Landowners fighting a council trying to take part of their properties to build a road say they didn't object to the road designation because they were told they would be compensated.
But Hamilton City Council is acquiring large chunks of private land without paying compensation in a situation labelled "ludicrous nonsense" by an MP.
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The council is widening Peacockes Rd to make way for a $290 million subdivision of 8000 homes to be built over 30 years.
Dozens of affected landowners have either sold entire properties to the council and moved out of the area or are having part of their land compulsorily acquired under the Public Works Act, 1981.
The Act ensures that landowners whose property is acquired by the Crown and its authorities for a public work should not be financially disadvantaged.
It's the concept of betterment, where the remaining land is valued higher after the works meaning the council does not have to pay compensation, that is causing distress.
One landowner says the council has relied on planning advice for the betterment that makes a series of assumptions about his property that do not take into account:
• The impact of a large, noisy road near the house and the 10 years it will take to construct the road and housing;
• The fact the property has been valued as lifestyle but will no longer be suitable for that purpose;
• That a replacement lifestyle property with similar attributes such as being close to the hospital with a quiet, rural outlook, would cost between $1.5 million and $2m;
• And that land values in Peacocke have largely remained low, partly because of the uncertainty created by the council, which earmarked the area for subdivision more than a decade ago.
Scott Robinson and Cat Chang, both doctors at Waikato Hospital, have been offered $1 by the council for almost 5000sq m of their 2.4ha property.
The council commissioned a planning report from Bloxam, Burnett and Olliver [BBO] that was used to guide a valuation of the property.
That valuation estimated the remaining land would be worth $282,500 more than it is now, due to betterment, because of the water and sewage infrastructure to be built with the new road, and the increased subdivision potential.
"Council have said I won't have access to either the road or the infrastructure so despite the fact it's going through my property, they say I can't have access to it," Robinson said.
At Cam and Margot Buchanan's property, the council is acquiring 1279sq m and says the remaining 3721sq m is worth more because of subdivision potential.
However, National MP for Hamilton West Tim Macindoe said it was absurd to suggest the couple could subdivide what's left of the lifestyle block without "completely destroying the whole character".
"That, to my mind, is ludicrous nonsense that needs to be called out," Macindoe said.
"I think that they have a very fair grievance. They're not looking to get unfair advantage, they are simply looking to be treated fairly, for their concerns to be heard and responded to."
Macindoe said the issue highlighted an anomaly with the Public Works Act that could be addressed in Parliament.
Land Information Minister Eugenie Sage said the case was so unusual that she had instructed officials to review the law that applies to compulsory acquisition next time the Public Works Act is renewed.
Robinson, the Buchanans and another affected resident, Mac McGregor, told the Weekend Herald they did not object to the road designation because they were led to believe they would be compensated.
In response to the "assumptions" made in the planning advice about Robinson's land, council strategic development manager Andrew Parsons maintained the council's valuation was prepared by an experienced, registered valuer based on expert planning advice.
Parsons said the council was happy to discuss variances between valuations but had not yet seen any of those landowners' valuations, paid for by the council.
He said value growth in a suburb depended on complex factors and was not something the council had influence over.
There was no conflict of interest in BBO carrying out the planning advice, he said, and BBO was one of several professional suppliers that undertakes a range of work for the council.
Parsons said BBO was awarded two contracts related to the Peacocke development by tender, one a five-year construction package including a new bridge across the Waikato River, and the other a two-year project for road design.
The contracts totalled $9.2m and BBO was not guaranteed further contracts after the road is built, he said.
Hamilton mayor Paula Southgate, who has declined to meet with the affected landowners, said it was not a question of fairness but of following the law.
"I understand this can be stressful for some and I definitely agree the notion of betterment is very complex.
"But betterment is not council's notion – it is fixed in law and sets the framework for compensation.
"If landowners have valuation advice that they haven't shared with us, we are urging them to do that so we can continue discussions."
She said she would welcome a review of the Public Works Act.