Developers howl at threat of Auckland levies rise

Many of the country's wealthiest property developers are squealing at the prospect of higher growth levies for community facilities, parks, transport and stormwater in Auckland City.

Retail giant Westfield, Trans Tasman Properties and the developer behind the three Scene blocks on the waterfront, Tony Gapes, are among a battery fronting up to the city council today to voice their anger at higher development contributions.

Over the next four days, councillors will hear verbal submissions on a draft 10-year plan and this year's budget, which features rates increases of at least 11 per cent for residents plus higher water bills.

The council, faced with a population increase of 6000 new residents a year, has proposed increasing development and financial contributions from $20 million to $24 million a year to pay for an estimated $280 million of growth-related facilities over the next decade.

The higher charges for parks, community facilities, stormwater and a new charge for transport would add about $950 to the cost of a new household unit.

If developers did not pay the higher charges, the council would have to sting residents with higher rates or just not build new facilities, leading to greater pressure on existing facilities and a "decline in the city's attractiveness", according to a report by council staff.

The report said increasing development contributions to recover more of the cost of growth was "fairer, reflects 'causer pays', provides signals about the true cost of growth and offers transparent and secure funding for growth expenditure".

But the development community, backed by the Property Council of New Zealand, is concerned at the way Auckland City and other councils are setting development contributions.

A group of property developers is taking the North Shore City Council to the High Court over the fairness of its development contributions. The outcome of the case, set to be heard over the next month, is being watched closely by councils and developers.

Property Council national director Connal Townsend said in a written submission that it was concerned that several councils had not provided sufficient rigorous and adequate information of cost-related growth.

Development contributions were provided for in the 2002 Local Government Act to help councils to pay for growth-related costs. Councils cannot levy developers for non-growth-related infrastructure or operating expenditure.

Among concerns being raised by property developers are the limited opportunities for a review of contributions, no rights of appeal and the inflationary effect. Trans Tasman said the higher costs would ultimately be passed on, with particular social implications for first-home buyers, low-income households and the elderly.

Viaduct Harbour Holdings, controlled by millionaire investors Trevor Farmer, Adrian Burr and Mark Wyborn, said the new charges were "unfair, unreasonable, inequitable and unlawful" and "significantly over-estimate the effects of development".

"No, or no adequate assessment has been undertaken of the positive effects of future development," the company said in a written submission.

Auckland University said it should be exempt from development contributions because it was an educational institution, a research hub and made a significant contribution to the city and regional economy.