Addendum Agenda of Finance and Performance Committee

Finance and Performance Committee

16 April 2014

Disposal Recommendation Report

File No.: CP2014/06898

Purpose

1. This report seeks approval to sell 22 non-service council owned properties that Auckland Council Property Limited (“ACPL”) consider suitable for sale. Eight of these properties have previously been presented to the Strategy & Finance Committee, but required further work to be completed prior to being re-presented to this Committee. This work has now been completed and the properties are being re-presented in this report.

Executive Summary

2. ACPL is required to identify properties from within council’s portfolio that may be suitable for potential sale to a combined value of $12.3 million by 30 June 2014. ACPL and Auckland Council Property Department (“ACPD”) work collaboratively on the comprehensive review process to identify such properties.

3. Capital receipts from the sale of the surplus properties will contribute to all Auckland Plan outcomes by providing the council with an efficient use of capital and prioritisation of funds to achieve its activities and projects.

4. The 22 properties outlined in this report have a cumulative rating value of $11 million. 14 of these properties are being presented to the Finance & Performance Committee (“F&PC”) for the first time. These properties have a cumulative rating value of $7 million. These relate to the $12.3 target. These properties have been through the agreed consultative process including organisation wide internal officer consultation, local board and Iwi engagement. The feedback has been generally supportive of the proposed disposal of the sites. Detailed information about the rationalisation process for each these sites is contained herein under the respective property heading.

5. The remaining eight properties in this report were presented to the Strategy & Finance Committee (“S&FC”) during the previous term. These properties have a cumulative rating value of $5 million. When these sites were previously presented to the S&FC the respective local boards in each instance opposed the disposal of the various sites and advocated retention of these sites for various reasons. The S&FC resolved in respect of each property that a temporary extension of time be granted to allow further work to be undertaken on the respective properties. This work has now been completed and is detailed herein under the respective property heading. With respect to the eight sites being represented, there is still a lack of identified budget and evidenced based service rationale to retain the properties. The respective local boards continue to oppose the disposal of eight sites being sold. Given a robust financial analysis and evidence-based service rationale has not been established to support the retention of these sites, ACPL recommends that they be disposed of.

Recommendation/s

That the Finance and Performance Committee:

a) That subject to the satisfactory conclusion of any required statutory processes, the Finance and Performance Committee approves the disposal of the land at:

i. 1/41 Anzac Street, Takapuna comprised of an estate in fee simple, containing a 1/6 share of a 1442m²section more or less being Part of Allotment 75 Parish of Takapuna Flat 1 DP 58619, NA12B/578;

ii. 3/41 Anzac Street, Takapuna comprised of an estate in fee simple, containing a 1/6 share of a 1442m² more or less being Part of Allotment 75 Parish of Takapuna Flat 3 DP 58619 and Garage 7 DP 58619,NA12B/580;

iii. 397 Lake Road, Takapuna comprised of an estate in fee simple, containing 610m² (less 122m²) more or less being Lot 1 DP 1150, NA529/91;

iv. 161 Dominion Road, Mt Eden comprised of an estate in fee simple; containing 262m2 more or less being Part Lot 1 DP 208835, NA NA137A/159

v. 514 Dominion Road, Mt Eden comprised of an estate in fee simple containing 383m² more or less being SEC 2 SO 452549, CT-589349;

vi. Section 4, SO 387404, East Coast Road, Dairy Flat comprised of an estate in fee simple, containing 3427m² more or less being Section SOP 387404 contained in certificate of title deposited on CFR 412123;

vii. 90 Smales Road, East Tamaki comprised of an estate in fee simple, containing 2405m² more or less being Lot 500 DP 310600 contained in certificate of title 41652;

viii. 90A Smales Road, East Tamaki comprised of an estate in fee simple, containing 295m² more or less being Lot 501 DP 310600 contained in certificate of title 41653;

ix. 1815 Great North Road, Avondale comprised of an estate in fee simple, containing 760m² more or less being Part Lot 5 DP 7676 contained in certificate of title NA1058/173;

x. 1817 Great North Road, Avondale comprised of an estate in fee simple, containing 1044m² more or less being Part Lot 4 DP 76761388 contained in certificate of title NA1065/144;

xi. 1823 Great North Road, Avondale comprised of an estate in fee simple, containing 1268m² more or less being Part Lot 3 DP 7676 contained in certificate of title NA370/12;

xii. 25A Verran Road, North Shore comprised of an estate in fee simple containing 1533m²more or less being Lot 6 DP 39117 contained in NA 90D/97;

xiii. 24 Racecourse Parade, Avondale comprised of an estate in fee simple containing 1548m² more or less being Lot 1 DP 60896 contained in NA16D/686;

xiv. 26 Racecourse Parade, Avondale comprised of an estate in fee simple containing 1950m² more or less being Part Lot 7 DP 16112 contained in NA2B/154;

xv. 34 Moore Street, Howick comprised of an estate in fee simple containing 3754m²more or less being Lot 2 DP 91111, Lot 3 DP 91111 and Lot 4 DP 91111 contained in certificates of title NA48B/508, NA48B/510 and NA48B/509;

xvi. 199 Cavendish Drive, Manukau Central comprised of an estate in fee simple containing (less 58m²) more or less being Lot 206 DP 18037 in certificate of title NA828/178, subject to ACPL and Auckland Transport resolving shared use issues with an adjoining land owner;

xvii. 203 Cavendish Drive, Manukau Central comprised of an estate in fee simple containing 825m² (less 59m²) more or less being Lot 205 DP 18037 in certificate of title NA889/72;

xviii. 207 Cavendish Drive, Manukau Central comprised of an estate in fee simple containing 825 m² (less 59 m²) more or less being Lot 204 DP 18037 in certificate of title NA466/191;

xix. 211 Cavendish Drive, Manukau Central comprised of an estate in fee simple containing 825 m² (less 59 m²) more or less being Lot 203 DP 18037 in certificate of title NA466/193;

xx. 215 Cavendish Drive, Manukau Central comprised of an estate in fee simple containing 825 m² (less 60 m²) more or less being Lot 202 DP 18037 in certificate of title NA466/161;

xxi. 219 Cavendish Drive, Manukau Central comprised of an estate in fee simple containing 825 m² (less 61 m²) more or less being Lot 201 DP 18037 in certificate of title NA482/268; and

xxii. 56 Clendon Avenue Manukau Central comprised of an estate in fee simple containing 822 m² more or less being Lot 200 DP 18037 in certificate of title NA460/243.

b) That ACPL will undertake the sales process for any prominent sites in a manner that seeks to maximise the opportunities to achieve quality urban design outcomes;

c) That ACPL will keep informed with the Howick Local Board as part of the planning for the 34 Moore Street, Howick site;

d) That ACPL will keep informed with the Otara-Papatoetoe Local Board as part of the planning for the sites at 203, 207, 211, 215 and 219 Cavendish Drive and 56 Clendon Avenue, Manukau; and

e) Final terms and conditions to be approved under the appropriate delegations.

Discussion

6. ACPL and ACPD work collaboratively on a comprehensive review process to identify properties in the council portfolio that may be suitable to sell. Once identified as a potential sale candidate ACPL takes the property through a multi stage engagement process.

7. The first phase of the process involves engagement with a wide stakeholder audience across council and CCO’s. The engagement establishes whether a property is needed for a future funded project or whether it must be retained for some clear strategic purpose. This is determined by an Expression of Interest (“EOI”) process whereby officers can request that all or part of a property is retained. Local Boards have the same opportunity. Alternatively officers may request that the property be encumbered or covenanted as part of the disposal process. If the EOI sets out a robust financial analysis and evidence based rationale to retain the properties, then the EOI is endorsed. If however the reasoning is more subjective a thorough business case is required. An inter-disciplinary council and ACPL steering group comprised of senior managers, called the Property Review Steering Group meets on a monthly basis to assess the business cases.

8. The Heritage Unit is also invited prior to the EOI process to flag any particular archaeological merit that need to be assessed further. ACPL also proactively researches any possible contamination flags that may be associated with a property during the process.

9. The EOI process provides the Maori and Strategy Relations team the opportunity to flag any issue that is of particular relevance to Maori in connection with the potential disposal of a site.

10. Once a property has been cleared of any service requirements, ACPL then consults with Local Boards, Ward Councillors, Mana Whenua and the Independent Maori Statutory Board.

11. ACPL has developed a robust form of engagement with Mana Whenua groups across the region. Each relevant mana whenua group is contacted independently by email based on a contact list which is regularly updated. Each group is provided general property details, including a property map, and requested to give feedback within 15 working days. Contacts are sent reminder notices a week out from the due date, and alerted of the passing of the due date in the week following if no feedback has been submitted. Confirmation of any interest expressed is sent in writing and recorded for inclusion in the disposal recommendation report. A feedback spreadsheet is provided to facilitate responses. Any requests for extensions of a due date are handled on a case by case basis.

12. ACPL’s engagement directs mana whenua to respond with any issues of particular cultural significance the group would like to formally express in relation to the subject properties. We also request express notes regarding any preferred outcomes that the group would like us to consider as part of any disposal process.

13. From discussions with our Maori and Strategy Relations team we are developing an understanding of what could amount to a ‘matter of significant cultural relevance’ to Iwi. We are also developing a range of reasonable outcomes that could be employed when such a matter of cultural significance is raised in relation to a potential disposal property. Possible outcomes could include commemoration or physical acknowledgment in the form of plaques or other mutually agreed means of recognition. In the event of any issues of particular cultural significance being raised, ACPL will work with the relevant council departments to assess the merits of any such requests and keeps the interested parties informed along the way.

14. Mana whenua groups are also invited to express potential commercial interest in any sites and are put in contact with ACPL’s Development team for preliminary discussions if appropriate to the property. This facilitates the groups’ early assessment of the merits of a development opportunity to their iwi. In the event a property is approved for sale all groups are alerted of the decision, and all groups are alerted once a property comes on the market.

15. ACPL encourages feedback by the specified due date, to enable us to compile details and act on feedback in a timely manner. However late submissions will always be accepted and their requests followed through. Late feedback will be incorporated into the disposal recommendation report at any time right up until the report’s closing date.

16. Lastly a report is presented to the Independent Maori Statutory Board ahead of presenting any recommendations to sell to the Strategy and Finance Committee detailing how Maori have been engaged throughout the process.

17. All sale recommendations must be approved by the ACPL Board before it makes the final recommendation to the Strategy and Finance Committee. As part of the overall review process each property is also legally assessed to see if there are any impediments to sell or if there is a prescribed legal way in which it must be sold. The last stage of the process is triggered once a resolution to sell is obtained. This involves a robust ‘add value’ assessment as part of the development of the final sales strategy. There is specific attention applied to the possible suitability of the site for housing purposes.

