‘One-sided’ deal exposed
Hamilton councillors accepted a ‘‘one-sided’’ deal containing significant risks to the city after the government played hardball over the offer of a $150 million housing fund.
The city’s exposure and housing agency Kā inga Ora’s stance is made clear in a Stuff investigation related to the money from the Infrastructure Acceleration Fund, the biggest such grant in the city’s history.
‘‘Staff believe the agreement is one-sided in favour of Kā inga Ora. It contains terms that HCC would not normally accept,’’ said a report to a public excluded council hui in September last year.
However, the council subsequently unanimously approved the final agreement in another closed session in October, just before the election, after hearing from staff that the money was badly needed.
The following month Housing Minister Megan Woods announced the successful $150m bid in Hamilton, flanked by mayor Paula Southgate.
In a statement last Tuesday about the risks outlined in the released information, the council’s general manager growth Blair Bowcott confirmed the final terms agreed in October were the same as outlined in the September report.
‘‘The terms did not change in the agreement. Council approved the IAF Agreement.’’
On why staff saw the terms as favouring Kāinga Ora and creating risks for the council, Bowcott said a key example was that ‘‘after running a procurement process, council is required to seek consent from Kā inga Ora prior to awarding construction contracts’’.
‘‘Staff view this as creating risk to council and taking away council’s autonomy over its decision-making and processes.
‘‘That being said, we also understand that significant investment from the Crown comes with a level of oversight and due diligence to ensure the funds are used responsibly.’’
Other concerns outlined in the September report included milestone-based payments, appointment of observers if HCC is ‘‘in breach’’ and ‘‘termination rights’’ for Kā inga Ora.
Specific risks highlighted were the council having to meet all additional costs where an IAF funding project costs exceeds budget and, if the agreement is terminated, HCC being left with projects in progress and which can’t be stopped.
Bowcott stressed the city’s infrastructure couldn’t cope with large scale development.
‘‘The IAF agreement presented an opportunity to have $150 million to put towards that infrastructure to enable housing development.
‘‘Decisions like this are about weighing up all the risks and opportunities and ultimately council chose to proceed with the IAF and secure a $150m government grant and avoid this cost being met by council in the future.’’
On how the council would ensure the city didn’t suffer because of the riskier terms, Bowcott said: ‘‘Council is proactive in managing all risks as part of its normal project management.
‘‘These will be assessed and managed by the project manager throughout the life span of this project.’’
One suggestion has been that the $150m was somehow conditional on a major housing development at Sonning carpark in the CBD, the site of the former Opoia Pā, set to be the subject of a claim to the Waitangi Tribunal from local hapū Ngāti Wairere.
But Bowcott said if such a project didn’t go ahead it wouldn’t derail getting all or any of the $150m.
‘‘No. The IAF funding is for critical infrastructure projects, to enable approximately 4000 homes across multiple development sites within the Hamilton central city area,’’ Bowcott said.
However, in an earlier statement this (February) month, he confirmed the council – as owner of the carpark – had signed a housing outcomes agreement over the land with the Government ‘‘as it supports our vision for the site and will help achieve our housing aspirations’’.
Bowcott said signing the housing outcomes agreement ‘‘does not supersede any public and iwi engagement commitments’’.
On Thursday, the council considered an IAF update from staff.
‘‘Staff view this as . . . taking away council’s autonomy over its decisionmaking and processes.’’
Blair Bowcott
Hamilton City Council’s general manager of growth