Demand shaved, not slashed

Developers of a big warehouse in Palmerston North have failed to get a large bill slashed, but have succeeded in getting it shaved by thousands of dollars.

The $25,945 discount came after resource management commissioners couldn’t agree on how much the Palmerston North City Council should charge the developers of DKHS warehouse in Railway Rd.

The developers wanted their bill from the city council slashed from $387,244 to $51,318.

But after a hearing, in which the two independent commissioners disagreed with each other, they have been sent a revised bill for $361,299, a reduction of just $25,945, or 6.7 per cent before GST.

At issue was Palmerston North Industrial and Residential Development Ltd’s objection to the council’s claim for development contributions related to the $15 million, 11,000-square-metre warehouse. The warehouse area is bigger than a rugby field.

The company said it should not have to contribute to a range of city service projects because it did not create demand for them, nor benefit from them.

The council stuck with its development contributions policy, which enables it to treat all developments the same, averaging the bills for city projects that increase the capacity of services to cope with the demands of growth.

It charges development contributions as a way of relieving the burden on ratepayers for paying for growth.

The commissioners’ decision has upheld the council’s general practice as appropriate.

But it has also acknowledged developers have a right to object to having to contribute to particular projects if they can provide evidence the works are irrelevant to their needs.

Even so, the commissioners disagreed on that point.

Commissioner Graham Nielsen did not think it was valid to consider project by project whether a particular development caused a growth in demand for services, as that would come too close to undermining the council’s averaging policy.

If his views had prevailed, the objection would have been dismissed.

But Nielsen yielded to chairman Philip Milne’s opinion that the developer deserved the benefit of doubt.

The company’s consultant planner, Paul Thomas, had identified more than 50 roading, wastewater and water projects that he considered were not required or related to the objector’s development.

He argued the company should not have to contribute to water supply improvements, as the city’s supply did not deliver sufficient pressure.

The commissioners only agreed that five projects had no relevance to the development.

Palmerston North City Council senior planner Jono Ferguson-pye said the council had not received a formal response from the company since sending the amended bill.

There would be an option for it to seek a judicial review in the High Court.

Ferguson-pye said the council did not see the decision having any significant effect on the way it calculated development contributions. ‘‘We are comfortable with our policy. But there are some areas that we need to have a look at and that will inform our update of the policy for next year’s Long Term Plan.’’