Consideration

1/41 and 3/41 Anzac Street, Takapuna

Summary

18. The subject sites comprise two of six units with the land area of all six units being 1402m². The units are located approximately 500m south of Lake Pupuke (refer to images in Attachment A). The properties were transferred to the North Shore City Council (“NSCC”) in 1999 for the purposes of widening Anzac Street.

19. The rationalisation process commenced in May 2013. No EOI’s were received.

20. The EOI process provided the Maori and Strategy Relations team the opportunity to flag any issue that is of particular relevance to Maori. The Heritage Unit was also invited through the EOI process to flag any particular archaeological merit. Neither party has flagged any relevant issues.

21. Given there was no request to retain these sites for a service need, they are on the face of it surplus and as such we recommend that the sites be sold.

22. Being two units in a six unit terraced property there is little value add potential. This view is supported by the Development team. If approved for sale the properties will be sold on the open market as is. The Disposals team have advised that these units are situated in a good location and that once these units are ready for sale they would be well received in the current market.

Local Board Views

23. The Devonport Takapuna Local Board endorsed the proposed disposal of these sites.

24. The Devonport Takapuna Local Board was first engaged regarding these properties in May 2013. Initially it felt that council should retain the Anzac Road properties because they are in an area which is designated for future motorway use. However the board now realises that Council would have to buy the other four adjoining flats in order to have any meaningful leverage on the site. On this basis they realise that it was not a commercially viable aspiration and as such the board endorse that the subject properties be disposed of.

Maori Impact Statement

25. Twelve iwi authorities were contacted around the potential sale of 1/41 and 3/41 Anzac Street, Takapuna. The following feedback was received:

i) Ngati Whatua o Orakei

Ngati Whatua o Orakei has no specific issues of cultural significance to raise about these properties and has no commercial interest.

ii) Te Ara Ranatu o Te Iwi o Ngati Te Ata Waiohua Incorporated

The Ngati Te Ata stakeholder has no specific issues of cultural significance to raise about these properties but expresses potential commercial interest.

General

26. The subject sites are not subject to s40 Public Works Act 1981 offer back requirements.

27. The properties are not one of council’s strategic assets to which the significance policy would apply.

28. Capital receipts from the sale and redevelopment of these properties will contribute towards council’s budget for asset sales that is incorporated into the council’s debt and interest projections. If the council’s asset sales budgets are not met, then debt and interest costs will increase relative to budget.

Implementation Issues

29. None.

397 Lake Road, Takapuna

Summary

30. The subject site available and located 200m south of the Esmonde Road and Lake Road junction (refer to images in Attachment A). The property was acquired by the NSCC in 2004 for the widening of Lake Road.

31. The rationalisation process commenced in May 2013. No EOI’s were received.

32. The EOI process provided the Maori and Strategy Relations team the opportunity to flag any issue that is of particular relevance to Maori. The Heritage Unit was also invited through the EOI process to flag any particular archaeological merit. Neither party raised any relevant issues.

33. Given there was no request to retain this site for a service need, this site is on the face of it surplus and as such we recommend that the site be sold.

34. If and when the site is approved for sale, ACPL’s Disposal team will consider what, if any, value add opportunity there is to refurbish the property in order to improve its marketability and sale price. The Disposals team has advised that this property is situated in a good location and they anticipate that this property would be well received in the current market.

Local Board Views

35. The Deveonport-Takapuna Local Board was first engaged regarding this property in May 2013. The board supports the proposal to dispose of this site.

Maori Impact Statement

36. Twelve iwi authorities were contacted around the potential sale of 397 Lake Road, Devonport. The following feedback was received.

i) Ngati Whatua o Orakei

Ngati Whatua o Orakei has no specific issues of cultural significance to raise about these properties and has no commercial interest.

ii) Te Ara Ranatu o Te Iwi o Ngati Te Ata Waiohua Incorporated

The Ngati Te Ata stakeholder has no specific issues of cultural significance to raise about these properties but expresses potential commercial interest.

General

37. The subject site is not subject to s40 Public Works Act 1981 offer back requirements.

38. This property is not one of council’s strategic assets to which the significance policy would apply.

39. Capital receipts from the sale and redevelopment of these properties will contribute towards council’s budget for asset sales that is incorporated into the council’s debt and interest projections. If the council’s asset sales budgets are not met, then debt and interest costs will increase relative to budget.

Implementation Issues

40. None.

161 Dominion Road, Mt Eden

Summary

41. The subject site comprises a 262m² section on the west side of Dominion Road (refer to images in Attachment A). There is a detached four bedroom residential villa on the site that was built circa 1880s and has since been heavily modified.

42. This property was transferred to Auckland City Council in June 2010 as part of land acquisitions for Dominion Road’s passenger transport designation. The designation required 2.15 metres of frontage and a full purchase of the property was undertaken. In 2012, 46m² of the property was declared to be road.

43. The rationalisation process commenced in March 2013. No EOI’s were received.

44. The EOI process provided the Maori and Strategy Relations team the opportunity to raise any issues of particular relevant to Maori. The Heritage Unit was also invited through the EOI process to raise any particular archaeological issues. The Heritage Unit found that while the villa is one of the few buildings remaining from the original residential subdivision of farming land on the west side of Dominion Road, the villa has been heavily modified since its original construction. The building is not currently scheduled or otherwise protected and there are no obvious heritage issues relating to the potential divestment of this property. However the Heritage Unit did advise that guidance be sought from the Historic Places Trust if demolition, relocation or further modification of this building is proposed.

45. Given there was no request to retain this site for a service need, on the face of it this site appears to be surplus and as such we recommend that the site be sold.

46. Due to the age of the building and various unconsented modifications, ACPL’s disposal team advise that there no value-add opportunities that should be pursued ahead of disposal as the cost of refurbishing this property would outweigh any potential return. If approved for sale, this property will be sold on the open market as is. The Disposals team have advised that this property is situated in a good location and in the current market the subject site would be well received.

Local Board Views

47. The Albert-Eden Local Board was engaged with regarding this property and did not raise any concerns about the disposal of this property. The Albert-Eden Local Board endorsed ACPL’s recommendation to dispose of this site at its business meeting on 7 August 2013.

Maori Impact Statement

48. Thirteen iwi authorities were contacted around the potential sale of 161 Dominion Road, Mt Eden. The following feedback was received.

i) Ngati Whatua o Orakei

Ngati Whatua o Orakei has no specific issues of cultural significance to raise about these properties.

ii) Ngati Whatua o Kaipara

Ngati Whatua o Kaipara has potential commercial interest in any properties that council deems surplus to service requirements.

iii) Te Kawerau a Maki

Te Kawerau a Maki has potential commercial interest in any properties that council deems surplus to service requirements.

iv) Ngati Paoa

Ngati Paoa has potential commercial interest in any properties that council deems surplus to service requirements.

v) Te Ara Ranatu o Te Iwi o Ngati Te Ata Waiohua Incorporated

The Ngati Te Ata stakeholder contact states that Mount Eden is the paramount maunga of Tupuna Huatau – his father Huakaiwaka was the progenitor of Waiohua, the original inhabitants of Tamaki Makarau. Huatau is the father of Te Ata from whom they take the name Ngati Te Ata. As such they have a generalised cultural interest in all Mt Eden properties. They further express potential commercial interest in the properties. A site visit was undertaken on 13 August to explore their interests. Following the visit Ngati Te Ata requested ACPL give feedback to council that property discounts should be considered to enable iwi to live in their rohe as most central properties are unaffordable at present.

General

49. This site is not subject to s40 Public Works Act 1981 offer back requirements.

50. The site is not one of Council’s strategic assets to which the significance policy would apply.

51. Capital receipts from the sale and redevelopment of these properties will contribute towards council’s budget for asset sales that is incorporated into the council’s debt and interest projections. If the council’s asset sales budgets are not met, then debt and interest costs will increase relative to budget.

Implementation Issues

52. None.

514 Dominion Road, Mt Eden

Summary

53. This property is a 383m2 vacant site located on the corner of Dominion Road and Dexter Road, Mt Eden (refer to images in Attachment A). This property was purchased by Auckland City Council in May 2011 as part of land acquisitions for Dominion Road’s passenger transport designation. The existing dwelling was demolished and in 2012 57m2 of the property was declared to be road.

54. The rationalisation process commenced in March 2013. No EOI’s were received.

55. The EOI process provided the Maori Strategy Relations team the opportunity to flag any issue that is of particular relevance to Maori. The Heritage Unit was also invited through the EOI process to raise any particular archaeological issues. Neither party has flagged any relevant issues.

56. Given there was no request to retain this site for a service need, it is surplus and as such we recommend that the site be sold.

57. If approved for sale, this property will be sold on the open market as is, subject to section 40 offer back requirements. ACPL’s Disposal team advised that the subject site is situated in a good location and they anticipate it would be well received in the current market.

Local Board Views

58. The Albert-Eden Local Board endorsed ACPL’s recommendation to dispose of this property at its business meeting on 7 August 2013.

Maori Impact Statement

59. Thirteen iwi authorities were contacted around the potential sale of 514 Dominion Road, Mt Eden. The following feedback was received.

i) Ngati Whatua o Orakei

Ngati Whatua o Orakei has no specific issues of cultural significance to raise about these properties.

ii) Ngati Whatua o Kaipara

Ngati Whatua o Kaipara has potential commercial interest in any properties that council deems surplus to service requirements.

iii) Te Kawerau a Maki

Te Kawerau a Maki has potential commercial interest in any properties that council deems surplus to service requirements.

iv) Ngati Paoa

Ngati Paoa has potential commercial interest in any properties that council deems surplus to service requirements.

v) Te Ara Ranatu o Te Iwi o Ngati Te Ata Waiohua Incorporated

General

60. This site is subject to s40 Public Works Act 1981 offer back requirements.

61. The site is not one of Council’s strategic assets to which the significance policy would apply.

62. Capital receipts from the sale and redevelopment of these properties will contribute towards council’s budget for asset sales that is incorporated into the council’s debt and interest projections. If the council’s asset sales budgets are not met, then debt and interest costs will increase relative to budget.

Implementation Issues

63. None.

Section 4, SO 387404, East Coast Road, Dairy Flat

Summary

64. The subject site is a vacant rural-residential site with a pan handled shaped rear extending 80m from the end of a short stub of largely unformed legal road (refer to images in Attachment A). The subject site backs onto the motorway in central eastern Dairy Flat and is depicted as road on a survey plan dated April 1884. The property was part of Top Road and, if formed, would have joined the formed portion of Top Road. In 2006 the Rodney District Council (“RDC”) subdivided an adjoining property and negotiated the sale of stopped portions of East Coast Road and Top Road to adjoining landowners. Following this work new titles were issued, and this property was identified in its current form on SO 387404. In 2008 RDC commenced negotiations to sell this site to the adjoining landowners. These negotiations continued into 2010 but were never finalised.

