Top property experts lead fight against council’s Unitary Plan proposal.
Owners of four luxury Auckland waterfront apartment blocks are fighting a land rezoning proposal which could drive them out of their places.
Bianca Tree, a lawyer specialising in resource management and environmental law at Heimsmath Alexander, is representing owners of nearly 400 units in landmark upmarket blocks The Point, The Parc, Latitude 37 and Viaduct Point in their battle against the change to rezone land from residential to commercial.
Those blocks form an enclave around the waterfront from the bottom of the CBD across the harbour to Lighter Quay.The apartments, often selling for millions, are the nation's most valuable due to their location.
Owners are united in their opposition to Auckland Council's Unitary Plan proposal which would see the exclusive residential zoning changed in favour of a new designation which could allow commercial uses.
That could lead to huge rent review changes because commercial buildings are far more valuable than residential and owners pay much higher leasehold fees.
But an Auckland Council spokesman said there was nowhere else in the city centre that had restrictions on mixing office and residential development within buildings, and enabling a wide range of commercial and residential activities created vibrant mixed use areas where people could live and work in locations that were well-served by public transport and a wide range of civic amenities.
Tree's submission to Auckland Council makes the owners' fears clear: "The predominance of residential activities in this area provides a distinct residential character and amenity compared to other areas of the Viaduct.
Apartments at The Point at Auckland's Viaduct. Photo / Getty Images
"The residential apartments have the desirable benefits of proximity to the city centre, restaurant and entertainment areas, the waterfront and public open spaces, while providing a relatively quiet inner city living environment.
"The high amenity values of this area have attracted many permanent residents, forming a stable community. The Viaduct area clearly benefits from a permanent residential population," the submission said.
"The body corporates are concerned that providing for unconstrained non-residential activities will displace residential use, change the character of the area, and make it less desirable for long-term permanent residents."
Body corporate chiefs from the blocks banded together when they realised the implications of the proposed change and how it could affect their annual leasehold ground rents.
A group of the country's most experienced and skilled property experts are on one side of the table: Paul Duffy, former general manager of Fletcher Properties and ex-chief executive of listed landlord DNZ Property Fund, is body corporate chairman of The Point which he was involved in building; Bruce Holdsworth is body corporate chairman of Latitude 37 which he also developed; John Mandeno is body corporate chairman of The Parc; and Graeme Horsley, one of New Zealand's most experienced property experts with more than 40 years' valuation and consultancy experience, is body corporate chairman of the Viaduct Point where he has a place.
"We've banded together to make a joint submission on the Unitary Plan. How the zoning on the land ends up results in potential changes to valuations," Horsley said.
Viaduct Harbour Holdings and associated interests own the land.
"We made a submission last year. We've been in mediation with Auckland Council. We're arguing we want the residential zoning," Horsley said.
Viaduct Point. Photo / Nicola Topping
Owners of the 80 units within Viaduct Point pay about $480,000 annually for their leasehold land fees, about $6000 each.
But the next seven-yearly rent review is pending in 2017. "It's not locked in," Horsley said.
"If it was commercial land ... well, land in Auckland has been selling for up to $15,000/sq m. We've tried to negotiate to freehold or do what Waterfront Auckland has done and go to 125-year leases but that hasn't succeeded," Horsley said.
The council's submission on the Viaduct land zoning is due early next month. An independent hearings panel is due to hear Unitary Plan submissions during May.
David Whitburn, Auckland Property Investors Association immediate past president, said the Viaduct area had New Zealand's best apartments.
"Leasehold situations are horrible around Cornwall Park and The Docks in Quay Park and the Princes Wharf apartments. So I don't like them because of the lack of control.
"But the Viaduct location is fantastic and with leasehold, commercial uses are often better for the sites," he said.
Retirees were in the worst financial situation to buy an apartment on leasehold land, he said.
Another property expert predicted apartments on leasehold land were doomed to be slums because of high fees which would eventually drive people out.
Four-block battle • The Parc: about 122 units, has a 3500sq m village green. • The Point: 77 units, 121 Customs St West, prestigious block behind Waitemata Plaza. • Latitude 37: about 90 units, Pakenham St, first big Viaduct block to have been built. • Viaduct Point: 80 units at 125 Customs St West with central landscaped green.
