Childcare businessman gets $100,000 bill for creating 20 new jobs

Alan Lints is being asked to pay more than $100,000 towards council infrastructure. Photo / Michael Cunningham

He wants to create 20 new jobs, the council wants him to pay more than $100,000 for the privilege.

Businessman Alan Lints said there is something wrong with this picture and wants Whangarei District Council to reconsider its development contributions policy, which he said could put people off setting up businesses in the district.

Development contributions, introduced to Whangarei in 2005, help cover the infrastructure costs impacted by growth, including roading, wastewater and water reticulation.

WDC spokesman Paul Dell said development contributions were introduced at the behest of the community.

"The call came from many communities who said: we are experiencing major growth and we don't see why us as ratepayers should have to pay the costs of all that growth."

Northland Chamber of Commerce chief executive Tony Collins said council could consider a moratorium on development contributions.

"It's the only way we could tell if they are a barrier to business growth," he said.

Mr Lints is in the midst of building an Educare childcare centre at Tikipunga's Totara Parklands development, which would employ up to 20 staff and would include a cafe. Halfway through the build, he opened a bill of $105,000 from the council for development contributions.

"This has been quite a killer. We want to create jobs and the biggest handbrake has been the council contributions," Mr Lints said.

Mr Lints owned eight childcare centres in Whangarei, one on the Kapiti Coast, one in Waikato, and was looking to set up another under Hauraki District Council. He said development contributions under other councils were negligible or non-existent.

"You want more people to invest in Northland, you can't have it both ways," he said.

Mr Dell said the council projected collecting about $30 million in development contributions over the next 20 years, which would cover "not all, but a reasonable proportion of growth".

"If you look at the growing areas - for example, Tauranga, Hamilton - they all have development contributions. There are a lot that don't have development contributions and those areas don't have growth."

Mr Lints said while he accepted new businesses put strain on infrastructure, more jobs led to more ratepayers, which naturally balanced increased maintenance costs.

Mr Collins said the issue of development contributions was a bone of contention for business.

"It's not the contributions per se, it's the amount they have to pay and the lack of transparency. If you go on website and tick boxes it might say you have to pay x-amount. But when you go through process with staff, it's often less than the first draft. But that first amount could be enough to put people off.

"We are competing with other centres and, if it's cheaper and easier to do it in another district, then business people will do that."

Subdivisions, new commercial buildings, second dwellings and any other activity that impacts council infrastructure could potentially be liable for development contributions.