65. The rationalisation process commenced in May 2013. No EOI’s were received. Auckland Transport identified that the New Zealand Transport Agency may require this site in the future for a busway extension to Silverdale.

66. The EOI process provided the Maori and Strategy Relations team the opportunity to flag any issue that is of particular relevance to Maori. The Heritage Unit was also invited through the EOI process to flag any particular archaeological merit. Neither party has flagged any relevant issues.

67. Given there was no request to retain this for a service need, it is surplus and as such we recommend that the sites be sold.

68. The Disposal team advised that this property is situated in a location where demand is strengthening. Should this site be cleared for sale, the Disposal team anticipate that in the current market, once tasks such as valuation work and a value add assessment have been undertaken to ready the property for sale, the interest offered will be well received.

Local Board Views

69. The Hibiscus and Bays Local Board confirmed that it does not have a service need for this site and supports the proposed disposal of this site.

Maori Impact Statement

70. Fourteen iwi authorities were contacted around the potential sale of Section 4 SO387404, East Coast Road, Dairy Flat. The following feedback was received:

i) Ngati Manuhiri

Ngati Manuhiri expressed potential commercial interest in all Rodney Local Board area properties that may become available for sale.

ii) Ngati Whatua o Orakei

Ngati Whatua o Orakei has no commercial interest in this property.

iii) Ngati Whatua o Kaipara

Ngati Whatua o Kaipara expressed potential commercial interest in this property.

iv) Te Kawerau a Maki

Te Kawerau a Maki has expressed potential commercial interest in any properties that council deems surplus to service requirements.

v) Ngati Te Ata Waiohua

Ngati Te Ata Waiohua has potential commercial interest in any properties that council deems surplus to service requirements. Their representative has additionally stated that due to the cost of land in Auckland it would be important for council to consider discounted rates for land sales to iwi to enable displaced iwi to live in their rohe.

vi) Ngati Paoa

Ngati Paoa expressed potential commercial interest in this property.

General

71. This site is not subject to s40 Public Works Act 1981 offer back requirements.

72. This property are not one of council’s strategic assets to which the significance policy would apply.

73. Capital receipts from the sale and redevelopment of these properties will contribute towards council’s budget for asset sales that is incorporated into the council’s debt and interest projections. If the council’s asset sales budgets are not met, then debt and interest costs will increase relative to budget.

Implementation Issues

None.

90 Smales and 90A Smales Road, East Tamaki

Summary

74. The subject sites are both triangular-shaped, near-level sections of vacant land that are located within a relatively new development of residential housing (refer to images in Attachment A). These sites were transferred to Manukau City Council in 2002 as part of a road stopping and realignment project known as the East Tamaki Corridor Arterial Route. The road stopping and realignment was undertaken in combination with the residential development of the adjoining land. The original intention for these properties was for each section to be amalgamated with a piece of the original road that was to be stopped, creating two sections of marketable size. ACPL are working with Auckland Transport on attending to the road stopping.

75. The rationalisation process commenced in July 2013. No Expressions of Interest were received.

76. The EOI process provided the Maori and Strategy Relations team the opportunity to flag any issue that is of particular relevance to Maori. The Heritage Unit was also invited through the EOI process to flag any particular archaeological merit. Neither party has flagged any relevant issues.

77. Given there was no request to retain these sites for a service need, they are on the face of it surplus and as such we recommend that the sites be sold.

78. Once the resolution to sell is confirmed the next phase of the disposal process is to prepare the land for sale. This involves a robust ‘add value’ assessment by ACPL, so council can be sure to maximize its returns where possible. A commercially sound add value/sales strategy will be developed and endorsed by the ACPL Board, then implemented by ACPL.

Local Board Views

79. The Howick Local Board confirmed that it supports our recommendation for disposal of these sites.

Maori Impact Statement

80. Eleven iwi authorities were contacted around the potential sale of 90 & 90A Smales Road, East Tamaki. The following feedback was received.

i) Ngati Whatua o Orakei

Ngati Whatua o Orakei has no commercial interest in this property.

ii) Te Akitai Waiohua

Te Akitai Waiohua has potential commercial interest in any properties that council deems surplus to service requirements.

iii) Ngati Te Ata Waiohua

iv) Ngati Te Ata Waiohua

Waikato-Tainui confirms this land does not hold any specific cultural significance to Waikato-Tainui. They confirm potential commercial interest in any properties that council deems surplus to service requirements. They additionally note that they support the settlement aspirations of Ngati Tamaoho and Te Akitai.

General

81. The subject sites were acquired pursuant to an agreement under the Public Works Act 1981.

82. The properties are not one of council’s strategic assets to which the significance policy would apply.

83. Capital receipts from the sale and redevelopment of these properties will contribute towards council’s budget for asset sales that is incorporated into the council’s debt and interest projections. If the council’s asset sales budgets are not met, then debt and interest costs will increase relative to budget.

Implementation Issues

84. ACPL is working with Auckland Transport in respect of the road stopping.

1815, 1817 and 1823 Great North Road, Avondale

Summary

85. The subject sites are located within the Highbury Triangle near the Great North Road and Ash Street junction in Avondale (refer to images in Attachment A). 1815 and 1823 Great North Road are vacant sites. 1817 Great North Road is a tenanted residential property. These properties were originally purchased in the early 1970s by the Auckland Regional Authority for the planned Avondale-New Lynn Bypass. Approximately 930m² was taken off the original lots for roading purposes. The residual land was then transferred to Auckland City Council. The sites were retained to possibly use for the SH20 extension through Avondale but are no longer required for their intended infrastructure use.

86. The rationalisation process commenced in July 2013. An EOI from Strategy and Planning, Auckland Transport was received. This EOI raised the possibility of retaining 3.5 meters of frontage of these sites for the potential widening of the Great North Road corridor in the future. Our Development team has advised that should this occur, it would not impact upon any potential development of these sites.

87. The EOI process provided the Maori and Strategy Relations team the opportunity to flag any issue that is of particular relevance to Maori. The Heritage Unit was also invited through the EOI process to flag any particular archaeological merit. Neither party has flagged any relevant issues.

88. Given there was no request to retain these sites for a service need, they are on the face of it surplus and as such we recommend that the sites be sold. If approved for sale, this property will be sold on the open market as is, subject to section 40 offer back requirements. Our Development team advised that the subject sites would be well-received in the current market and they would expect strong interest in the property from developers for housing. Our Development team will undertake the sales process for these prominent sites in a manner that maximizes the opportunities to achieve quality urban design outcomes.

Local Board Views

89. The Whau Local Board do not oppose disposal of these sites but would like documents calling for external expressions of interest for these sites to reflect the direction of the Avondale Master Plan, and for the board to be given the opportunity to have input into the expressions of interest sought. Furthermore, the Whau Local Board has requested that a strip be taken from rear of the three sites to increase green space / buffer along Ash Street to north-west to strengthen connection between Peace and Tait Parks.

Maori Impact Statement

90. Six iwi authorities were contacted around the potential sale of 1815, 1817 & 1823 Great North Road, Avondale. The following feedback was received.

i) Ngati Whatua o Orakei

Ngati Whatua o Orakei has potential commercial interest in this property.

ii) Ngati Whatua o Kaipara

Ngati Whatua o Kaipara has potential commercial interest in any properties that council deems surplus to service requirements.

iii) Te Kawerau a Maki

Te Kawerau a Maki has potential commercial interest in any properties that council deems surplus to service requirements.

iv) Ngati Te Ata Waiohua

General

91. These sites are subject to section 40 of the Public Works Act 1981 offer back requirements.

92. These properties are not one of the Council’s strategic assets to which the significance policy would apply.

93. Capital receipts from the sale and redevelopment of these properties will contribute towards council’s budget for asset sales that is incorporated into the council’s debt and interest projections. If the council’s asset sales budgets are not met, then debt and interest costs will increase relative to budget.

Implementation Issues

94. These sites are currently in the pre-1944 demolition control overlay in the draft Unitary Plan. The age of the house at 1817 Great North Road would need to be established to ascertain if this potential new rule may apply.

95. There is one notable tree (macrocarpa) on the 1815 Great North Road property that is scheduled in the Auckland Council District Plan (Auckland City Council – Isthmus Section).

25A Verran Road, North Shore

Summary

96. The subject site is a 1,533m2 vacant residential property that is currently administered by ACPL (refer to images in Attachment A). The site has no formed vehicular access. The property has frontage onto West Glade Crescent but is separated from the carriageway by a seven metre high bank topped with mature acacia melanoxylon trees. There is no other road frontage and if access could not be granted via West Glade Crescent, it would have to be obtained across an adjoining private property. This site was vested as road reserve in the Borough of Birkenhead (“BoB”) in 1952. The property was transferred from BoB to the North Shore City Council (“NSCC”) in 1992. NSCC subsequently resolved to revoke the reservation as road reserve and dispose of the site. NSCC began negotiations to sell this site to an adjoining landowner in 1992 but these negotiations were never concluded.

97. The rationalisation process commenced in May 2013. No EOI’s were received.

98. The EOI process provided the Maori and Strategy Relations team the opportunity to flag any issue that is of particular relevance to Maori. The Heritage Unit was also invited through the EOI process to flag any particular archaeological merit. Neither party has flagged any relevant issues.

99. Given there was no request to retain this site for a service need, it appears to be surplus and as such we recommend that the sites be sold.

100. Once the resolution to sell is confirmed the next phase of the disposal process is to prepare the land for sale. This involves a robust ‘add value’ assessment by ACPL, so council can be sure to maximise its returns where possible. A commercially sound add value/sales strategy will be developed and endorsed by the ACPL Board, then implemented by ACPL.

Local Board Views

101. The Kaipatiki Local Board confirmed it does not oppose the proposed disposal of this site.

Maori Impact Statement

102. Twelve iwi authorities were contacted around the potential sale of 25A Verran Road, Birkenhead. The following feedback was received.

v) Ngati Whatua o Orakei

Ngati Whatua o Orakei has no commercial interest in this property.

vi) Ngati Whatua o Kaipara

Ngati Whatua o Kaipara has potential commercial interest in any properties that council deems surplus to service requirements.

vii) Te Kawerau a Maki

Te Kawerau a Maki has potential commercial interest in any properties that council deems surplus to service requirements.

viii) Ngai Tai ki Tamaki

Ngait Tai ki Tamaki has no specific cultural significance considerations to raise in relation to this site.

ix) Ngati Te Ata Waiohua

General

103. The subject site is not subject to s40 Public Works Act 1981 offer back requirements.

104. This property is not one of the council’s strategic assets to which the significance policy would apply.

105. Capital receipts from the sale and redevelopment of these properties will contribute towards council’s budget for asset sales that is incorporated into the council’s debt and interest projections. If the council’s asset sales budgets are not met, then debt and interest costs will increase relative to budget.

