Council spending out of control
In Kapi-Mana News (June 9) the CBD re-development cost is stated to be $21 million. But this still excludes:
1. Related cost of acquiring and holding land and buildings purchased for the re-development, like repairs and maintenance, insurance, legal fees, real estate fees, consultants, property managers, interest and other fees.
2. Work to be funded from departmental budgets, like roads, parks, water, footpaths, etc.
3. Lost rates and rental revenue.
4. Costs of selling the new or redeveloped buildings.
Plan A was to get private developers and financiers interested.
Retailing is being overtaken by the internet, and it’s not an attractive residential area.
It’s a high-risk in the event of a tsunami, rising sea levels, and liquefaction post-earthquake.
But such matters are trivial to councillors spending ratepayers’ money, so they have, and continue to, approve land and building purchases, largely behind closed doors.
So having used ratepayers to purchase a motley selection of land and geriatric buildings, at premium prices, now costing the city serious dollars every year, despite deferring maintenance, what next?
Plan B is for ratepayers to provide cash incentives to investors, developers and businesses, like rate and rent
holidays, discounted permit fees, urgent changes to planning and building rules, free or discounted fitouts, and discounts on purchases.
At $21m (equivalent to $400 for each person living in Porirua), the council is still deluded about the true cost of the city centre redevelopment. It will end up costing $1000-plus per person.
Our mayor states that residents who don’t support the CBD redevelopment initiatives should think about and be grateful the council bought Aotea, North City and the MegaCentre land, and sold it to developers.
Actually Porirua residents bought and held the land, through high rates. And high rates increases. And deferred maintenance, and no new infrastructure.
Perhaps the mayor will disclose precisely how much ratepayers made (or lost) on each of those land deals, after deducting all direct and indirect costs, up to and including the time of sale.
The CBD redevelopment project is the latest, where the only
people to financially benefit from this project are those selling the land and buildings to the city, consultants, real estate agents and buyers.
They receive a handout, while ratepayers carry all the costs and risks.
‘‘The price of growth’’ is what we will be told when rate increases hit double figures in the next three years, unless there are further reductions in our already low core infrastructure maintenance budgets.