It's a classic clash between urban growth and farmers.

Katikati's population has grown from 3000 to 4500 in just 15 years, and one of the best places for new development is northeast towards the coast.

Water pipes are in place, the land is mostly flat, and the area is sandwiched by Park and Beach Rds radiating from the town's centre.

The problem is, 50ha of that land is owned by Remuera farmers who simply don't want to sell - even for big bucks. One estimate put the land's value at $60 million if subdivided.


"I'm guessing it's about 20 per cent of Katikati," deputy mayor Mike Williams said, when asked about the size of the farm. "It's blocking the town from expanding into a logical area."

According to Bay of Plenty Times enquiries, the land was bought more than 40 years ago by a South African who placed it in a family trust.

The farm now belongs to two sons living in Auckland who have not responded to a request for an interview.

They have rejected several lucrative offers from developers, preferring to lease it to sharemilkers who are enjoying a unique mix of urban and rural living.

"It's the best lifestyle," said property resident Jodie Troy. "We're farming in the middle of town. Who else can say that?"

Katikati has grown around the farm, and the sharemilkers estimate they have 60 neighbours.

Ms Troy said the farm had 140 cows, a 12-a-side milking shed and two houses, one of which was privately tenanted. Primary school children visited the farm, and cars stopped beside the road when cows were giving birth.

The Western Bay of Plenty District Council has zoned the land as residential, but the rates are thought to be manageable for the owners because most of the farm is in one block. This means that it is rated on a lower value than if it were divided into residential sections.


With the farm land unavailable, the council is looking to develop 100ha in the opposite direction, along Busby and Henry Rds to the west of town.

The cost of developing this land will be unknown until a $36,400 feasibility study is finished in late February, but Mr Williams and the council's resource management manager, Phillip Martelli, agreed that it would run to millions of dollars.

The study was meant to have taken place after 2021 but was brought forward to meet population growth.

Mr Martelli said the study would determine how much of the land could be developed, how many houses could be accommodated, the cost of infrastructure, and whether or not it was economically feasible to develop the area.