way to distribute the costs, and is shifting the costs from ratepayers.

For the Otago Chamber of Commerce, Barry Chamberlain concentrated much of his submission on the legal aspects.

Mr Chamberlain said, legally, the council could only charge for facilities that were required because of growth.

An example was the Forsyth Barr Stadium, which "absolutely" was not built to provide for population growth.

Another was the Waikouaiti Hall, which was not built to respond to more people in the area, or the Moana Pool extension, which was necessary because more people were swimming, not because of population growth.

He said the cost of the development contributions policy, including the money paid to fight it, was up to $400,000.

Chamber chief executive John Christie said it was keen to be part of a proposed working party to consider the policy.

Cr Lee Vandervis said the stadium had been sold on the argument it would attract 1000 more students, and asked Mr Chamberlain if development contributions could legally be charged for that growth.

Mr Chamberlain said that under the law contributions could only be charged for "spare capacity for growth".

"I don't believe the stadium passes that test."

Waikouaiti Coast Community Board chairman Gerard Collings said the board did not support the policy, which his submission said "will inhibit much-needed growth and development within our communities".

The proposed charge of up to $24,000 for a single residential subdivision in Waitati, for instance, was too high.

However, the board was not opposed to developers "paying the real and actual costs associated with their development".

Ms Frazer told the hearing STOP did not want a proliferation of unnecessary subdivisions across the rural outskirts of Dunedin.

"Interestingly, the same people who often argue strongly that `government', in inverted commas, should be cutting its costs, and that local body government should be reducing rates, are generally those who will come out most strongly against a user-pays charge such as this."

Lawyer Phil Page, for the Construction Industry and Developers' Association, will speak to the hearing on Monday.



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