Developer 'being milked' by council

Murdoch Dryden says his tenants are struggling to cope with a soaring rates bill. Picture / Richard Robinson.

Murdoch Dryden feels as though he has been milked by the Auckland City Council. Nearly two years after completing a $3 million redevelopment of a derelict factory site in Glen Innes, the rates bill for his nine small business tenants has soared from $12,000 to about $60,000.

His largest tenant, a pet store, paid $12,000 in rates, which amounted to a lot of dog collars, Mr Dryden told Auckland City councillors last week during hearings on their long-term plan.

"The rates burden hurts these businesses' viability and opportunities to grow. It is a direct attack on small business," he said.

One of his tenants, a gym, needed 1000 members to break even. A year into business it had 600 members.

Tony Fraser, the owner of Four Season Pets, said his business seemed to be complying more with council and getting less from them.

"We are doing our own graffiti and rubbish ... it is getting harder and harder to run a small business," Mr Fraser said.

One of Mr Dryden's biggest gripes - repeatedly made by the business community - was the rating differential that meant businesses paid more than twice the amount of rates that households did.

The council is into the third year of a nine-year programme to progressively reduce commercial rates. At the end of this period, commercial ratepayers will pay $1.80 for every $1 paid by households.

Another message Mr Dryden had for the council was the practice of adding operating expenses to calculate business rates, which further increased business rates and widened the business-household differential.

Mr Dryden said the council should be offering rates relief and planning assistance to developers doing work that met council objectives for urban renewal in areas such as Glen Innes.

His family development company took a derelict, rat-infested and asbestos-ridden factory in Apirana Ave and turned it into a smart, modern commercial block occupied by a number of small businesses, including a cafe.

But instead of a helping hand, the Drydens found themselves being put through the hoops. The consent process stretched from the statutory 20 working days to 12 months at a cost of more than $200,000 and the pre-development rates bill rose from $12,000 to $52,000 ($60,000 this year).