Proposed plan hits property owners hard

The Wairau Valley's Light Industry zoning under the PAUP is designed to stop any more "big box" retailers such as Pak'nSave, Mitre10 MEGA and Bunnings.

Long established areas accommodating a mix of business uses on the North Shore could be put back 50 years if the Proposed Auckland Unitary Plan (PAUP) is approved in its current form, according to a group of property and planning professionals.

North Shore areas like the Wairau Valley and along Barrys Point Road are currently zoned Business 9 allowing for a wide range of commercial and industrial uses. But the plan proposes rezoning these properties Light Industrial - alarming property owners concerned about the impact this could have on the values and future use of their properties.

Daryl Devereux director of Bayleys North Shore Commercial says the change of zoning isn't just an issue for the North Shore but affects many former predominantly industrial areas throughout Auckland that have gradually transitioned into a mix of commercial activities but will be "down zoned" under the PAUP to Light Industrial.

"It will curtail any future retail or office developments in these areas by making them non- complying activities. In our view, this will be to the detriment of the diverse and colourful commercial communities that have evolved over the last 50 years in these types of precincts right across Auckland.

"Many owners aren't aware of the proposed change and the impact that it will have on their properties and certainly that was the case here on the Shore until we brought it to the attention of landlords. Now they have woken up to what is going on, they have banded together in an effort to do something about it."

Bayleys North Shore Commercial has coordinated the formation of action groups of Wairau Valley and Barrys Point Road property owners. Planning specialists SFH Consultants Limited, property economist Urban Economics Ltd and solicitors Glaister Ennor have been contracted to undertake submissions on their behalf.

Stephen Havill, director of SFH Consultants, says the Regional Policy Statement objectives and policies in the PAUP clearly signal that the council wants to confine most new retail and office development to the PAUP's five "Centre" zones - the CBD, Metropolitan, Town, Local and Neighbourhood Centre zones.

"The larger institutional retail property owners and their advisers have done an effective job convincing council planners that a centres-based approach as favoured in the UK is also best for Auckland. This protects those owners' investments in metropolitan centres such as Takapuna and Albany but penalises retailers who can't afford the rentals they are charging and have consequently gravitated to places like Barrys Point Road and the Wairau Valley.

We don't think the UK approach is appropriate for New Zealand which is a very different market. It will constrain competition, make it difficult for start up businesses to find affordable premises, deprive consumers of choice and push the cost of goods up."
Havill says the apparent purpose of applying the proposed Light Industry zone to current Business 9 zoned areas, for example, is to prohibit any additional retail and office activity in order to redirect it to Centre zones.

"The Light Industry zoning would not immediately threaten any retail or office leases that are in place but it may be a different story when a tenant vacates or owners want to further develop or sell their property, especially if there is no resource consent for the existing use.

Our planning consultants are finding that around 40 per cent of all landlords we are dealing with in the Wairau Valley don't have premises with a resource consent.
"These property owners, in particular, should be very concerned about the proposed change of zoning because it means their premises may have to revert back to solely industrial usage at some stage. Even owners with consents in place are not completely protected as that consent may lapse if their premises are vacant for a prolonged period of time. "

Devereux says council planners also don't appear to have taken account of the fact that land prices in many Business 9 zoned areas have moved well beyond the point where industrial development is feasible.

Land contour, narrow driveways and lack of flat yard space for containers makes Barrys Point a "most unlikely" industrial area.

"The council only has to look at its own Capital Valuations released late last year to discover that. The land component of valuations in Barrys Point Road ranged from $671 per sq m to $1360 per sq m and we're generally finding sales are currently being made at the top end of this range for Business 9 zoned properties. Based on current rental levels, land needs to be priced at around $550 per sq m to $650 sq m for a light industrial development to stack up.

"This means land prices in these areas would have to undergo a significant correction before any further development is viable. That would devalue the property portfolios of thousands of property owners across Auckland and this would obviously have an impact on the council's rate take. So it doesn't make much planning sense and it makes no economic sense either."

Devereux says the PAUP also appears to have taken a "desktop" planning approach with no cognisance given to the physical constraints posed by areas like Barrys Point Road.
"The contour of the land, narrow driveways and lack of flat yard space for containers makes it a most unlikely industrial area. While some of the properties there have an industrial element to them like a surfboard outlet with repair facilities, furniture restorers, and auto and yachting related companies, the primary purpose of most is to sell goods.

A lot of the occupants are entrepreneurial owner operators and their ability to expand their businesses in their current premises will be constrained by the proposed zoning."
Adam Thompson, principal of Urban Economics Ltd, says Barry's Point Road is distinctive because its focus is on recreational goods and services. "Under the PAUP, this type of retailing would not be a permitted use, raising the question of whether this niche centre would be able to continue."

Thompson says Barrys Point Road presently has around 9000 sq m of retail floor space, making it the 12th largest centre on the North Shore out of a total of 45 retail centres and comparable in size to local centres such as Devonport and Northcote.

He says the Wairau Valley's Business 9 zoned precinct currently has about 60,000 sq m of retail floor space. Combined with 40,000 sq m in the adjoining Link Drive precinct ,which is currently also zoned Business 9 and will be rezoned General Business under the PAUP, the two precincts comprise one quarter of all retail on the North Shore. It is also the largest employment hub for the North Shore with around 15,000 employees.

"Given the scale and diversity of this precinct, it is difficult to imagine how a shift back towards light industry would benefit the community, especially given the large new industrial centres planned in Hobsonville and Silverdale which are likely to be very attractive and affordable for industrial firms."

Thompson says the initial focus of representations to The Auckland Unitary Plan Independent Hearings Panel has been on challenging the council's assertion that there is sufficient land allocation within the PAUP zonings to accommodate future growth to meet the market demand for retail and office space.

He says his analysis suggests the most logical PAUP zoning for Barrys Point Road would be Mixed Use, while Wairau Valley would be better suited to a General Business zoning, bringing it in line with Link Drive. "In both these zones, retail and office are discretionary activities and this would enable them to continue to provide for these types of businesses that cannot find suitable, affordable premises in the main centres such as Takapuna or Albany."

Daryl Devereux Bayleys (left), and Stephen Havill, SFH Consultants director (right).