KEY POINTS:
Two councils have bought a 171ha farm for $15 million to stop an unwanted subdivision destroying its potential as a future satellite city in a fast-growing area of the Bay of Plenty.
The Bell Rd farm in Papamoa East constitutes nearly 20 per cent of the land, down to the Kaituna River, earmarked for development into a city of 30,000 people, starting in 2021.
Faced with an impending 48-lot rural-residential subdivision, Tauranga City Council paid $10 million and Western Bay of Plenty District Council $5 million to secure rights over the land for the next 10 years.
It was sold by a joint venture of Totara Farm Park and Red Corner Ltd, made up of the original farming family, the Hicksons, and the family of Bethlehem property developer Paul Adams, who owns the development company Carrus Corporation.
The Carrus/Hickson block is part of the 765ha of land called the Te Tumu block that will be developed once the adjoining 370ha Wairakei block nearer Mt Maunganui is close to full.
The Bay of Plenty Times was alerted to the purchase in a letter which Tauranga barrister Kate Barry-Piceno intends to use in submissions to a reconvened planning hearing to rezone the Wairakei block. Her reference to the purchase last year has forced the two councils into the open.
Tauranga City chief executive Stephen Town said that if the approved subdivision had gone ahead, it would have resulted in "very unhelpful" land development when it came to urbanising Te Tumu and "we did not want to see long-term land use aims compromised".
The council was also worried about the debt aspect of trying to install infrastructure to the rural-resident subdivisions before it had the development contributions and growth to fund it.
He emphasised that the councils had not bought development rights to the land. The actual value of the land to a developer was between $50 million and $90 million.
"We have bought it for 10 years. In 2016, the vendors have a right to re-purchase the land."
Mr Town said a formula had been worked out to ensure there was no argument or risk to future councils that negotiations would leave them out of pocket. "It is effectively a no-cost transaction for the two councils."
The joint venture held rights to re-purchase the land for 10 years after 2016.
If the re-purchase option was not exercised by 2026, the councils were free to dispose of the land.
- Bay of Plenty Times