CBD lobbyist has little sympathy for Westfield rates complaint

Alex Swney, chief executive of Heart of the City. Photo / APN

An Auckland inner-city advocate has hit back at mall owner Westfield over its rates rise complaints.

Alex Swney, chief executive of Heart of the City, said the irony of a suburban property owner carping about the rises from July 1 was inescapable because central business district (CBD) businesses had been rated on a different basis to the suburbs for years.

"At its height, our member businesses were paying twice the suburban business rate in the dollar," Swney said.

"Now, with the arrival of the Super City and rates equalisation that goes with it, suburban businesses - especially the malls - are complaining about the same level of rates that we have been paying for decades."

His comments follow Westfield's Justin Lynch presenting to Auckland Council last week about the rates bill soaring from $11.4 million to $16.9 million.

Swney said the old rating system worked against the interests of the city, encouraging sprawl by penalising CBD businesses in favour of greenfield developments on cheaper undeveloped land on an ever-expanding urban limit.

"This comparatively cheap real estate is part shopping centre and extensive ground level carparks - affordable to the point that in most instances mall developers can get away with ground level parking that they provide free to their customers," Swney said.

"What we have learnt from this rates hammering over the years is a hard lesson in the politics of funding a modern city. We can point to submissions over a decade old making the case for a wider funding net for local government," he said.

"Every international city we look to compete with has a much wider suite of funding tools to fund local infrastructure.

"We find it perverse that not only are we limited to rates but we hear murmurings from the Government that it is considering capping rates."

Lynch said Swney raised good points. "The council hasn't done enough to explore a range of funding alternatives, other than simply imposing unjustifiable increases on businesses," Lynch said.

"The council debt over the medium to long term is spiralling out of control and the council faces a huge challenge to balance the books."

Businesses should, and were, coming together to encourage the council to rethink the proposed rate increases, given the impact they would have on jobs and growth across the city, Lynch said.

"The random and disparate rate increases being faced by businesses across Auckland, including between central and suburban businesses, and, indeed, in the CBD itself, lend further weight to the very real concerns about the robustness of council's methodology and whether or not the business differential can in any way be justified," he said.

Commercial ratepayers across Auckland would say part of finding a sustainable funding path is in council providing robust methodology as to how they strike the rates.

"We all must encourage the council to adopt a robust rating and sustainable rating system.

"With respect to our submission Westfield's raised concerns over the unfair difference between water rates charges for business vs residential.

"Development contributions, which businesses like Westfield pay when investing in Auckland City and go toward funding the city's infrastructure, must be set at an affordable and realistic level to encourage further investment and growth in Auckland Super City."