Agenda of Extraordinary Meeting of the Ōrākei Local Board

Ōrākei Local Board

31 July 2017

Ngahue Reserve - Oceania Football Confederation Inc. - Variation to Lease

File No.: CP2017/13394

Purpose

1. This report provides information and a summary of public submissions to assist the Hearings Panel in determining whether to approve changes requested by Oceania Football Confederation Inc. for the proposed lease at Ngahue Reserve, St Johns, Auckland.

Executive summary

2. The Ōrākei Local Board and Auckland Council approved a 30 year lease to Oceania Football Confederation Inc. (Oceania) to enable the development of two full-size artificial football turfs and ancillary facilities in August 2013.

3. The Ōrākei Local Board publicly notified (June 2017) the intention to consider the request from Oceania as required by the Reserves Act 1977 to amend the terms of the lease to allow:

a) limited commercial activities

b) sub-letting to third parties (to undertake the commercial activities) and

c) an earlier finishing time for the hours of public (community) access to the facility.

4. The public submission period closed on 30 June 2017. The hearing is scheduled for 31 July 2017. A total of seven submissions were received, three of which wish to make verbal submissions. Overall the majority of submitters support the requested variations.

5. Existing lease arrangements enable Oceania to operate café, gym and other facilities in-house, with no ability to sub-lease to third parties.

6. Oceania have requested these amendments to generate income, utilising third-parties better placed to deliver commercial activities.

7. The Reserves Act 1977 requires that commercial activities undertaken on reserves must be necessary to enable the public to enjoy or benefit from the reserve or the convenience of the public using the reserve.

8. Neither the Oceania or any other submission, have provided any evidence to support this requirement outlined in paragraph 7.

9. Council staff do not support the requested earlier finishing time. Sufficient flexibility on finishing times is already built into the existing lease agreement. Agreeing to an earlier finishing time prior to the 30 year lease commencing will potentially compromise council’s ability to accommodate future demands.

Recommendation/s

That the Hearings Panel:

a) consider the public submissions in relation to the request by Oceania Football Confederation Inc. to vary the proposed lease of the site at Ngahue Reserve to:

1. enable sub-leasing and commercial activities as follows:

i. physiotherapy and/or sports medicine rooms to maximum floor area of 75 square metres;

ii. sports retail to maximum floor area of 50 square metres;

iii. a gym to maximum floor area of 75 square metres;

iv. a café to maximum floor area of 75 square metres; and/or

v. office space (for a football related organisation) to maximum floor area of 240 square metres.

2. amend the public access closing times from 9pm to 8:30pm daily to enable Oceania Football Confederation Inc. to hire out the facility.

b) make recommendations to the Ōrākei Local Board on the outcome of its deliberations on the public submissions that have been considered.

Comments

Site background

10. Ngahue Reserve (the Reserve) is located at 62-80 and 82 College Road, 67 Merton Road and 7 Allison Ferguson Drive, St Johns (shown in Attachment A); it is bordered by College Road, Stonefields Avenue and Merton Road, and lies adjacent to land owned by Tennis Auckland Region Inc at 69 Merton Road and Auckland Council at 71-73 Merton Road, (Colin Maiden Park).

11. The 20 hectare recreation reserve is mostly owned by Auckland Council with one title held on trust by the council from Department of Conservation. The reserve currently comprises areas leased to the Auckland Netball Centre Inc., Tennis Auckland Region Inc., and Oceania Football Confederation Inc.

12. The reserve is mostly owned by Auckland Council and classified as recreation reserve; one title is held on trust by Auckland Council (the 5.5488 ha netball area) from Department of Conservation.

13. The reserve is operated under the 1996 Ngahue Reserve Management Plan (the Plan) adopted by the former Eastern Bays Community Board (Auckland City Council) following a public consultation process (see Attachment B).

14. A large portion of Ngahue Reserve is a closed landfill site and as such is subject to on-going monitoring by the Council. The issued leases reflect these specific requirements and development limitations.

15. The Unitary Plan zones the reserve as ‘Open Space - Sport and Active Recreation’. See Attachments C and D.

Leasing background

General

16. The Plan anticipates leases being issued to facilitate and enhance the recreational use of the reserve.

17. The reserve is currently subject to three leasing arrangements approved in 2013 (areas and titles shown in Attachments A and E):

a. Auckland Netball Centre Inc. (lease)

b. Tennis Auckland Region Inc. (lease)

c. An Agreement to Lease to Oceania Football Confederation Inc. to develop the site for football related activities, (area shown in Attachment F).

18. In August 2013 the Regional Development and Operations Committee approved issuing an Agreement to Lease and lease to Oceania for a term of up to 30 years. This is outside the leasing guidelines of a maximum term of 20 years contained in the Community Occupancy Guidelines (2012).

Reserves Act 1977 and Resource Consent

19. Sections 53 and 54 of the Reserves Act 1977 govern the ability for Auckland Council to lease land designated as reserves. The existing leases have been issued in accordance with the provisions of the Act.