Implementation Issues

106. Issues regarding vehicular access to the property would need to be worked through prior to any potential disposal of this site.

107. The gazette notice revoking the reservation as road reserve and declaring that the site may be disposed of specified that proceeds from the disposal by NSCC at current market value are to be paid into the NSCC’s reserves account and used towards the improvement of other reserves or put towards the purchase of other land for reserves. Advice will need to be sought on this prior to any potential disposal of this site.

24-26 Racecourse Parade, Avondale

Summary

108. The subject sites cumulatively comprise a 3498m2 section that is adjacent to Avondale Racecourse (refer to images in Attachment A). 24 Racecourse Parade is a narrow, rectangular shaped front lot. Improvements include a freestanding 1920s bungalow, a garage and a shed to the rear of the dwelling. 26 Racecourse Parade adjoins Avondale Central Reserve and is a narrow, rectangular shaped front lot with a slightly angled rear boundary. Improvements include a cobbled front yard and a 1920s building that was rebuilt and extended during the 1970s and 1980s and houses clubrooms and changing rooms.

109. Auckland City Council (“ACC”) resolved to acquire these sites from Suburbs Rugby Football Club (“SRFC”) in September 2010. The intended purpose in acquiring these sites was for town centre car parking, development of the site with the adjoining Housing New Zealand (“HNZ”) block of terraced houses, retaining the site for future urban development opportunities or using the site for active recreation purposes by amalgamating with the netball court land and possibly the Avondale racetrack land.

110. A sale and purchase agreement dated 14 October 2010 was entered into between SRFC and ACC. The settlement date set out in this agreement was 20 working days after the agreement became unconditional. On 1 November 2010, Auckland Council replaced the existing ACC and seven other legacy councils and the new Auckland Council was operational at the time of settlement. Given the timeframes in which settlement occurred, ACC’s decision to purchase these sites was confirmed by the Auckland Transition Authority on 12 October 2010. The sale and purchase agreement entered into between SRFC and ACC stated that these sites were not being acquired for any public work purpose, and accordingly a deed of waiver was entered into between the parties whereby SRFC waived its rights under s40 of the Public Works Act.

111. The rationalisation process commenced in February 2013. No EOI’s were received.

112. The EOI process provided the Maori and Strategy Relations team the opportunity to flag any issue that is of particular relevance to Maori. The Heritage Unit was also invited through the EOI process to flag any particular archaeological merit. Neither party has flagged any relevant issues.

113. The results of the rationalisation process indicate that this property is not required for current or future service requirements and as such we recommend that these sites be sold.

114. While these sites have been taken through the rationalisation process, our Development team has simultaneously undertaken work on the development potential of these sites. The Avondale Town Centre Action Plan and a master planning exercise identified these sites for higher density housing. Our Development team’s preference was to undertake a housing development in conjunction with the redevelopment of the adjacent Housing New Zealand (“HNZ”) site. However, in October 2013 HNZ decided not to support the redevelopment of their adjacent site. Given the viability of using these sites for housing, our Development team is continuing to progress their plans for the sites. The Development team has subsequently initiated a revised strategy that sees the development of these sites for terraced housing. The Development team consider this may act as a catalyst that encourages further development around the Avondale town centre.

Local Board Views

115. The Whau Local Board are opposed to the proposed disposal of this site pending consideration of the service needs for the community centre, library, open space, leisure activities and roading network through the Avondale Transformation Programme and the Whau community and recreation facility needs assessment.

116. ACPL’s response to the WLB’s feedback is set out below.

i) ACPL sought EOIs from a wide stakeholder audience across council and the CCOs to establish if these properties are needed for a future funded project or must be retained for a strategic purpose. No EOIs were received which indicates council departments do not support these properties being retained for future service needs or a strategic purpose.

ii) The Avondale Town Centre Action Plan and a master planning exercise identified these sites for higher density housing. Alternative sites nearby were identified for service purposes.

iii) There is no funding available for additional services on these sites.

iv) The sale and purchase agreement between ACC and SRFC acknowledged these sites would not be used for a public works purpose.

Maori Impact Statement

117. Six iwi authorities were contacted around the potential sale of 24 - 26 Racecourse Parade, Avondale. The following feedback was received.

i) Ngati Whatua o Orakei

Ngati Whatua o Orakei expressed potential commercial interest in this property.

ii) Ngati Whatua o Kaipara

Ngati Whatua o Kaipara expressed potential commercial interest in all properties with residential development potential.

iii) Te Kawerau a Maki

Te Kawerau a Maki has expressed potential commercial interest in any properties that council deems surplus to service requirements.

iv) Te Akitai - Waiohua

Te Akitai Waiohua has expressed potential commercial interest in any properties that council deems surplus to service requirements.

v) Ngati Te Ata Waiohua

General

118. Given a deed of waiver was entered into between the parties whereby SRFC waived its rights under s40 of the Public Works Act 1981, these sites are not subject to s40 Public Works Act 1981 offer back requirements.

119. These properties are not one of council’s strategic assets to which the significance policy would apply.

120. Capital receipts from the sale and redevelopment of these properties will contribute towards council’s budget for asset sales that is incorporated into the council’s debt and interest projections. If the council’s asset sales budgets are not met, then debt and interest costs will increase relative to budget.

Implementation Issues

121. Once the resolution to sell is confirmed the next phase of the development process is to prepare the land for development. This will involve ACPL’s Development team arranging for the procurement and demolition of the existing buildings on the sites to enable the site to be cleared. Following this, ACPL’s Development team will go out to the market for Expressions of Interest and Requests for Proposals. ACPL will keep the WLB informed as this is progressed.

34 Moore Street, Howick

Summary

122. The site is comprised of a 3754m² commercial property zoned Business 4 (refer to images in Attachment A). The improvements comprise a mix of tar sealed car parking and driveway areas along with a number of relocatable single level buildings. The site has a capital value of $3,000,000. This site was purchased in the 1970’s and was formerly host to the Howick Borough Council offices. When this use was no longer relevant the site was leased out on a non service commercial basis from approximately 1995 onwards. NZ Police was the incumbent tenant, however it vacated a large part of site in mid 2012 upon completion of its new premises in East Tamaki. NZ Police do however continue to lease the rear part of the site for their community constable.

123. The consultation process for this property commenced in mid 2011. No EOI’s were received and there has not been any internal department interest in retaining these sites. With no request to retain the sites from any council department for a service need, ACPL then progressed through to the local board engagement phase.

124. The EOI process provided the Maori and Strategy Relations team the opportunity to flag any issue that is of particular relevance to Maori. The Heritage Unit was also invited through the EOI process to flag any particular archaeological merit. Neither party has flagged any relevant issues.

125. The Howick Local Board (“HLB”) is opposed to the disposal of this site. The views of the HLB are set out below.

126. This site was presented to the Strategy and Finance Committee (S&FC) on 4 July 2013. S&FC resolved that this site be withdrawn from sale for two months pending further discussions with the HLB.

127. Community Policy and Planning (“CPP”), Community Facilities (“CF”) and the PRSG consider that there is not a sufficient financial analysis or an evidence-based service rationale for retaining 34 Moore Street. Given there is no evidenced-based rationale to retain this site for a service need, it is on the face of it surplus and as such, we continue to recommend disposal of this site.

128. Our Disposal’s team have advised that should this site be sold, in the current market they would expect strong interest in the property from owner-occupiers, investors and developers. There has been considerable interest from a number of parties in this property. ACPL can keep the HLB informed about identifying an appropriate purchase for the site.

Local Board Views

129. The Howick Local Board (“HLB”) is opposed to the disposal of this site and would like it retained for community use.

130. At ACPL’s first visit to the HLB in February 2012, the HLB indicated that it opposed the proposed sale of the property and asked officers investigate transferring the property back to the service portfolio. The HLB suggested using this site for the temporary relocation of the Uxbridge Creative Arts Centre, or toward the general need for community facilities in the area, or retaining until after the Howick Village Master Plan is completed.

131. The HLB prepared a draft business case in support of retaining this site. The business case was reviewed by the Portfolio Review Steering Group (“PRSG”), a cross-council senior management group, in November 2012. The PRSG recorded that the business case lacked sufficient financial analysis and an evidenced based rationale to support retention of the property. More time was offered to the HLB to add information to the business case.

132. The final version of the HLB’s business case was submitted in December 2012. The business case requested that disposal of this property be postponed until after the Howick Village Master Plan was completed and considered in 2013/2014. The HLB reiterated its view that this site could not be considered in isolation to the development of a Howick Village Master Plan. The HLB were also of the view that there was an unmet need in the short to medium term in the provision of community lease facilities and saw this building as a low cost solution to this need. Senior council staff considered the business case and found it still lacked sufficient financial analysis and an evidenced based rationale to support retention of the property.

133. This property was considered by the S&FC at its 4 July 2013 meeting. The S&FC resolved that this site be withdrawn from sale for two months pending further discussions with the HLB. Following this resolution, ACPL, CPP and CF have continued working with the HLB. The HLB prepared an updated business case (refer to Attachment B) supporting the retention of 34 Moore Street. This business case stated that 34 Moore Street should be retained due to service needs and community demand in the area, and to meet the needs for community leases. The business case also argued the site should be retained as vacant until future needs are determined, and stated that the HLB is willing to re-prioritise its budgets to meet costs, and negotiate any increase in its budget for that purpose through the Long Term Plan process.

134. CF reviewed the updated business case submitted by the HLB and found that the HLB area already has a substantial portfolio of community facilities and that the Community Facilities portfolio is currently operating to achieve maximum performance. CF found that while the Howick area has fewer venues for hire, it has slightly more Community Centres per head of population than the Local Board average. Community Facilities’ advice to the HLB is not to acquire additional property into its current Community Facilities portfolio but instead to review its existing portfolio to determine how to derive greater community benefit from the substantial capital investment already available.

135. CPP reviewed the updated business case submitted by the HLB. CPP’s view was that while there may be an existing need from the Howick community for cheap community space, it is not apparent that council should procure a new facility to meet that need without some form of agreed level of service across Auckland. CPP also noted that council is investing in the Uxbridge Arts Centre in Howick to provide better community facilities in the area.

136. Our Development team reviewed the HLB’s business case and undertook preliminary investigations into retrofitting the site at 34 Moore Street. Preliminary investigations indicate that it is financially unfeasible to retrofit this property as the principal building is presently divided into numerous rooms and areas which would require a significant amount of funding to create a user-friendly community facility.

137. The PRSG also reviewed the HLB’s updated business case and consider there is no evidenced-based service rationale for the retention of this site.

