$15m land buy halts subdivision

The Bay's two councils have bought a 171ha farm for $15 million to stop an unwanted subdivision destroying its potential as a future satellite city.
The Bell Rd farm in Papamoa East comprises nearly 20 per cent of the land down to the Kaituna River earmarked for development into a city of nearly 30,000 people, starting in 2021.
Faced with an impending 48-lot rural-residential subdivision, Tauranga City Council paid $10m and Western Bay of Plenty District Council $5m 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 comprising 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 start being developed once the adjoining 370ha Wairakei block nearer Mount Maunganui was 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 today 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 about the deal.
Tauranga City chief executive Stephen Town said the land comprised the middle piece of Te Tumu. The motivation was to make sure that a 48-lot rural-residential subdivision consent held by the joint venture was not implemented.
It covered part of the farm. Mr 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 it could have led to more rural-residential planning applications being received and potentially granted.
"We did not want to see long-term land use aims compromised," Mr Town said.
The council was also worried about the debt implications of trying to install infrastructure to the rural-resident subdivisions before it had the development contributions and growth to fund it.
He stressed the councils had not purchased the development rights to the land. The actual value of the land to a developer was between $50m and $90m.
"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 could go pear shaped and leave councils 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 as they saw fit.
"We think it is a pretty smart strategic purchase."
Asked if some of the land could stay in council ownership as public reserves, Mr Town said the development framework for Te Tumu had not been done so the councils had not identified the right places to buy land for reserves.
Agreeing that the councils were only buying the land to protect its development potential, he said the interest and administrative costs in the interim were met by the vendor. The impact on Tauranga was that the purchase used $10m of the amount the council had projected it could borrow.