20. The ability for an entity to undertake commercial activities on a reserve is also specifically governed by section 54(1)(d) of the Act; copies of these sections are attached as Attachments G and H.

21. Of particular note is the requirement that commercial activities “…must be necessary to enable the public to obtain the benefit and enjoyment of the reserve or for the convenience of persons using the reserve.”

22. The resource consent issued for the facility anticipated commercial activities occurring at the site, although the ability to develop and undertake the activities are subject to approval by the landowner and the provisions of the Reserves Act 1977.

23. The resource consent was not notified, so was not the subject of public consultation on the matter of the commercial activities.

24. Commercial activities have been approved in other reserves and parks through, (examples shown in Attachment K):

· Express provision in the relevant Reserve Management Plan

· Express approval through legislation

· Historical arrangements entered into by legacy councils (which may or may not be approved in the current environment)

· The land not being subject to the provisions of the Reserves Act 1977.

Oceania Football Confederation Inc. Lease

23. The development is being undertaken at no cost to the Ōrākei Local Board or Auckland Council.

24. The 2013 Oceania Football Confederation proposal provided for a staged development that included:

Stage 1

· two full-size artificial football turfs

· three practice pitches (subsequently reduced to two pitches: one deferred to Stage 2)

· toilet and changing facilities

· carparking

· landscaping

The turfs are available for community use between 3pm and 9pm Monday to Friday, and 8am to 9pm Saturday and Sunday (a total of 24 hrs per turf per week within the allocated hours).

Stage 2

· a futsal facility

· a gym, café and administration facilities

Oceania would operate these services in-house and not sub-lease these activities.

22. Once fully developed the facility will be available for community use and managed through the Auckland Council fields booking system. The facility is currently being partially used by the community.

Oceania Football Confederation – Requested Changes to Lease

Sub-Leasing and Commercial Activities

23. Oceania has sought to amend the draft lease to allow it to:

a. sub-lease parts of the facility to enable commercial operators to run the café, gym, and sports medicine services and rent out office space

b. amend the public access closing times from 9pm to 8:30pm daily to enable Oceania to hire out the facility

24. Oceania has requested these amendments to generate income utilising third-parties better placed to deliver commercial activity.

25. Oceania has not supplied a business plan for the financial viability of the commercial operation, nor any information or evidence to support the provisions of the Act that “…commercial activities must be necessary to enable the public to obtain the benefit and enjoyment of the reserve or for the convenience of persons using the reserve.”

26. Oceania has requested an 8:30pm public finishing, with fee-paying users using the facility between 8:30pm and 10pm.

27. Oceania have attached several letters of support from several clubs and associated entities across Auckland, (included as part of the submission from Oceania Football Confederation at Attachment J).

Public Notice of Intention to Consider Commercial Activities

28. The public notice issued on 31 May 2017 invited submissions based on the following information:

Oceania Football Confederation Incorporated has requested that Auckland Council allow part of the leased site to be sub-leased to third-parties to undertake certain / specified commercial activities under Section 54 of the Reserves Act 1977. The specified activities and areas are:

i. physiotherapy and/or sports medicine rooms to maximum floor area of 75 square metres;

ii. sports retail to maximum floor area of 50 square metres;

iii. a gym to maximum floor area of 75 square metres;

iv. a café to maximum floor area of 75 square metres; and/or

v. office space (for a football related organisation) to maximum floor area of 240 square metres.

In addition, Oceania Football Confederation Incorporated is also seeking an amendment to the daily finishing time that had previously been allocated to Auckland Council for making available for community groups / users. The current finishing time is 9pm daily and Oceania Football Confederation Inc. are requesting this be changed to 8:30pm daily to enable it to be used by or hired to organisations introduced by Oceania Football Confederation.

Submissions

29. A total of seven submissions were received, (summary of submissions in Attachment I; the full submissions are in Attachment J).

Sub-Leasing and Commercial Activities

30. The majority of the submissions support the Oceania request to sublease and undertake commercial activities within the leased area.

31. One submission opposes all aspects of the requested changes by Oceania.

32. The Oceania submission highlights the overall cost of the development (circa $15.9 million) plus the on-going operational costs to keep the venue operational, detailed in Attachment J.

33. Oceania oppose returning 50 per cent of any rental income received to council, citing reduced revenue and the ability to offset against operating costs. It suggests that the portion returned to council should be no more than 10 per cent or 25 per cent.

34. Oceania note its high level of investment to develop the facility; its continued investment and on-going operating costs.

35. This arrangement (i.e. no cost to council or the Ōrākei Local Board) is consistent with the arrangement between Oceania and the Ōrākei Local Board and formed the basis of the agreement with Oceania.

Reducing Community Access Hours with Earlier Finishing Time

36. The Oceania submission states an earlier finishing time of 8:30pm would enable it to:

· Allocate the fields to New Zealand and international elite teams

· Hire the fields to non-community groups to recover some of the annual operating costs.

