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One of two bids to subdivide rural parts of Outram has been rejected by the Dunedin City Council's hearings committee.
Balmoral Developments (Outram) Ltd, together with two adjoining landowners, had sought a private plan change to rezone 6.7ha of rural land for residential use.
The change would have allowed them to develop 24 new homes on the land, located at the township's edge, but ran into opposition from neighbours and other submitters at a public hearing in February.
In a written decision released this week, the council's hearings committee - chaired by Cr Colin Weatherall - rejected the application, saying it would not be the most efficient use of natural and physical resources.
In particular, the committee worried the plan change would allow the spread of residential development into rural areas.
The subdivision would create a ''relatively small'' number of new homes, but at the expense of productive high-class soils on the site, which was formerly the home of a market garden.
There was also ''no evidence of clear demand'' for the subdivision in Outram, when other sections - both within Outram and elsewhere in Dunedin - were already zoned and remained available for development, it said.
The development would also mean a loss of rural ambience for neighbours, as well as for the approaches to Outram from Mosgiel, and would ''in all likelihood'' require an upgrade of the council's reticulated water infrastructure.
Allowing it to proceed would be against the council's district and spatial plans, and was ''contrary to good planning principles'' and threatened to undermine the plans, the committee concluded.
Cr Weatherall and committee members Cr Andrew Noone, Kate Wilson and Jinty MacTavish visited the site during the hearing process, and had been ''struck ... [by] how productive the site appeared to be'', the decision said.
The developers' counsel, Phil Page, had argued the high-class soils would not be lost, as homeowners could make use of them on a ''hobby scale'', but also that any loss would be small in the scheme of things.
The committee disagreed, saying it did not consider the argument ''justification for loss of this area, as all losses are cumulative''.
Together with the availability of land elsewhere and the lack of proven strong demand for the Outram subdivision, the committee concluded there was ''insufficient justification for the loss of this land to productive uses''.
The committee was also concerned the subdivision was designed with commuters to Mosgiel and Dunedin in mind.
The site also faced risks from three natural hazards - flooding, liquefaction and ''piping'', which could cause failure of the stopbank protecting the site from the nearby Taieri River.
Piping could occur when water on one side of an embankment was higher than on the other, causing water to seep under the floodbank towards the lower side.
The committee had heard evidence those risks could be mitigated, but remained concerned ''piping'' could result in a ''catastrophic'' failure of the stopbank, the decision said.
Companies Office records showed Balmoral Developments (Outram) Ltd is headed by directors Cathrine and Neville Ferguson, of Omarama, who own about 6.3ha of their subject site. The rest of the 6.7ha site is owned by Roger and Michelle Capil, who had joined the company's plan change bid.
Mr and Mrs Ferguson could not be contacted yesterday and Mrs Capil said the bid had been handled by them.
The committee's decision was the first of two awaited by developers wanting to subdivide rural land on the outskirts of Outram.
Two Note Ltd - headed by Gordon Mockford, of Christchurch - was the first to seek a private plan change, which would allow 7.7ha of rural land in Formby St to be rezoned for 28 new homes.
Mr Mockford's plans were considered by the hearings committee in November last year, but a decision has yet to be released. It is understood Mr Mockford has family links to Outram.