Developers anger over fee hike plan

Developers are fighting a proposal which legal experts say could see Auckland Council fees for some categories of new buildings rise up to 500 per cent.

Property Council of NZ executive met yesterday about possible changes in development contributions planned by the council. Its members are expected to make strong submissions opposing it.

“The Property Council is very concerned that the proposed increases in development contributions will slow down residential and business development at a time when we desperately need more,” a spokesperson said.

A developer went further: “They are trying to use development contributions to price big retail out of the city. They don’t want it,” he said.

But the council says it is making a substantial increase in infrastructure investment to support growth and allow developments to proceed, saying the contributions are rising to allow the council to fund necessary investment.

One developer said an Auckland retail outlet of about 5000sq m could see fees rise from the approximately $300,000 per new building to around $1.8 million. But larger-format stores might incur fees of up to $2m to $2.5m per development, he estimated, which would make such schemes financially untenable.

A legal expert said if the change goes ahead, those planning new retail real estate developments face a potential 500 per cent rise in fees which are development contributions.

The council released a draft contributions policy 2019 where the big fee hikes were disclosed.

The expert said the 2019 plan been amended significantly compared to the 2018 draft plan and reissued for public submissions by later this week.

“Some of those figures seem remarkably high,” he said.

Development contributions for new retail, hospitality, recreation and personal services buildings appear to be six times as high — that is, a 500 per cent increase compared to the 2018 draft, the lawyer said.

Andrew Duncan, the council’s financial policy manager, said contributions from developers pay for reserves, stormwater infrastructure, transport network improvements, cycleways, public transport and community infrastructure.

Submissions to the scheme close on Thursday, he said.