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Puketāpapa
Local Board
24 April 2014
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Auckland
Council Property Limited Local Board Six-Monthly Update
1 July to 31 December 2013
File No.:
CP2014/08221
Purpose
1. The
purpose of this report is to update the Puketapapa Local Board of the
activities of Auckland Council Property Limited (ACPL) for the six months 1
July to 31 December 2013.
Executive
Summary
2. ACPL’s
goal is to be recognised as a “centre of excellence” that brings commercial
expertise and provides value for money to Auckland Council across a discrete
property portfolio valued at approximately $1 billion. ACPL provides
commercial expertise in property management, the buying, selling of properties
and by and strategically developing council assets. As a substantive CCO with
a commercial focus ACPL provides crucial support to a council organisation that
efficiently and effectively achieves social, economic, cultural and
environmental outcomes for Auckland.
3. In order to achieve our goal and
meet the expectations of the Mayor and the council, ACPL will work towards
seven key outcomes over the next three years. These are:
· Properties managed for the council and
Auckland Transport (AT) are fit for purpose and net returns optimised.
· Place-shaping partnerships are
effectively planned and managed to project completion and in accordance with
Auckland Plan objectives.
· ACPL identifies housing opportunities
and collaborates with partners to deliver exemplar housing developments,
particularly in the more affordable spectrum of the market.
· Council business interests are managed
to protect long term value and achieve budgeted net return.
· Property acquisitions are undertaken in
a commercially robust manner and in accordance with the council and AT agreed
requirements and relevant legislation.
· Council and AT property disposals are
undertaken in a commercially robust manner.
· The council is provided with a
commercial perspective on planning and development initiatives to support
effective implementation of those initiatives.
4. A
summary of ACPL activities specific to the Puketapapa Local Board is outlined
in the Discussion section of this report with supporting detail included in Attachments B, C, and D.
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Recommendation/s
That the Puketāpapa Local Board:
a) accepts
the Auckland Council Property Limited Local Board Six-Monthly Update Report 1
July to 31 December 2013.
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Discussion
Principles for working together
5. ACPL’s Local Board Engagement
Plan (LBEP) states that a successful working relationship between local boards
and ACPL is founded on the following high-level principles which will guide our
engagement with the local boards:
· a shared understanding of and mutual
respect for the roles, responsibilities and decision-making authority of local
boards, the governing body and ACPL;
· transparent and timely communication
with no surprises;
· understanding and acknowledgment of
shared responsibilities between the parties;
· a commitment to a timely
response to and resolution of issues raised by local board members;
· a commitment to early
inclusion in the planning and decision making process where issues have a
specific relevance to a Local Board;
· a commitment
to flexibility in terms of engagement, recognising differing levels of interest
and local relevance across the Auckland region.
6. ACPL’s
commitment to the local boards is outlined in detail in our LBEP, which is
attached as Attachment A for reference.
Workshops and Meetings
7. A
schedule of Puketapapa Local Board workshops and meetings attended by ACPL
representatives from July to December 2013 is attached as Attachment B.
The list includes property specific meetings and workshops relating to general
property management and the ongoing portfolio Rationalisation Process.
Property Portfolio Management
8. ACPL manages all non-service
properties. These are properties not immediately required for service delivery
or infrastructure development that are owned by Auckland Council or Auckland
Transport. The current property portfolio includes industrial sites and
buildings, retail tenancies, cafés, restaurants, offices and a substantial
portfolio of residential properties. ACPL’s improved property knowledge and
understanding has enabled it to optimise revenue streams and identify future
opportunities.
9. The property
portfolio has continued to grow during the last six-months and now totals 1095
properties. Rent arrears and vacancies were effectively managed throughout the
period. During Q1 the average monthly collectable arrears rate and vacancies
rate were respectively 1.35% and 2.93%. ACPL’s return on the property portfolio
for the quarter ending 30 September 2013 provides the shareholder a net surplus
above YTD budget of $2m.
10. Property
portfolio information detailing current ACPL managed commercial and residential
property within the Puketapapa Local Board area is attached at Attachment
C of this report. The report includes each property’s classification or
reason for retention along with additional notes to identify the nature of the
property, such as a café within a library, or a residential property with
tenancy in place. It has also been updated to show properties for which council
directs that the operating budget and lease revenue will be included in local
board budgets from July 2014.
11. A
report indicating portfolio movement in the local board area is attached as Attachment
D. The report details all new acquisitions including the reason for
acquisition, any transfers and the reason for transfer, and any disposals.
UPDATE
ON HOUSE REMOVALS
Portfolio Review and Disposals
12. ACPL is required to undertake
ongoing rationalisation of the council’s non-service assets. This includes
identifying properties from within council’s portfolio that may be suitable for
potential sale and development if appropriate. ACPL has a particular focus on
achieving housing outcomes. Identifying potential sale properties contributes
to Auckland Plan outcomes by providing the council with an efficient use of
capital and prioritisation of funds to achieve its activities and projects.
ACPL and Auckland Council’s Property Department work collaboratively on a
comprehensive review process to identify such properties.
