Controversial Paihia waterfront development canned as costs blow out

Once Paihia's main swimming spot, today little more than a rock wall remains at eroded Horotutu Beach. Photo / Peter de Graaf

A controversial multi-million-dollar project to restore a vanished Paihia beach and build a sea wall to protect the town from storms is dead in the water.

The almost $14 million plan had divided the Paihia community, with some strongly opposed for environmental, cultural and aesthetic reasons. Others argued that the breakwaters were needed to protect the town's waterfront from storms that were expected to grow in intensity due to climate change.

The Government had committed $8m for the breakwaters through the Provincial Growth Fund (PGF), now known as Kānoa, while the Far North District Council had pledged $5.84m for shore-based elements of the project such as the restoration of Horotutu Beach and the creation of new waterfront recreation areas.

In an unusually succinct statement the council said it had accepted advice that the plan, which had been managed by its commercial arm, Far North Holdings (FNH), was unaffordable due to rapidly escalating construction costs.

The decision to end the project was made during an extraordinary council meeting in Kaikohe on Wednesday.

Mayor John Carter also asked staff to report back on potential coastal projects across the Far North that the council's $5.84m share of the funding could be spent on instead.

The $8m of government funding had been earmarked specifically for the Paihia waterfront development and would no longer be available.

Carter also asked staff to arrange a public meeting in Paihia so that the council could meet residents, mana whenua, and business and community leaders to hear their views on alternative projects.

The Paihia waterfront redevelopment plan included a series of breakwaters and restoration of Horotutu Beach. Image / Far North Holdings

Business owner Grant Harnish said the decision was gutting for most people in Paihia.

"It's very disappointing to see that amount of money disappear from our town."

The loss of $8 in government funding was particularly galling — especially at a time when investment was sorely needed.

"The chances of ever seeing it back again are extremely slim," Harnish said.

Bay Bush Action trustee Brad Windust and Margaret Taituha of Waitangi hand a petition against the proposed Paihia sea wall to district councillor Kelly Stratford. Photo / Peter de Graaf

Conservationist Brad Windust, however, said it was "a big win" for the environment.

Cost had been given as the reason for backing out but he suspected councillors realised the community had no appetite for it.

"The right way to come up with a climate change mitigation plan is to start at the marae and make sure everyone has their say. That way you get the best decisions," he said.

Former Regional Development Minister Shane Jones announces $8m in government funding for Paihia's waterfront redevelopment in 2020. Photo / Peter de Graaf

Former Regional Economic Development Minister Shane Jones, who announced the project's revival in 2020, was disappointed.

"The problems it was designed to solve haven't gone away," he said.

"It's clear that cost escalation and alterations to the original consent hampered the development, but this is not a time for finger-pointing. I have no doubt the project will rear its head again in the future."

Paihia resident Jane Banfield, who had called for Wednesday's meeting to be held in public, said she was relieved because the project had caused much division. She wasn't celebrating, however.

"I feel desperately sad about the complete waste of everybody's time, money and energy. We could have had something really good that worked for everyone if the community had been involved from the start."

Banfield hoped it was a turning point for other projects managed by FNH, such as a proposed housing development at Puketiti, in Ōpua, and a stalled reclamation at Rangitane in Kerikeri Inlet.

It's the second time the Paihia Waterfront Redevelopment has been canned in its convoluted, decades-long history.

When announced in 2006 after years of consultation it was to have included breakwaters, a 4000sq m reclamation, new commercial buildings and a promenade.

With a price tag of $20m it would have been the biggest maritime project ever seen in the Far North.

Consents were granted in 2009 but only after changes to the design such as altering the breakwaters so that they didn't touch Motumaire, an island wāhi tapu.

The project was scrapped in 2010 as FNH cut costs in the wake of the Great Financial Crisis.

A scaled-back version was revived in 2020 as the Government poured PGF money into "shovel-ready" projects to boost the economy during the Covid pandemic.

In an interview with the Advocate in April, Regional and Economic Development Minister Stuart Nash hinted that the Government's enthusiasm was waning for PGF projects that were delayed or had divided communities.