Developers take on council

Two Environment Court rulings on developers' reserve contributions have pointed the way for a planning change on how properties are levied, says an Auckland barrister.

Richard Brabant represented three developers in two cases against Auckland City, on which rulings were issued this month.

Apartment developers Symphony Group, Hemisphere Properties and Retro Developments all had their reserve contributions cut, meaning they will pay the council much less than they were asked for.

Brabant said the Symphony ruling would cut the developer's reserve contributions on The Parc in the Viaduct Basin by about $250,000.

"This has set a new standard for fairness for apartment developments," Brabant said of the three cases. "The city should revise its reserve contributions in the CBD."

Brabant pointed to Judge Laurie Newhook's ruling in the Retro and Hemisphere case of "an apparently incongruous situation" between charging developers on the Auckland isthmus a higher fee than developers in the CBD.

One isthmus project where 138 units were being built for $25 million had resulted in the developer being levied $3.9 million. Yet if that same project was to be built in the CBD, the developer would only be liable to pay $250,000 in reserve contributions, or 1 per cent of total development costs.

"We need to find a mid-point between the two," Brabant said. "One fee is too low and the other is way too high. The council will end up with at least as much, if not more, money if everyone paid a fair amount."

Apartment developers have lodged 12 court actions against Auckland City reserve contributions.

Veena Krishna, Auckland City's appeals manager, said the number of challenges to payments for properties outside the CBD was higher than usual.

She said the council was negotiating with some of the developers. Others had yet to go to court.

"On average, we get about seven appeals a year," Krishna said, adding that since the latest district plan came into force in 1999, the council had received about 30 appeals.

The council was collecting about $17 million a year in reserve contributions from developers, but Krishna refused to say how much was sought, or how much it was losing through litigation.

"The appellants want to pay a lesser amount than that imposed by the council as a condition of the resource consent. Among other things, they want to be able to pay at the project's completion, when a code compliance certificate is issued or when the property is occupied." she said.

"They want the council to have regard to the number of one-, two- and three-bedroom units when considering the demand for green area and reserves generated by residents. They also want the council to give deductions for on-site recreational amenities within the development.

"But less than 1 per cent of about 5000 resource consents processed on average in a year have been appealed."

Change of plan

* Developers are winning court challenges against Auckland City reserve contributions.
* One barrister is calling for a rule change so the payment demands are more uniform.
* The council gets about $17 million a year from the payments.
* But developers are taking more challenges against the council.