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Highlands Motorsport Park near Cromwell needs to upgrade a Cromwell water main to continue its development and the Central Otago District Council has decided to share the cost.
The water mains in Cemetery and McNulty Rds needed to be upgraded and were ''inadequate to cope with future development in the area'', council development engineer Peter Morton saidLand in the area is zoned for development, for which Highlands has consent, but current infrastructure cannot service it.
A 2013 consent issued to the park allowed it to subdivide and create 47 allotments but also required it to upgrade and extend the town water supply to provide adequate firefighting capability.
A proposal from the motorsport park said the upgrade would service other as yet undeveloped land and, based on land area, it asked the council to fund 50% of the cost to upgrade the Cemetery Rd mains and 75% for the McNulty Rd mains.
That would cost the council an estimated $92,500.
''Future growth is likely to identify other network capacity constraints thus this will not signal the end of required upgrades. However, it would address a constraint that is known now and which is currently limiting growth options,'' Mr Morton said.
Councillors agreed to cost sharing and resolved to recover costs through development contributions from future developers who would benefit, preferring that option over financial contributions.
Council chief executive Phil Melhopt and Mr Morton both said there was a risk to opting for financial contributions because there was a 10-year time limit on them.
If the land was developed beyond that time, no financial contribution could be sought.
Deputy mayor and Cromwell Community Board chairman Neil Gillespie said there was ''more certainty in my view that we'll get money back through development contributions''.
Central Otago Mayor Tony Lepper did not initially agree, saying opting for future development contributions would mean ''if I develop a piece of land next to this [Highlands], then I get a freebie''.
The council's long-term plan had budgeted more than $232,000 in the 2016-17 financial year to service new connections, but some of that will be brought forward to the 2014-15 year.