13. Once
identified as a potential sale candidate a property is taken through a multi-stage
Rationalisation Process. The agreed process includes engagement with; council,
CCOs, local board and mana whenua. This is followed by ACPL Board approval,
engagement with local ward and the Independent Maori Statutory Board and
finally a governing body decision. A detailed process flowchart is provided as Attachment
E.
14. Council is
budgeting to receive proceeds from the sale of surplus properties of $80
million in 2012/2013 and $58 million in 2013/2014. The financial implication of
not achieving these budgets would be higher debt and therefore higher interest
costs compared to budget.
15. Properties
under review for future use opportunities via the Rationalisation Process in
the Puketapapa area will be listed here as and when they arise. This will
include detail around the review of properties no longer required for their
original service purpose. There are currently no properties under review for
future use opportunities in the Puketapapa Local Board area. Further details
are included in Attachment C.
Place Shaping and Housing Initiatives
16. ACPL is contributing commercial
input into around 40 council-driven place-shaping and housing initiatives
region wide. Involvement extends from provision of initial feasibility advice
through to implementation, with projects ranging in size from $400k to in
excess of $100million.
17. There are no current ACPL
place-shaping or housing initiatives or proposals underway in the Puketapapa
Local Board area.
Acquisitions
18. ACPL continues to support Council
and Auckland Transport programmes and projects by negotiating required property
acquisitions. All such acquisitions are funded through approved Council or
Auckland Transport budgets. We also provide advice to assist with budgets,
business cases and strategy to support an acquisition.
19. A total of 54
property purchases to the value of $8.9m were completed during Q1. The number
of acquisitions under active negotiations at the end of Q1 was 300 (253 AT and
47 AC).
20. Recent
council acquisitions have included;
- meeting open
space requirements, particularly for subdivisions
- City
Transformation projects
- Heritage
projects
- Storm water
projects.
21. Current
acquisitions programmes for AT include;
- AMETI (Auckland
Manukau Eastern Tamaki Initiative)
- CRL (City Rail Link)
- Te Atatu Road, Te Atatu road widening
- Dominion Road, Mt Eden road widening.
22. All
properties were purchased within the valuation threshold agreed with Auckland
Council and Auckland Transport.
23. Due to
commercial sensitivities any Puketapapa Local Board specific acquisitions
detail will be provided direct to the local board by the Auckland Council or AT
project owner..
Business Interests
24. ACPL manages
eight business interests region wide on council’s behalf. This comprises two
forestry enterprises, two landfills and four quarries. There are currently no
ACPL managed business interests in the Puketapapa Local Board area.
Consideration
Local Board Views
25. This report is for the Puketapapa
Local Board’s information and seeks the views of the Local Board.
Maori Impact Statement
26. During
the past six months ACPL has further developed our Maori engagement
initiatives. Our enhanced process engages with the 19 key mana whenua groups in
the Tamaki region on three fronts: identifying cultural significance concerns
regarding disposal properties, flagging commercial interests and development
partnering discussions. ACPL also engages with relevant mana whenua in respect
of development outcomes for ACPL lead projects. ACPL has additionally undertaken
to be part of council’s Maori Responsiveness Plan pilot programme. The
project’s key output will be an operational document outlining how ACPL will
contribute to council’s strategic and operational commitments to Maori. The
Current State Assessment phase of this project has been completed and we are
now in the Improvement Planning phase. ACPL will advise the Puketapapa Local
Board as appropriate of any specific discussions that arise in the local
board’s area.
General
27. This report is intended to help
ACPL meet its statutory obligations under the Local Government Act 2002. The
relevant sections of the Local Government Act 2002 are noted below for
information.
28. As provided
in section 59(1) of the Local Government Act 2002, the principal objective of a
CCO is to:
(a) achieve the
objectives of its shareholders, both commercial and non-commercial, as
specified in the statement of intent; and
(b) be a good
employer; and
(c) exhibit a
sense of social and environmental responsibility by having regard to the
interests of the community in which it operates and by endeavoring to
accommodate or encourage these when able to do so; and
(d the CCO is
a council-controlled trading organisation, conduct its affairs in accordance
with sound business practice.
29. As provided
in clause 1 of Schedule 8 of the Local Government Act 2002, the purpose of the
SOI is to:
· state publicly the activities and
intentions of a CCO for the year and the objectives to which those activities
will contribute;
· provide an opportunity for shareholders
to influence the direction of the organisation; and
· provide
a basis for the accountability of the directors to their shareholders for the
performance of the organisation.
Implementation Issues
30. There are no
implementation issues.
Attachments
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No.
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Title
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Page
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aView
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ACPL DRAFT Local Board Engagement
Plan
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11
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bView
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Schedule of meetings and workshops
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27
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cView
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Properties Managed by ACPL in the
Local Board area
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29
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dView
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Property movement in the Local Board
area
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31
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eView
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Rationalisation Process Flowchart
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33
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Author
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Caitlin Borgfeldt
- Local Board Liaison
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Authoriser
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David Rankin -
Chief Executive
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