Maori Impact Statement

138. Eleven iwi authorities were contacted regarding the potential sale of 34 Moore Street, Howick. The following feedback was received.

i) Ngati Whatua o Orakei

Ngati Whatua o Orakei does not have any particular issues of cultural significance to raise about this property and expressed potential commercial interest.

ii) Te Kawerau Iwi Tribal Authority

Te Kawerau a Maki expressed the general cultural relevance of property to their Iwi and expressed potential commercial interest.

iii) Ngati Tamaoho Trust

Ngati Tamaoho has no specific issues of cultural significance to raise about this property.

iv) Te Ara Ranatu o Te Iwi o Ngati Te Ata Waiohua Incorporated

The Ngati Te Ata stakeholder contact states that they are unhappy with council process/policies in that council owned properties are considered outside of treaty settlement processes and requests some attention to redressing treaty violations, possibly via preferential sale agreements at reduced rates.

v) Ngati Paoa Trust

Ngati Paoa has no specific issues of cultural significance to raise around this property but expressed potential commercial interest.

General

139. Advice from Council’s Statutory and Technical Team regarding a section 40 Public Works Act offer back for this property is pending. Initial advice however is that an offer back requirement is unlikely.

140. This property is not one of the Council’s strategic assets to which the significance policy would apply.

141. Capital receipts from the sale and redevelopment of these properties will contribute towards council’s budget for asset sales that is incorporated into the council’s debt and interest projections. If the council’s asset sales budgets are not met, then debt and interest costs will increase relative to budget.

142. Once the resolution to sell is confirmed the next phase of the disposal process is to prepare the land for sale. This involves a robust ‘add value’ assessment by ACPL, so council can be sure to maximise its returns where possible. Once a commercially sound add value/sales strategy is developed and endorsed by the ACPL Board then staff will implement it. ACPL will keep the HLB informed as the sales strategy is developed.

Implementation Issues

143. None

199, 203, 207, 211, 215 and 219 Cavendish Drive and 56 Clendon Avenue, Manukau Central

Summary

144. A group of 18 properties in Cavendish Drive and Clendon Avenue, Manukau were acquired for the Cavendish Link Project. This project involved the construction of an underpass beneath the railway to connect Liverpool Avenue with Nesdale Avenue. Following completion of the work Auckland Transport declared the sites to be surplus.

145. The properties identified in purple in Attachment A were presented to the Strategy and Finance Committee (“S&FC”) in July 2013. The Ōtara-Papatoetoe Local Board (“OPLB”) opposed disposal of 199, 203, 207, 211, 215 and 219 Cavendish Drive and 56 Clendon Avenue, Manukau (circled in red in Attachment A). The S&FC resolved to withdraw the subject sites at from consideration for sale for two months pending further discussions with the Ōtara-Papatoetoe Local Board (“OPLB”). The S&FC resolved to dispose of the balance of the properties.

146. Following the S&FC resolution, issues arose with the site at 199 Cavendish Drive due to the owner of a neighbouring property erroneously assuming land owner consent and constructing a right of way on the land at 199 Cavendish Drive. The landowner is seeking a financial contribution from council in recognition of the shared use of the right of way. ACPL is working with Auckland Transport to resolve the issues at 199 Cavendish Drive.

147. The subject sites to be considered now by the Finance & Performance Committee are co-located and form a contiguous parcel along the northern side of Cavendish Drive. These sites (referred to on the map in Attachment A as the ‘Redevelopment Site’) form a suitable site for a mixed use development. These sites are zoned Business 5 under the Manukau City Council District Plan and Light Industrial under the Unitary Plan.

148. ACPL commenced the consultation process for the properties in April 2013. No EOI’s were received from any Council Department during the EOI timeframe and the sites were internally cleared of any current or future service needs.

149. The OPLB have submitted a business case (refer to Attachment C) advocating the retention of the subject sites. CPP, Community Facilities, ACPD, City Transformations and the PRSG reviewed the business case and did consider there was an evidence-based rationale to retain the subject sites.

150. Given there is no evidenced-based rationale or budget to retain these sites for a service need, they are on the face of it surplus and as such, we continue to recommend disposal of this site.

151. We recommend any resolution to sell the site at 199 Cavendish Drive be subject to ACPL and Auckland Transport resolving the shared use issues with an adjoining land owner.

152. If a resolution to sell is confirmed the next phase of the process would be to prepare the land for sale. This involves a robust ‘add value’ assessment by ACPL, so council can be sure to maximise its returns where possible. Once a commercially sound add-value/sales strategy is developed it will be endorsed by the ACPL Board and then implemented.

Local Board Views

153. The OPLB are opposed to the proposed disposal of these sites and would like them retained for displaced community organisations and new community organisations who were seeking council land on which to develop facilities.

154. When ACPL first met with the OPLB, it initially advised that it wanted these sites retained for displaced community organisations and new community organisations who were seeking council land on which to develop facilities. OPLB also advised it had been approached by other community groups expressing interest in leasing land to provide for the community and social needs of the area. The OPLB specifically advised that two current Council community tenants, Gym City (Papatoetoe) and Papatoetoe Roller Skating were going to be displaced during the re-vitalisation of the St George Street commercial area in Old Papatoetoe. The OPLB hoped to mitigate this displacement by retaining and developing the subject sites.

155. The OPLB provided a business case that advocated retaining the subject sites for existing displaced community organizations (such as Gym City), and new community organisations and services which were seeking Council land on which to develop facilities. The business case stated that no financial provision has been put aside in the current LTP to build such facilities in this area and that the OPLB were awaiting the outcome of the OPLB Area Spatial Planning process which was due to begin in 2013-2014. OPLB stated that retaining the subject properties will enable the OPLB to explore the potential for public-private partnerships and to meet the directions of the Auckland Plan. The OPLB is of the opinion that the sale of the subject sites prior to the spatial planning and community development strategy process would pre-empt the opportunity to address future needs, and has the potential to worsen existing deprivation in the south.

156. CPP assisted the OPLB with their business case. CPP was not able to provide an evidenced based rationale to retain these properties.

157. CF stated that it does not have a need to retain the subject sites for inclusion in the Community Facilities portfolio.

158. Auckland Council Property Department (“ACPD”) reviewed the business case and advised that in the absence of a robust financial analysis and an evidenced based rationale to retain these properties, that the properties should be reported to the Governing Body for decision.

159. Following the S&FC resolution to withdraw the subject sites from sale consideration, further work and discussions have been undertaken by ACPL and OPLB. The OPLB chose not to update its business case, and ACPL has continued to progress matters with the exiting business case.

160. Our Development team have worked with the OPLB in respect of the subject sites and the possibility of rehousing Gym City. The Development team has advised that there is no budget available to rehouse Gym City or to retain the subject sites. The Development team further advise that the Built Environment Unit, which undertook an assessment of the sites, consider that the subject sites lacked suitability for use by a community centre.

161. In February 2014 the OPLB’s business case was tabled at the PRSG. The PRSG did not support retention of the subject sites and found that the OPLB area is well provisioned for community services. It was agreed that this property should be re-submitted to the Strategy and Finance Committee.

Maori Impact Statement

162. Twelve iwi authorities were contacted regarding the potential sale of these properties. The following feedback was received.

i) Ngati Whatua o Orakei

Ngati Whatua o Orakei does not have any particular issues of cultural significance to raise about these properties but has potential commercial interest in all Cavendish Drive properties.

ii) Te Kawerau Iwi Tribal Authority

Te Kawerau Iwi Tribal Authority expressed the general cultural relevance of this property to their Iwi and expressed potential commercial interest.

iii) Te Akitai – Waiohua / Pukaki Maori Marae

Te Akitai – Waiohua expressed the general cultural relevance of these properties to their iwi and expressed potential commercial interest in the properties. A site visit was attended on 10 June at which Te Akitai discussed aspirations in the Manukau area and concern around whether they would be able to adequately evaluate their interest in this property opportunity within necessary timeframes. ACPL committed to assisting Te Akitai by setting a mutually agreed timeframe for evaluation of the development opportunity should the iwi decide to progress with such an evaluation. Te Akitai was not ready to progress with that kind of evaluation in 2013, however ACPL is keeping Te Akitai in the loop as the Rationalisation Process progresses in order that they may reconnect with the opportunity in the future if desired.

iv) Te Ara Rangatu o Te Iwi o Ngati Te Ata-Waiohua Inc

Te Ara Rangatu o Te Iwi o Ngati Te Ata – Waiohua Inc expressed the general cultural relevance of these properties to their iwi and expressed potential commercial interest in the properties. A site visit was attended on 29 June to which Ngati Te Ata brought a developer to evaluate Ngati Te Ata’s interest in the site. The developer confirmed that the site was not suitable for delivery of Ngati Te Ata aspirations.

v) Ngati Paoa Trust

Ngati Paoa Trust does not have any particular issues of cultural significance to raise about these properties but expressed potential commercial interest in all properties in this batch.

vi) Waikato – Tainui Te Kauhanga

Waikato – Tainui Te Kauhanga does not have any particular issues of cultural significance to raise about these properties but has potential commercial interest in all properties in this batch.

General

163. Capital receipts from the sale of these properties will contribute towards council’s budget for asset sales that is incorporated into the council’s debt and interest projections. If the council’s asset sales budgets are not met, then debt and interest costs will increase relative to budget.

164. These properties are not considered strategic assets to which the Significance Policy would apply. Nor do they trigger the general determining factors on decision making set out in the LGA and Auckland Council’s Significance Policy and the requirement to consult under the provisions of the Local Government Act 2002.

Implementation Issues

165. None

Attachments

No.	Title	Page
a View	Property Images	27
b View	Howick Local Board’s business case for 34 Moore Street, Howick	39
c View	Otara-Papatoetoe Local Board’s business case for 199, 203, 207, 211, 215 and 219 Cavendish Drive and 56 Clendon Avenue, Manukau	51

Signatories

Authors

Letitia McColl, Senior Engagement Advisor, Portfolio Review, Auckland Council Property Limited

Authorisers

David Rankin, Chief Executive, Auckland Council Property Limited

Ian Wheeler - Manager Property

Andrew McKenzie - Chief Finance Officer

Finance and Performance Committee

16 April 2014

Asset Rationalisation: Departmental Business Case (for Retention of Council Property)

Council Property	34 Moore Street, Howick
Business Unit/ Department/ Division	Howick Local Board
Departmental Manager	Teresa Turner, Relationship Manager – Howick/Franklin Local Boards

Table of Contents

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· 1.0 Introduction.. 3

a) 1.1.............................................................................................................................. Purpose. 3

b) 1.2....................................................................................................................... Background. 3

c)1.3 Reason for Involvement 4

· 2.0 Potential Service Delivery Capacity. 6

d) 2.1........................................................................................................................... Rationale. 6

e) 2.2.............................................................................................. Benefits to the community. 6

f) 2.3 Potential Disadvantages. 7

a) 2.4.............................................................................................................................. Risks. 7

b) 2.5............................................................................................................................ Issues. 7

g) 2.6..................................................................................................................... Assumptions. 7

h) 2.7.................................................................................................................. Dependencies. 8

· 3.0 Other Options/Solutions Considered. 8

i) 3.1 Options. 8

j) 3.2 Preferred Option.. 8

· 4.0 Financial Impact 8

· 5.0 Approval 9

· 6.0 Appendix. 10

1.0
Introduction

1.1 Purpose

1.1.1 This report sets out the Howick Local Board’s case for retention of 34 Moore Street, Howick.

1.2 Background

1.2.1 Auckland Property Limited (ACPL) has identified 34 Moore Street, Howick as suitable for disposal due to the lack of a compelling business case for retention. The sale will help meet ACPL’s target of $100 million of capital receipts from the sale of property, thus allowing council to meet its future funding needs more efficiently.

