Hamilton City Council has spent $97,147 on advice over acquiring land from Margot Buchanan's property on Peacockes Rd. Photo / Alan Gibson
A council acquiring private land without paying for it is still spending hundreds of thousands of ratepayer dollars in the process.
In one case, Hamilton City Council has spent more than the land is worth for planning, valuation and legal advice in the precedent-setting situation.
And two affected landowners say they can't understand the council's continued focus on betterment when new planning advice suggests there is none.
The council says it is not making a case for betterment but simply following the rules required under the Public Works Act.
Under that law, betterment occurs when the remaining land increases in value because of the public work - in this case the widening of Peacockes Rd on the outskirts of Hamilton - meaning there doesn't need to be compensation for the acquired land.
The council needs land from 39 properties to widen the road to make way for an 8000-house subdivision in the area, a 30-year project that will turn a predominantly rural suburb into medium-density housing.
So far it has acquired 28 of the 39 properties, with 22 by agreement.
But some landowners have objected to the council compulsorily acquiring portions of their land without compensation.
Valuations done for the council show a betterment to the properties, due to the water and sewerage infrastructure to be built with the new road, and the increased subdivision potential.
At Cam and Margot Buchanan's 6605sq m property the council wants to take 717sq m and lease 559sq m.
A valuation done for the council, dated July 1, 2019, made a betterment assessment of $50,000 based on its initial requirement of 1279sq m.
When the couple, both anaesthetists, objected the amount of land required was reduced.
Now their own valuation shows the 717sq m is worth $65,000 and "injurious affection" - where the widened road will negatively impact the property - at $69,000, recommending compensation of $134,000.
The council has already spent $97,147 on planning, valuation, and legal advice on the property since June 2018.
Cam Buchanan said he has yet to invoice the council $5560 for a second valuation he commissioned, bringing the total so far to $102.707, with no end in sight.
The tally would climb again to $137,707 if the couple accepted the council's $35,000 ex-gratia offer, making the total spend more than the recommended compensation which Buchanan said beggars belief.
"The bottom line is the council are holding the line of betterment.
"Why is the council spending all this money to defend a small plot of land? It just doesn't make sense. It's not the right thing to do and on this level it's commercially irresponsible."
Another landowner, Dr Scott Robinson, who had 3687sq m taken from his 2.4 hectare property in April for $1, obtained new planning advice and a valuation that suggested there was not a $282,500 betterment to his property as the council claimed.
Robinson's valuation showed the land in question was worth $221,000, not including injurious affection.
The council sought a new valuation based on old planning advice from a different company to one Robinson used, which said there was still a betterment.
It was reduced from $282,500 [including GST of $187,500] to $240,000, including GST of $255,000.
The valuation also showed an increase in the property's market value from the original valuation 18 months ago, by more than $300,000 to $1.46m, well below the market value of $2.26m suggested in Robinson's valuation.
"It shows a couple of things," Robinson, also an anaesthetist, said. "Firstly that the council valuations may have huge amount of error.
"If they can change this much in only two years then they can change a lot more in 10 years which is the timeframe for betterment.
"Secondly, the GST which would need to be paid on the property if it were subdivided completely negates any betterment because there is no GST to pay on the property currently as it is a family home.
"In essence the betterment they are claiming which allows them to not pay anything to take my land is due to the GST."
So far the council had spent $92,076 on planning, valuation and legal advice in relation to Robinson's property.
It had also offered Robinson and his wife Dr Cat Chang an ex-gratia payment of $45,000 that prevented them taking their case to the Land Valuation Tribunal, which they have not accepted.
"I think they're playing a very hardball game. They've had an opportunity to look at other valuation reports.
"In my opinion if you've got this much disgruntlement and you're taking people's land, you want to be absolutely sure that not only are you following the letter of the law but that you're right in what you're doing. And I'm not convinced they've done that."
Lawyer Thomas Gibbons, who is acting on behalf of effected landowners, said land was acquired for public works all the time and landowners were usually always paid fair compensation.
"The council seems very happy to keep paying consultants of all kinds rather than pay landowners and that still seems a very strange approach.
"They could have simply said 'We'll offer a fair and reasonable sum' at day one, and it would have saved everyone a lot of time and worry and stress.
"But instead they've taken the view that they'll keep on going through a process that's by its nature very expensive."
Council strategic development manager Andrew Parsons said the council did not need to get new valuations based on the property owners' planning advice because its advice met the requirements of the act.
"The council has considered the landowner's independent advice and does not believe it has sufficient new information to trigger a revaluation."
Parsons said the council was not making a case for betterment, rather it was following the law under the act.
When asked about the costs to ratepayers versus the suggested compensation for the two properties, Parsons said the landowners were entitled to their own independent advice at the council's cost to ensure they were not disadvantaged.
"These costs are expected and are always additional to any land valuation."
Asked if this was commercially responsible, Parsons said it was.
"Council is complying with its obligations under the Public Works Act and ... these costs are expected."