He recommends a change to the way rates are collected to discourage land-bankers.
"With a rating system based on capital value, those properties that have no or little improvements are enjoying relatively low rates compared to their high-rise neighbours. So plenty of landowners can easily stomach the holding costs, because the end capital gain will more than cover it. Maybe our decision-makers need to look at ways on how Auckland Council could rate these sites on their actual improvement potential, rather than merely on their unimproved value which is relatively light if it's an empty site," Kellow said. But plans are in place for both sites.
In February, Auckland Mayor Len Brown announced resource consent had been granted for a 209m tower on the Royal site and China's NDG is to build that. The tower is to have shops and apartments and perhaps a Ritz Carlton hotel.
Brown said it would be only 119m shorter than the Sky Tower and the target for building consent was 2015, meaning the soaring shard could be completed by 2020.
In May, Ludo Campbell-Reid, Auckland Council's design champion and environmental strategy and policy department manager, said his organisation had been in touch with the team from Chinese-headquartered NDG.
Plans are also for the ex-Star site to have an office tower developed.
Brown's spokesman said the city's construction market was booming, despite one big question mark.
"One of the biggest obstacles to the further development of the city centre at the moment is the lack of certainty for developers over timing of the City Rail Link.
"However, the record number of cranes on construction sites across Auckland suggest vacant commercial sites are not a significant issue at this time," he said.
Chris Dibble, national research manager at Colliers International, said land-banking was not a major issue. "Large vacant commercial land in the Auckland CBD that is being land-banked represents less than 5 per cent of the total size."
But even the few vacant sites only reflected a gap between rental income and the ever-growing costs to develop.
"Incentives for current owners to develop - rather than forcible measures for them to sell to developers - could be explored. These might take the form of reduced development contributions, for example. Auckland needs to become a truly international city with businesses that can afford the rents for these sites to make development more attractive.
"The parameters surrounding a fine for not developing land for a certain period of time would need to be carefully considered. What constitutes development and who would monitor it?" Dibble said.
The Royal and ex-Star sites might be thought of as vacant but had been used for many years as car parks and for retail purposes.
"There is also publicly expressed intent to develop the sites. Does this constitute as development? According to The Britomart Story recently released, only two-thirds is completed after 10-years of works, instead of the five years intended. Should Britomart be fined? As the project has been considered a significant regeneration success providing jobs and revenue, it would be ill-advised. Wynyard Quarter's regeneration success could be seen as another example.
"Fining land owners for not using the land would discourage many prospective purchasers from ever trying to own it and develop it, leaving current owners forced to sell at less than market value," Dibble said.
