Developers slam Western Bay costs

PROPERTY developers say the Western Bay is being "left behind" because of its costly development fees while Tauranga surges ahead.

Figures released to the Bay of Plenty Times show the total value of building activity in the Western Bay for 2013/14 was $110,538 million up from $103,146 million the previous year - an increase of 7.1 per cent although there were 27 fewer residential properties built.

Tauranga City Council experienced a construction boom over the same period with $457,214 million generated up from $360,311 million - an increase of 26.9 per cent with 207 more residential homes built.

Western Bay District Council was to examine costs to see if they could be trimmed to stimulate building activity.

Durham Property Investment director Phillip Palmer said some sections on its Lynley Park project at Omokoroa were only "borderline viable" because of costs.

It had sold 150 sections with another 150 to go, he said.

"Development costs are expensive and made up a higher-than-expected component of our overall development costs."

An invoice showed fees per section included $10,292 for waste water, $15,042 roading, $5297 water supply, $3755 stormwater and an ecological fee of $501 - total cost $34,887. There was also a reserve fund contribution 5.01 per cent of the section sale price with a cap of $255,000 that could equate to another $12,750.

"The fees have gone up for waste water and for roading, all these fees have continued to rise ... it's not cheap," Mr Palmer said.

The cost was putting off developers, he said.

CBC Construction director Peter Cooney said high council fees and unaffordable land made the Western Bay cost prohibitive and Tauranga more attractive.

Development contributions were often more than $30,000 in the Western Bay but council had the ability to re-zone land and look at fees, he said.

"By the time you pay for your land and high council contribution fees which includes infrastructure it makes it hard.

"Council have got their blinkers on if they think they have got affordable options, they haven't and it needs to be more proactive in that department."

Western Bay of Plenty District Council mayor Ross Paterson said development in the cities was starting to increase while provincial towns were still waiting for that growth.

The council was looking at restructuring its zones that drive costs in an attempt to achieve a lower financial contribution for developers. It was working with the Government on the Housing Accord, he said.

"We want to make certain that what we have got, we need and we haven't got a Rolls Royce."

Developments at Omokoroa and the Rangiuru Business Park in Te Puke and other areas were being looked at with the aim of reducing financial contributions and making it easier on developers, he said.

However, council could not control land prices, he said.

The council had policies in place that allowed developers the opportunity to pay off financial contributions when cash flows allowed, he said.

Consents manager Chris Watt confirmed that financial contributions in the Western Bay were in the order of $30,000 for an urbanised section.