1.2.2 The property is iconic to the local community. The land was purchased as part of creating a Howick civic centre, and the buildings were originally built and occupied by the Howick Borough Council, and more recently as the local police station.

1.2.3 ACPL first engaged with the Howick Local Board in February 2012 and advised the Board of its intention to sell the property. Since that time, and despite a number of subsequent discussions, the Board has strongly opposed the sale. The Board believes that the property should be retained in council ownership and converted to community use.

1.2.4 The Strategy and Finance Committee considered ACPL’s disposal recommendation report on the 4th of July 2013 and resolved that the property be withdrawn from sale pending further discussions with the Local Board (Resolution number SF/2013/66).

1.2.5 A final determination is still needed from the Governing Body on whether to retain or dispose of the property.

1.2.6 Property Information

	34 Moore Street
Legal Description	Lot 2 DP 91111 & Lot 3 DP 91111 & Lot 4 DP 91111
Area	0.3954 hectares
Capital value	$3,000,000
Land value	$1,550,000
Zoning	Business 4
Current use	Vacant
2012/13 Total rates (GST incl.)	$27,158.40

Executive Summary of the Board’s case to retain 34 Moore Street

1.2.7 Under council’s property strategy, property should only be retained where there is current or future service needs. The Board has found community demand for leases at 34 Moore Street. The conclusion that there is no current service need for the property is therefore unsupported by fact. The picture of future needs will be determined through the Community Facilities Network Plan and the Howick Village Master Plan. Without these, conclusions on future need, and whether 34 Moore Street should or could be used to meet that future need, cannot be made with any degree of accuracy.

1.2.8 The Board believes it is viable to either immediately turn the property into community leases to meet current needs, or retain the property as vacant until future needs are determined. There are advantages and disadvantages to either of these approaches.

1.2.9 The actual costs of transferring the property into community use will depend on the mix of tenants. The Board has not engaged with possible user groups to avoid raising expectations. The Board is willing to re-prioritise its budgets where necessary to meet costs, and negotiate any increase in its budget for that purpose through the Long Term Plan process.

1.2.10 The Board acknowledges that the retention of the property would put pressure on council’s ability to release capital from its property portfolio. However, there are likely to be more suitable properties for disposal where no current of future service needs genuinely exist.

1.3 Reason for Involvement

1.3.1 The Howick Local Board believes that the sale of 34 Moore Street should not proceed at this time for three key reasons:

1) The property can be used to meet existing community needs

2) The decision to sell is being made on the basis of imperfect or incomplete information which would frustrate or render meaningless the outcomes of current or planned projects that have been endorsed by the Governing Body

3) The Local Board is willing to re-prioritise or re-allocate its budgets as necessary to subsidise the operating costs of the facility.

1) Existing Community Needs

1.3.2 The Board believes that there are a number of community groups that would benefit from turning the building into a mixture of community leases and bookable spaces. It should be noted that council has not historically kept records of the level of unmet demand for community leases through a waiting list for the Howick area.

1.3.3 The report to the Strategy and Finance Committee in July 2013 noted that there were up to six community groups who would be interested in using the facility if it was available. As a result of the Committee’s request for further information, the Local Board commissioned further work to identify possible community demand for the facility.

1.3.4 A survey of community groups was conducted and a reported prepared for the Board on the needs of community groups in the area (the report is attached as Appendix A). It should be noted that this survey was not as comprehensive as a community engagement and consultation process due to considerations relating to time, resourcing and the need to avoid raising community expectations regarding an opportunity for a lease. There were 32 participants in the survey and the main findings were:

i) 65 percent indicated their requirements were likely to increase during the next 2-5 years

ii) 63 percent indicated an interest in co-locating at either 34 Moore Street or 16 Fencible Drive

iii) Key needs identified include:

a. Offices – some groups operate from their homes and have inadequate office space

b. Public and group meeting rooms

c. Space for programme delivery

d. Space for delivering clinical services, e.g. counselling

e. Activity spaces – exercise/recreation activities, exhibition spaces etc.

f. Secure storage for key community assets such as the Crimewatch Patrol vehicles

1.3.5 The Board believes the findings above identify an unmet need in the community that can be addressed by converting 34 Moore Street into a community facility. It is acknowledged that it may not be advisable or feasible for council to meet all demands for community space. However, the Board believes the readily available opportunity presented by 34 Moore Street (rather than the expense and time in commissioning a new facility), the fact that no new community facility is planned for the Howick area, and for the further reasons outlined below, the transfer of 34 Moore Street into council’s community facility portfolio will have significant community benefits for Howick, and long term fiscal benefits for council.

1.3.6 Howick is also losing facilities such as Keall House which is being demolished as part of the Uxbridge redevelopment. This is likely to create additional demand for community facilities in the Howick Village.

1.3.7 The latest Facilities profile for the Howick Local Board (Attached as Appendix B) shows that:

i) Howick’s usage of hireable facilities at 53% is higher than the city-wide average of 43%. This does not however take into account leases, which is a key area of demand for Howick’s community groups.

ii) The most important consideration for customer satisfaction of a facility is a convenient central location. 34 Moore Street offers a convenient central location right in the heart of the Howick village.

2) Decision to Sell Based on Incomplete Information

1.3.8 Auckland Council’s property Strategy 2012 outlines council’s reasons for owning property which includes current and future service provision. The retention of 34 Moore Street would therefore be consistent with this strategy, where a known future service provision exists. However, work to determine that future service provision, which has been endorsed and resourced by council, is currently underway.

1.3.9 A Community Facilities Network Plan is currently underway that will understand current usage of council’s community and recreation facilities, and develop an evidentiary base to guide council’s investment decisions in the provision of community facilities across Auckland.

1.3.10 Although a property of the type and location of 34 Moore Street may not be a priority within the overall network in the final deliberation, to make a decision as if that is the case now is both premature and prove to be financially imprudent.

1.3.11 Council’s Property Strategy also states that “there are times when we hold property for the purpose of promoting or supporting urban regeneration and renewal”.

1.3.12 The Howick Local Board Plan has given the Board a clear mandate to prioritise planning for future growth that includes the development of the Howick Village Master Plan. The resourcing for this Master Plan has also been agreed with the Governing Body. A key aspect of this plan will be to identify opportunities for social and community infrastructure in the Howick Village to accommodate the projected growth. The Master Plan will be the blue-print for the regeneration and renewal of the Howick Village.

1.3.13 To support the Howick Village Master Plan, the Board has also commissioned work on community hubs, and is supportive of the likely service type, fiscal, and customer efficiencies that result from co-locating different groups within a community hub. 34 Moore Street offers a unique potential within the village to realise the Board’s aspirations of community hubs, and further test its feasibility as part of the Howick Village Master Plan. Again the sale of the property at this stage would remove the opportunity to even consider and test these concepts. The Master Plan will also give the Board a better opportunity to get the wider community involved in the future look of the village, including the use for 34 Moore Street, which has been very limited to date.

2.0 Potential Service Delivery Capacity

2.1 Rationale

2.1.1 There are two possible options for consideration at this time:

i) Convert the property to one or more community leases as soon as possible

ii) Retain in ACPL ownership as vacant property until the Master Plan and Community Facilities Network Plan is complete

Option 1 – Immediate conversion to community lease(s)

2.1.2 This option would allow the Board to immediately meet the identified demand in the community.

2.1.3 The Board’s business case to the Strategy and Finance Committee in July 2013 listed a number of groups that have approached the Board with inquiries about the availability of community leases in Howick. These include a mixture of volunteer groups who are likely to seek a peppercorn rental, and more established groups who may be able to pay a more substantial sum.

2.1.4 The configuration and size of 34 Moore Street would accommodate a number of different groups, and could allow for a mixture of rental rates.

2.1.5 The Board is unable to conclusively provide the number or nature of groups that could immediately occupy the site. That would require a transparent engagement and negotiation process with all interested lessees. The Board has sought to avoid a more detailed engagement process with interested parties due to the uncertain future of the property and to avoid raising expectations in the community. It is clear however that community demand will exceed available space on the site.

Option 2 – Retain as Vacant Property

2.1.6 Another option is to retain the property in a vacant state until further information is available through the Master Plan and the Network Plan. This would maintain the status quo.

2.2 Benefits to the community

2.2.1 The option to convert the property into community leases immediately would have obvious benefits to the local community groups who are in need of facilities. Some of these benefits include:

· allow groups to move their operations out of residential homes into a community facility

· a larger and more custom made space for community groups that would help them deliver a better service to the community

· the ability to co-locate with other groups, share resources, coordinate services and learn from each other will help with their own development

· provide an enclosed yard security for community assets such as patrol vehicles.

2.2.2 The building has a current warrant of fitness and compliance certificate which would presumably allow community occupancy immediately.

2.2.3 The engagement process with the community to determine the likely lessees will also be of benefit. It will help the Board determine the true nature of the need in the community, and assist in its planning to improve the use of existing facilities, and advocate to the Governing Body for new facilities, if needed.

2.2.4 The option to retain the property as a vacant site may not have any immediate community benefits as it would not allow for community use except in limited situations such as parking patrol vehicles on site. However, it would have some medium term benefits as the property could be used to meet any needs identified as part of the Master Plan or Community Facilities Network Plan. It would also allow the Board to determine the best use of the facility, if at all, based on clear evidence from the Community Facilities Network Plan and the Master Plan.

2.3 Potential Disadvantages

2.3.1 The main disadvantage of both of the options outlined above is the foregone proceeds of sale.

2.3.2 The disadvantages of the option of immediately converting the facility into community leases include:

· it would not take into account the information from the Community Facilities Network

Plan project which will provide better information to the Board about the profile of users

and non-users of community facilities across Howick, thus allowing the Board to make

more informed decisions on the best mix of uses/users for the facility.

· the Board loses the flexibility to respond to the outcomes of the Community Facilities

Network Plan or the Village Master Plan which may suggest other uses for the facility

or even the lack of the need for the property, without disrupting the lessees.

· community expectations for the property to be retained in the future will be high even if a case cannot be made for retention.