37. Council staff advise that the existing agreements do not need to be amended and that the 9pm community finishing time should remain unchanged.

38. The agreements currently provide both parties the ability to meet at the commencement of each season to agree the days and times to be allocated for community use. This is the opportunity for Oceania to signal if it needs to use the fields from 8:30pm on any particular day. Council, having considered community needs can agree or otherwise to the earlier 8:30pm finish time on a case by case basis to accommodate Oceania’s needs.

39. The proposed lease is for a term of 30 years. Anticipated population growth in Auckland will invariably mean that there will be sufficient demand in the future to fully utilise community hours finishing at 9pm daily. Changing the finishing hours to 8:30pm now will compromise the ability of council to accommodate future community needs.

Reserves Act 1977

40. The area leased by Oceania Football Confederation is subject to the provisions of the Reserves Act 1977. In particular, the request by Oceania Football Confederation to enable commercial activities and sub-letting is specifically covered by sections 53 and 54 as detailed above and in Attachments G and H.

41. The Reserve Management Plan was developed in accordance with the provisions of the Reserves Act 1977. While the plan provides for leases for recreational activities, it is silent on the matter of commercial activities, which by extension means there is no express provision for these to be undertaken without further consultation being undertaken.

42. The public consultation recently concluded in June 2017 satisfies the requirements of the Reserve Management Plan and the Community Occupancy Guidelines relating to issuing sub-leases and commercial activities on the reserve.

Summary

43. When considering both the written and verbal submissions the Hearings Panel should take into consideration:

a) The proposed lease is for a term of 30 years (as previously agreed by Auckland Council). Changes to the lease now will be for the duration of the term. Any subsequent changes to the lease can only occur with the written agreement of both parties.

b) The Reserves Act 1977 requires that commercial activities need to be for the benefit and convenience of users of the park, not necessarily for the financial well-being of the lessee (Oceania).

c) The need to limit the term of sub-leases (if approved).

Consideration

Local board views and implications

44. The Ōrākei Local Board has been actively involved in matters relating to the Reserve. The first stage of the development is largely complete. The request to amend the proposed lease will affect how Stage 2 is developed and ultimately how the reserve is used going forward.

45. The Ōrākei Local Board has convened the Hearings Panel to consider the Oceania request. The panel will make recommendations to the board which will determine Oceania’s request at its meeting on 17 August 2017.

Māori impact statement

46. The site has known Maori cultural heritage values (see pages 7-8 of the Ngahue Reserve Management Plan, Attachment B).

47. Consultation documentation has been provided to kaitiaki representatives of eleven iwi groups with associations to Ngahue Reserve:

Te Kawerau a Maki; Ngāi Tai Ki Tāmaki; Ngāti Whātua o Ōrākei; Ngāti Pāoa; Ngāti Maru; Ngāti Tamaterā; Ngāti Te Ata – Waiohua; Te Aakitai Waiohua; Ngāti Whanaunga; Ngāti Whātua; Ngāti Whātua Nga Rima O Kaipara Charitable Trust,

One formal response has been received from Ngāi Tai Ki Tāmaki Tribal Trust confirming that they “… have no concerns with this proposal.” No other submissions from iwi were received.

48. These iwi groups were previously consulted when the Ngahue Reserve Management Plan was being prepared and prior to adoption in 1996 and in 2013 when the original consultation was undertaken before the Agreement to Lease was entered into with Oceania Football Confederation.

Implementation

Legal implications

49. Oceania is currently occupying an area agreed to on the basis of agreements that have already been subject to public consultation in 2013.

50. The resource consent for the area occupied by Oceania already permits commercial activities subject to the provisions of the Reserves Act 1977 and landowner approval.

51. In issuing the 2013 Agreement to Lease both sub-leasing and commercial activities were expressly excluded.

Funding implications

52. There are no consequential budget implications for the Ōrākei Local Board or Auckland Council, other than the cost of preparing the legal documentation. Any future developments or on-going operational costs at the site are the responsibility of Oceania.

Attachments

No.	Title	Page
a ⇩	Leased Areas - Ngahue Reserve	15
b ⇩	Ngahue Reserve - Reserve Management Plan 1996	17
c ⇩	Unitary Plan H7 Open Space Zones	93
d ⇩	Unitary Plan I322 Mount Wellington 5 Precinct	109
e ⇩	Certificates of Title - Ngahue Reserve	119
f ⇩	OFC Leased Area Ngahue Reserve - Surveyed	135
g ⇩	Section 53 Reserves Act 1977	137
h ⇩	Section 54 Reserves Act 1977	141
i ⇩	Summary of Submissions - Ngahue Reserve, July 2017	143
j ⇩	Detailed Submissions to OFC Request to Vary Lease at Ngahue Reserve, July 2017	145
k ⇩	Example of Commerical Activities on Council Reserves	189