Clarkson blasts Bay's high development fees

By Graham Skellern
Speedway owner Bob Clarkson is paying more than $600,000 in development fees for his latest commercial buildings on land he leases at Tauranga Airport - an amount he says is "ridiculous".
Mr Clarkson's building gang has erected the steel frame for a general storage facility, or truck depot, that will be bigger than the nearby Bunnings Warehouse in Jean Batten Drive. The new building, seen from Hewletts Rd, is a massive 11,200sq m in size, with a height of 10m - three metres higher than Bunnings.
Mr Clarkson, the Tauranga MP, said two tenants would be moving in, with one taking up two-thirds of the space. He would not name them because they had not yet signed the lease.
He said the building - the largest he has built in Tauranga - would be used for storing all sorts of goods and he hoped it would be finished by the end of May.
Mr Clarkson's gang is also three-quarters of the way through building the 5500sq m Steel and Tube Industrial Supplies outlet in Jean Batten Drive.
He also has plans to erect a 1300sq m building for "a manufacturing outfit" next door.
Together the three buildings will cost $623,000 in development fees. "It's ridiculous, these sorts of charges are going to kill industry in the town," Mr Clarkson said.
He thought he would be paying $780,000 in fees for the big truck depot alongside Bunnings but Tauranga City Council put a cap on building size at 6000sq m - and Mr Clarkson is paying $366,000.
He said he lost one prospective tenant, from Australia, after he initially told them they would have to pay an extra $78,000, or 10 per cent, in annual rent. "Adding $36,000 in rent each year is not quite so bad - and the main tenant is a different guy," Mr Clarkson said.
"There will only be six people working in the building and they only need two toilets and an office - yet we have to pay for the downstream sewerage.
"The place is already subdivided, the pipes are already there and sewerage goes to Bunnings. I can't fathom the charges. It's a different story if it's a totally new subdivision," Mr Clarkson said.
He leased more than 7ha of commercial-zoned airport land and he said it was virtually taken up.
"There's not enough industrial land to go around in the city - particularly freehold big blocks," Mr Clarkson said.
"We are building as fast as we can and we can get more tenants. They want to move in to bigger buildings - from a present 2000sq m to 7000sq m - and expand their businesses. They are not panicking yet but they will in two years.
"We've got to keep costs down and encourage the industry to grow. We need to open the place up and let it hum," he said.
Tauranga City Council chief executive Stephen Town said he didn't believe the present level of fees was killing business - borne out by the amount of development going on.
"There's no perfect system and it's an awkward line to walk. Developers have given stern feedback about the level of fees they believe would affect business ... we are mindful of that and will keep monitoring the rate of building consents to see if anything has changed.
"When you go from zero impact fees three or four years ago to paying something in the hundreds of dollars, it's a lot of money but it's not revenue raising for the sake of it."
Mr Town said the development fees supported the investment in infrastructure - "if we don't pick up the revenue from a building then it has to come from the ratepayer. We are trying to get a balance in the overall general ratepayer contribution."
Mr Town said on February 26 councillors would consider adjusting the building impact fee for commercial floor space under 100sq m. - "the developers do consider that fee to be unreasonable".