2.3.3 The disadvantages of the option to retain as a vacant site include:

· forgoing the benefits outlined above from converting the property into community

leases

· forgoing lease income that would either help meet the costs of managing and

maintaining the facility.

2.3.4 Although some security measures may be needed to prevent vandalism, significant deterioration or vandalism of the building is unlikely if left vacant.

2.4 Risks

2.4.1 A key risk if the property remains vacant is community dissatisfaction about the unmet needs. This would require management by the Board and will be addressed during community engagement on the Master Plan.

2.5 Issues

2.5.1 If the property is not disposed of, ACPL will need to find other properties from within its portfolio to dispose of to meet its targets. The market value of 34 Moore Street makes it an attractive target for disposal as it would go a long way to meeting council’s targets. However, the primary reason for disposal is where a property does not meet current or future service needs, which the Board believes is clearly not the case with this property at this time.

2.6 Assumptions

2.6.1 If the property is converted to community leases, the following assumptions apply:

· the demand for community leases remains strong

· the groups who have previously expressed a desire to lease the property are capable

of performing to council’s requirements

· the building is of a sufficient standard for community occupancy without major capital

refurbishment

2.6.2 If the property is retained as vacant, the assumptions are:

· the building will not deteriorate significantly, become a safety hazard or attract vandalism

2.7 Dependencies

2.7.1 The completion of the Community Facilities Network Plan and the Howick Village Master Plan on time and budget are critical dependencies.

3.0 Other Options/Solutions Considered

3.1 Options

3.1.1 A possible third option is a short-term commercial lease that would attract market rents and provide ACPL with revenue to offset the maintenance of the property. It would need to be relatively short term to allow the Board the flexibility to respond to identified community needs through the Master Plan or Community Facilities Network Plan.

3.1.2 This option was not considered feasible as commercial tenants need security of tenure. The building itself may also need significant modification to accommodate a commercial tenant. However, the Board is willing to support this option as long as it does not affect the Board’s ability to convert it into a community facility if such an outcome is clearly supported by the Network Plan and Master Plan.

3.2 Preferred Option

3.2.1 The Board supports either the immediate conversion of the property into community leases or retaining the property in a vacant state. The Board believes either option would allow the decision to either retain or dispose to be based on better quality information and ultimately result in better buy-in from the community if such an important asset is to be disposed of.

4.0 Financial Impact

4.1 ACPL has advised the Board that overhead costs of approximately $1000 a month to cover insurance, rates, electricity and security. These costs are currently being met by ACPL. If the property was to be retained by ACPL in a vacant state in the short term, the Board will expect ACPL to continue to meet these costs.

4.2 If the property was converted to community leases immediately, the following costs will apply:

· the overhead costs outlined above of approximately $1000 per month

· routine maintenance (approximately 0.5% to 3.5% of the value of the property) and capital renewal costs (approximately 1.5% to 4% of the value of the property)

· the costs (if any) to refurbish to bring the property to a tenantable standard, and any furniture costs.

4.3 As mentioned earlier, it is difficult to forecast the likely revenue from community leases. It would depend on the mix of tenants which is likely to include a combination of peppercorn rentals and more substantial amounts for more professional organisations.

4.4 The Community Development Arts and Culture Department are in the process of developing a calculator to forecast the likely operational and maintenance costs of new community facilities. This tool will take into account the size of the facility, the governance model (whether it is fully council owned and run, community governed etc.) and likely revenue, to forecast costs of a particular type of planned facility. It is anticipated that the tool will become available in February 2014. More detailed costs can therefore be presented to the Governing Body by the time the disposal of this property is considered again.

4.5 Council’s Revenue and Financing Policy assumes that up to 80% of the costs of local community facilities will be met from rates funding. Therefore it would be safe to assume that any return from tenants would only cover approximately 20% of the costs of facility. If the property is converted to community use, these costs will have to be met from the budgets under the control of the Howick Local Board.

4.4 Local Boards are funded to deliver services from its existing property portfolio. Any new facility without accompanying operational budgets would therefore put significant strain on the Board’s budgets. Converting 34 Moore Street to community use is essentially the same as procuring a new facility. In normal circumstances, the commissioning of a new facility would be accompanied with operational budgets for the Board. The Board has worked with its financial advisors and is confident that it can re-prioritise existing budgets to meet the overhead costs of $1000 per month if the property was transferred to the Board’s community facilities portfolio.

4.5 Where possible, the Board will re-prioritise its existing maintenance or renewals budgets to meet the costs relating to 34 Moore Street. Where these costs cannot be met from existing budgets, the Board will seek to either increase its revenue from its community facilities to help it meet these costs, or negotiate further funding with the Governing Body through the Long Term Plan process.

5.0 Approval

Departmental Manager	Teresa Turner
Name and Title	Relationship Manager – Howick/Franklin Local Board’s
Date	28 November 2013

6.0 Appendix

A. Consultant’s Report on Howick Local Board Community Needs Assessment.

B. Howick Local Board Facilities profile - June 2013.

Finance and Performance Committee

16 April 2014

Civic Administration Building

File No.: CP2014/06153

Purpose

1. To provide an update to committee members and to confirm the process to determine the future of the Civic Administration Building (Civic) before it becomes vacant in November 2014.

Executive Summary

2. Civic currently provides 16 floors of office accommodation for council. It also hosts key computer equipment, a customer service area, a staff cafeteria and training rooms, hearing rooms and councillor offices. The building will be vacated later in 2014 when staff and councillors relocate to 135 Albert Street.

3. Civic requires significant refurbishment if it is to provide a modern safe standard of building, irrespective of the intended future use. The typical floorplates are small with low floor to ceiling height. The building’s steel frame structure requires strengthening to meet acceptable earthquake code provisions and the prevalence of asbestos needs to be addressed. The building’s façade, an early attempt at curtain wall construction, requires either major refurbishment or replacement. In order to fully resolve these issues, a comprehensive remediation process would be required. This would effectively involve stripping the building to its steel skeleton structure and rebuilding. The cost of this has been estimated in the region of $70 million.

4. Acquiring 135 Albert Street delivered a range of benefits to council which included providing, amongst others, an alternative location for staff that needed to exit Civic and a beneficial impact on council’s accommodation budget in the long run.

5. Civic is an early example of high rise construction in NZ. The Heritage Advisory Panel considered a request to assess the building, and resolved that an up-to-date assessment of the heritage values of Civic be undertaken. Two consultant reports have suggested that the building warrants a Category A listing. Council’s Heritage unit has reviewed both reports and found that the building clearly merits heritage status as a category B building under the Proposed Auckland Unitary Plan (PAUP) criteria, with potential for category A, although more evidence would be required to support this latter rating.

6. The building currently has no heritage status. Auckland City Council did not consider the heritage value sufficient for the building to be scheduled in its District Plan. There are no existing planning constraints to refurbish, retrofit or demolish the building. However, a heritage categorisation is important in terms of how the building can be dealt with in the future. Category A listing will allow very little refurbishment work to take place, unless it is limited to carefully replacing building elements in a current form. Category B allows for more adaptive use and may also allow demolition as an option.

7. Adaptive reuse of the building would require a complete retrofit of the building leaving little original fabric of the interior of the building and much of the exterior curtain wall would have to be removed to access the areas where asbestos is still present. Refurbishing the building to a modern standard will result in the loss of heritage features. The extent of loss to heritage features would only be confirmed once the desired standard of modernisation was agreed.

8. Based on preliminary analysis, the high costs of refurbishment will significantly exceed the investment value of the building. This means the economically rational decision would be to demolish the building. However, this course of action does not take into account the heritage considerations of the building.

9. To determine whether the building is capable of future economic use, it is recommended that a market testing process is carried out to identify possible uses, approaches or solutions. The market process will test the appetite for private sector investment in refurbishing the building for nominated uses based on the preliminary assumption that the building may attain a Category B heritage status.

10. Parallel to the market testing process it is proposed that Regional Facilities Auckland (RFA) further develop concepts to respond to the opportunity that the Civic presents to develop its vision and plans for the Aotea Centre and its adjacent precinct. In this context an Aotea Development Framework (sponsored by the City Centre Integration Group) will also be undertaken to identify the longer term strategic objectives of the Council in respect of the wider civic precinct and the development and built form opportunities that the significant Council family ownership (approximately 10ha of land) presents in shaping this part of the central city.

11. The market testing and precinct planning opportunities will allow council to determine the future of the building with a complete picture of the options, costs and implications of the various decision paths.

Recommendations

That the Finance and Performance Committee:

a) Notes that council has no identifiable operational or service requirement for the Civic Building once it is vacated in late 2014.

b) Notes that Civic requires significant refurbishment to provide a modern safe standard of building, irrespective of the intended future use, to address structural and weather-tightness issues, the prevalence of asbestos and the dated building services.

c) Endorses Auckland Council Properties Limited (ACPL) leading engagement with the market to determine the level of market interest to refurbish Civic based on a possible heritage assessment of a Category B Heritage Place.

d) Notes that in addition to the market testing, Regional Facilities Auckland will develop concepts related to the future development opportunities around the Aotea Centre in conjunction with a wider Council Aotea Development Framework that coordinates the urban development and planning vision for the precinct.

e) Agree that following the market process, a report back will be completed that outlines the market response, the Regional Facilities Auckland concepts and precinct planning consideration, an update on any submissions to the Proposed Auckland Unitary Plan and the implications of these findings on the future options for the Civic Building.

Discussion

Background

12. Civic was designed in the mid-1950s with construction completed in 1966. The basement levels are constructed from reinforced concrete and the tower is essentially built in steel (including floors and structural walls) with an aluminium framed façade. The steel structure is uncommon and unusually flexible.

13. Civic and its car park occupy approximately 0.9 hectares of land, triangular in shape, on the corner of Mayoral Drive and Greys Avenue. The lettable area of levels ground to 18 totals 8,479m². It is currently used to provide 16 office floors and a ground floor customer services area. The two highest floors (L17 and L18) currently provide a cafeteria and training rooms. The basement contains council’s main data servers. The chillers for civic are adjacent to the building and also serve the Aotea Centre. There is also a transformer providing power to the Town Hall complex.

14. Apart from internal office refits and routine replacement of mechanical plant, the building has had no major refurbishment in recent years. Various physical condition issues, which are detailed below, present a risk that without major refurbishment the building will in the short-term become unsuitable for occupation by council or alternative users. This was a factor within council’s decision to consolidate at 135 Albert Street, Bledisloe House and Graham Street.

15. Notwithstanding the issues related to condition, the building has small floor areas which are not considered efficient for the office needs of larger modern organisations. Staff will be progressively relocated from Civic to 135 Albert Street in late 2014. Thereafter the building will be vacant. The annual cost to ‘moth ball’ the building has been estimated at around $350,000 and given it will be vacant, it is important that clarity is gained on the way forward as soon as possible.

