Developers fear zone plan would cost them millions

Waikato property developers are lining up to fight Hamilton City Council over a proposed change they say would make it virtually impossible to build large retail and office developments outside the city's CBD.

The council has proposed a variation to its district plan which Mayor Bob Simcock said would make the city's flagging CBD a more attractive prospect and maintain it as its commercial centre.

But developers have sought legal advice, saying this would cost them millions of dollars and slash their land values.

Variation 21 proposes a commercial services zone which rings the CBD where developers would be allowed to put big-box retailing offices.

But office space outside this zone and over 250sq m, or retail over 150sq m, would be deemed non-compliant and would require resource consent.

The council has also included a clause which allows just one tenancy per site, regardless of the section size.

Mr Simcock said the variation was largely in response to concern about the district plan, which he said was "probably the most liberal in the country".

"It allows most things to happen in most places and I think Hamiltonians have been starting to experience some of the disadvantages both in the residential and commercial property areas."

He said the variation would prevent smaller boutique retail stores being lured from the city centre. It would also stop wastage on unplanned infrastructure and would ensure there was enough appropriately priced land available for new industry and employment.

But Tainui Group Holdings chief executive Mike Pohio said the proposed change was a "kneejerk" reaction which would make it virtually impossible to get industrial areas rezoned for retail or office development.

TGH has invested $100 million at The Base in Te Rapa and plans to pump a further $100 million into the site. But Variation 21 would mean it would have to get resource consent for 25,000sq m it wants to develop at The Base.

Mr Pohio said TGH was one of the biggest - if not the biggest - private landowner in the CBD and it made no sense for it to see its assets in the central city suffering.

"I can understand the positive intent of the council in this case but trying to force the issue through regulation I don't think is going to achieve it," he said. "In effect, it is just going to alienate those with the wherewithal to invest."

Porter Group development manager Mike McLennan said the change from a permitted activity to being non-compliant was as "big a change as you can probably get".

Porter Group occupies about 12ha on land opposite The Base.