Last minute fees stall opening of gym

A Rotorua man wanting to set up a 24-hour gymnasium says he is still considering dropping the idea after thousands of dollars of council fees were dumped on him at the last minute.

Daniel Brons said the Rotorua District Council had delayed the opening of his proposed gymnasium on Fairy Springs Rd - Blaze 24 Hour Fitness - by about two months after he received a development contribution fee of $8454.32 to be paid before he opened his doors.

The council imposes development contributions on any new development in the city to cover costs for future infrastructure.

Mr Brons said he considered taking his business to Taupo or Tauranga saying the fee contradicted the council's new growth strategy and was a substantial outlay for a small business trying to get started.

At a meeting of the council's infrastructure services committee recently, district councillors decided on a compromise which almost halved the development contribution but Mr Brons said he was still considering whether he would go ahead.

Before the meeting, council staff revised the fee down to $5937.36 and suggested councillors stick to that figure.

"I was absolutely shocked, I was going to move on. But I was willing to wait out the process and tell my story to council," Mr Brons told The Daily Post.

He said he had specifically asked council staff to tell him what fees he would have to pay during the process but was totally unaware he had to pay a development contribution.

"All I'm doing is adding a few new showers, but I don't see how this [policy] is encouraging growth ... it just pushes people away."

He said his gym would employ up to 10 local people and he and his family would like to continue living in Rotorua.

"Rotorua is not an enabling regulatory environment when businesses cannot financially afford to pay unplanned and extremely high council development contribution fees, forcing businesses to re-locate out of Rotorua and possibly New Zealand," he said in a letter to councillors.

But, councillors voted to reduce the fee to $4116 saying they could not drop the fee entirely as development contributions were council policy.

However, councillor Mike McVicker said it was another example of the council making it hard for small businesses trying to get started in the city and wanted to see the fee dropped entirely. He was supported by councillors Julie Calnan and Mark Gould.

Mrs Calnan said she was "fed up" with council not "walking the talk" when it came to growing business in the city.

"We have to be totally up front when discussing these fees with people so they can include them in their budgets."

Infrastructure Services group manager Nico Claassen said he was surprised development contribution information was not sent to Mr Brons and would look into how that had happened.

Infrastructure services committee chairwoman Glenys Searancke said she felt the fee was appropriate considering it cost about $13,000 in development contributions when someone wanted to build a house in a residential area.

"It does not make sense to me when we can hit a residential householder with $13,000 and not this one."

Mr Brons said he was happier when told his fee had been lowered but said $4000 was still a lot to pay before opening his doors.