Building Condition

16. The external façade is an early type of aluminium mullion curtain wall system. In general it is badly deteriorated and requires major and intrusive rectification works. This will require significant levels of new materials that affect the heritage value of the curtain wall.

17. Several significant building systems (parts of the air conditioning system, fire protection system and electrical system) require replacement in the short-term.

18. An Initial Evaluation Procedure (IEP) rated the building’s seismic strength at 100 per cent of the National Building Standards (NBS), but detailed structural modelling during 2013 rated the overall building at 62 per cent (earthquake risk) for normal office use. Upgrading the building to 67 per cent NBS could be achieved by relatively limited works including strengthening mezzanine floor columns and staircases columns. Achieving 100 per cent NBS would require much wider strengthening works and consultants have indicated this would probably be uneconomic as such works would be so extensive.

19. During 1989, an asbestos removal project was undertaken. This removed 350 tonnes of asbestos, but significant amounts remain in areas that were not practically accessible during the 1989 works. If a comprehensive removal programme is not undertaken, there is a risk of asbestos migrating through the building via the ventilation and cladding systems. Council currently monitors this health and safety risk at an annual cost of circa $50,000.

20. The office floor plates are narrow, relatively small by modern standards (453m² each) and have low floor to ceiling heights (circa 2.5 metres). These characteristics are not typical of the types of properties that large, modern organisations prefer to operate within, but as is currently the case, these characteristics do not preclude office use.

Options to Address Building Condition

21. A series of options exist to address the building condition and these are summarised below.

i. Comprehensive Remediation

22. This would require stripping the building back to its steel skeleton structure and rebuilding. This would provide a ‘new’ building of the same configuration and size. This will allow asbestos to be completely removed, and provide a new façade that addresses the flexible nature of the structure, is weather-tight and provides improved energy efficiency. It may be possible to construct a new facade that achieves the desirable modern performance parameters, but also replicates elements of the complexity of the existing facade – replicating the fins, louvers and screens with a matching set out of windows.

23. The cost of fully refurbishing this building to provide modern office space is estimated at $70million. This cost assumes that dilapidated elements of the building are renewed.

ii. Redevelopment for an alternative use

24. This would involve either converting or fully redeveloping the building into an alternative use such as residential, hotel or civic facilities. This may include private sector involvement and schemes may require significant levels of demolition or alternatively could involve restorative change. Reuse of the building would need to align with the City Centre Masterplan concept of a Civic quarter with a cultural focus and important public transport interface. Consultation with RFA in the context of the Aotea Centre would also be required.

iii. Demolition

25. This option recognises that the cost of repairing or rebuilding Civic would not necessarily deliver any real value (i.e. the cost of the work exceeds the end value). After demolition, the site could be converted into public space, used for a new building, or divested.

26. A ‘do nothing’ option is not considered viable. The need to repair services has been extended beyond anticipated prudent time frames. The presence of asbestos in the building is a matter that needs constant monitoring. An interim refurbishment solution is not considered viable as this will only provide short term relief from current concerns and will not address the fundamental deficiencies in the building.

Heritage Issues

27. At the time of the 135 Albert Street acquisition, and under the then current operative District Plan, the building was and is still not scheduled for its heritage value. A previous Auckland City Council heritage assessment determined that the building did not meet the criteria for scheduling under the Operative District Plan.

28. During September 2012, the Heritage Advisory Panel recommended an up to date assessment of the heritage values of Civic. This assessment has been undertaken under the criteria of the PAUP. Council has recently obtained heritage assessments from two consultants that advise on architectural heritage matters.

29. The first report was recommended scheduling the Civic as a category A place. The ‘extent of place’ recommended for scheduling captured a wide area including all of Aotea Square and portions of land behind Aotea Centre. The second report was an independent assessment and peer review of the first report. The second report recommended scheduling the Civic as a category A place and a reduced ‘extent of place’.

30. Council’s Heritage unit has reviewed both reports and found that the building clearly merits heritage status as a category B building under the PAUP criteria, with potential for category A, although more evidence would be required to support this latter rating.

31. A major issue for consideration is that the scale of any remedial or reconstruction work, that includes stripping back the building to address weather tightness, earthquake strengthening and asbestos removal, will adversely impact on those core heritage elements.

32. Before any decision can be taken about the future of Civic, council has to confirm a position with respect to Civic’s heritage classification. The building is not scheduled on either the District Plan or on the PAUP, although it is possible that a third party may submit on the classification issue as part of the PAUP process.

33. The Heritage unit has noted that eligibility for scheduling and actually putting Civic forward for scheduling are not the same issue. Heritage can be protected with covenants and the like, without formal scheduling. The Heritage Unit believes that if a third party submitted on this issue in the PAUP process it may ultimately be included on the schedule and evidence to date indicates a B classification.

34. From a technical perspective, the timing of dealing with submissions on the PAUP is such that it may take until 2016 before a position is confirmed. This provides an opportunity to seek demolition consent under the more liberal existing planning provisions as an option. However, it is possible that council may itself take a position on heritage that directs a certain outcome regardless of the PAUP outcome. What is important is that when council considers this, it is aware of the commercial issues that flow from the heritage decisions.

Decision Issues

35. Dealing with Civic is complex due to the tension between heritage and commercial objectives. The potential heritage status of the building may influence the options available for the property; particularly if a Category A classification is ultimately applied which would likely prohibit substantial demolition of the building.

36. Based on advice from council’s engineers and cost consultants, the preliminary assessment is that it is not viable to refurbish Civic for commercial office purposes, nor does council itself have any requirement for further office accommodation.

37. Preliminary work has also been undertaken to examine the viability of residential conversion. This found conversion to be unviable; nevertheless ACPL has received unsolicited interest from residential developers which may indicate alternative viable schemes. What is not certain is whether market participants have a true understanding of the issues associated with the building’s physical condition.

38. Whilst private sector involvement has the potential to introduce innovation, issues such as asbestos remediation, heritage value and the general profile of the building next to the other civic functions are significant factors impacting the commercial viability of building reuse.

39. There may be uses for the building which have not been contemplated which would benefit from market testing to identify what might be possible before a decision on the future of the building is made. The market process can test the appetite for private sector investment in refurbishing the building for a nominated use based on the preliminary heritage assessment of a category B heritage status.

40. RFA have significant interest in the future of Civic due to its proximity to the Aotea Centre. RFA have a capital works project to address foyer upgrades and water tightness, and are looking at ways to optimise the use of the Aotea Centre. The surrounds of both Civic and Aotea Centre are important in this regard.

41. RFA is also in the process of developing a strategy to address the advent of the New Zealand International Convention Centre (NZICC) and part of this is likely to involve a desire to develop a strong cultural precinct around the Aotea Centre that generates a multiplier effect through a thriving hub of performing arts, food and beverage and retail offerings.

42. RFA is already in discussion with the Auckland Philharmonic Orchestra (APO), the Royal NZ Ballet (RNZB) and others in respect of administration and rehearsal accommodation. Options for RFA include relocating its own office functions (between 200 and 300 people) to free up space in the Aotea Centre for performing arts organisations or locating other suitable property. Both the APO and RNZB have access to potential funding.

43. The location of Civic represents an opportunity for RFA and further work is being undertaken to better understand the requirements of RFA and others, and how the options for Civic could accommodate this.

44. Planning officers have reaffirmed the concept of a Civic quarter with a cultural focus and important public transport interface – bringing vitality to the area is key. The Civic is situated on the edge of the main square and is setback from this and Mayoral Drive which limits its presence within the precinct. This is further compounded by the lack of public uses on the ground floor of the Civic which results in reduced pedestrian and public activity to the southern part of the precinct. From a planning and land-use perspective potential uses include apartments, hotels and offices; although in all instances reverse sensitivities need to be addressed.

45. The market testing, the development of concepts by RFA and developed perspectives on the overall precinct would allow the Council to determine the future of the building with a complete picture of the options, costs and implications of the various decision routes.

Consideration

Local Board Views

46. Local board views have not been sought.

Maori Impact Statement

47. This report and its recommendations do not conflict with the priorities of Maori within the Auckland Plan and there are no known Maori ownership issues related to the site.

Implementation Issues

48. The market engagement would be undertaken by ACPL and is anticipated to take 2 to 3 months to complete. It will seek to determine the level of market interest to refurbish Civic based on the preliminary heritage assessment of a Category B Heritage Place.

Attachments

There are no attachments for this report.

Signatories

Authors

Ian Wheeler - Manager Property

Authorisers

Andrew McKenzie - Chief Finance Officer

Roger Blakeley - Chief Planning Officer

Chairperson	Cr Penny Webster
Deputy Chairperson	Cr Ross Clow
Members	Cr Anae Arthur Anae	Cr Calum Penrose
	Cr Cameron Brewer	Cr Dick Quax
	Mayor Len Brown, JP	Cr Sharon Stewart, QSM
	Cr Dr Cathy Casey	Member David Taipari
	Cr Bill Cashmore	Member John Tamihere
	Cr Linda Cooper, JP	Cr Sir John Walker, KNZM, CBE
	Cr Chris Darby	Cr Wayne Walker
	Cr Alf Filipaina	Cr John Watson
	Cr Hon Chris Fletcher, QSO	Cr George Wood, CNZM
	Cr Penny Hulse
	Cr Denise Krum
	Cr Mike Lee

Benchmark name	How it's calculated	Additional comments
Rates affordability	Actual or planned rates revenue less than or equal to each quantified limit on rate Actual or planned rates increases less than or equal to each quantified limited on rates increases	Quantified limit means a quantified limit on rates or rates increases for a year that is included in a local authority's financial strategy
Debt affordability	Actual or planned borrowings less than or equal to each quantified limit on borrowings	Quantified limit means a quantified limit on rates or rates increases for a year that is included in a local authority's financial strategy
Balanced budget	Revenue/operating expenses (shown as a percentage)	Revenue excludes development contributions, financial contributions, vested assets, gains on derivative instruments and revaluation of property, plant and equipment Operating expense excludes losses on derivative financial instruments, revaluation of property, plant and equipment
Essential services	Capital expenditure on network services / depreciation on network services (shown as a percentage)	Network services means infrastructure related to: - Water supply - Sewage and the treatment and disposal of sewage - Stormwater drainage - Flood protection and control works - The provision of roads and footpaths
Debt servicing	Borrowing costs for the year less than or equal to 10% of its revenue	Revenue excludes development contributions, financial contributions, vested assets, gains on derivative instruments and revaluation of property, plant and equipment Note a high-growth local authority meets the benchmark if borrowing costs for the year is less than or equal to 15% of its revenue Auckland Council Group is currently classified as a high-growth local authority
Debt control	Actual net debt less than or equal to planned net debt (displayed as a percentage)	Net debt is defined as financial liabilities less financial assets net of trade and other receivables
Operations control	actual operating net cash flow greater than or equal to planned operating net cash flow (displayed as a percentage)