Financial concerns over Wairakei

The viability of a planned 370-hectare township at Papamoa could be substantially improved if a new approach was taken to dealing with stormwater run-off issues.

Tauranga City Council has unveiled a new proposal to help kick-start the 8000-population Wairakei development after it learned this year that Wairakei was unlikely to get off the ground because of dismal financial projections.

Instead of a stormwater outfall into the Kaituna River being built many years later as part of the neighbouring Te Tumu development, the council agreed to investigate fast-tracking the outfall to accommodate Wairakei.

Earlier construction of the outfall would significantly reduce the amount of stormwater ponds needed for Wairakei.

"Financial analysis indicates that this would materially improve the overall financial viability of development in Wairakei," a report says.

The council was responding to being told in February that the development of Wairakei was, at best, a marginal financial proposition. It spurred the council to embark on a comprehensive review of how to make Wairakei more affordable to lower and middle-income families wanting to own their first home.

If a significant number of affordable owner-occupied or rental houses costing up to $400,000 were to be built in Wairakei, it would require a "concerted effort by developers, builders and the council", the February report said.

However, the downside of building the outfall earlier was that it could involve ratepayers contributing to the project - something not originally envisaged. A special working party of the council and Papamoa East developers and landowners has been formed to see if agreement can be reached on the earlier construction of the outfall costing $5 million plus land purchase costs.

The outfall, designed to take storm surges from the Wairakei Stream into the Kaituna River, was originally timetabled to be built once the much larger Te Tumu development went ahead - after Wairakei was largely sold.

Current planning for Wairakei was to use stormwater ponds to absorb the overflows from big storms. The latest report on the issue said some developers had taken the view that the cost of the project should be shared across the Papamoa, Wairakei and Te Tumu urban growth areas.

"If this is accepted, there will be a ratepayer cost because Papamoa (growth area) is now substantially developed.

"To minimise the potential ratepayer cost, the project would need to be incorporated into the Papamoa subdivision impact fees as soon as possible to allow cost recovery from the remaining development area," the report says.

How the costs were allocated for the stormwater outfall would have "significant implications" for how the landowners and developers in Te Tumu viewed the proposal to bring forward the project, the report says.

One of the authors of the report, the council's infrastructure planning manager Graeme Jelley, said it was a complex issue and before any changes of approach were finalised, it would come back to the council. The councillor members of the working group are Terry Molloy, Wayne Moultrie and David Stewart, with Mayor Stuart Crosby as an ex-officio member.