Council looks at industrial potential of commercial property near Kaikohe

The proposed industrial park, if it becomes reality, will be built on what is now a dairy farm on the northern side of SH12 at Ngawha.

The Far North District Council is asking for community feedback as it investigates the creation of an industrial park near Kaikohe which could take advantage of Top Energy's geothermal power generation plant expansion, and low-cost electricity and heat.

The council is considering investing an extra $6 million in its commercial subsidiary, Far North Holdings Ltd, to allow it to buy a site and develop the park near the Ngawha plant.

That would lift its investment in FNHL to $19 million, which it would fund by increasing its current perpetual loan, where only interest is paid, and would be covered by FNHL.

Deputy Mayor Tania McInnes said that would reduce the risk to ratepayers, and meant that the investment would be unlikely to have any impact on rates. It would also increase FNHL's equity, enabling it to further invest in projects elsewhere throughout the district, thereby returning higher dividends to the council, and so help keep rates down.

Cr McInnes said the opportunity had real potential, and could be a "game-changer" for the Far North.

The vision was that the industrial park would attract energy-intensive businesses and industries, and those that could benefit from by-products such as heat, taking advantage of low energy prices by clustering together next to the expanding Ngawha geothermal power plant.

The exact price of energy would be negotiated with Top Energy.

"There is a wide range of industries that would benefit from the development, including sawmills, dairy factories, data processing sites and warehousing," she said.

"The project also aligns with the district's vision He Whenua Rangatira (A District of Sustainable Prosperity and Well-being), our community outcomes and regional economic strategies and plans."

To date, no private investors had been secured for the project, but the council and FNHL believed businesses can be encouraged to locate to the industrial park given the right commercial environment.

"Investors generally require some certainty before moving to a new development such as this," she added.

"The site would be developed to be more attractive, with appropriate resource and building consents being secured, followed by formal marketing."

If the proposal did not proceed, FNHL could sell the site to recover the cost of buying it. Council approval would be required for any such transaction over the next 10 years, to enable it to protect its investment.

The council was inviting community feedback (until February 16), Cr McInnes saying those responses, legal and tax advice, and due diligence outcomes, would be considered before making a decision in March.

If the council decided to proceed FNHL would buy the site by the end of March. It expected to complete design, market testing and consenting of the industrial park in two to three years.

More information is available at www.fndc.govt.nz/fnhl2018 or at any council service centre.