Drury Development: Auckland City Council Faces Developers Over $ 1 Billion Infrastructure Hole

Auckland City Council says it will oppose plans by developers Kiwi Property, Fulton Hogan and Oyster Capital to rebuild Drury unless they can reach a deal by next year to fund a $ 1 billion shortfall for infrastructure in the area.

Public presentations on the changes to the private plan closed Thursday of last week.

Oyster Capital, Fulton Hogan and Kiwi Property are looking to rezoning approximately 330 acres of urban-future Drury East to a mix of residential, commercial and open space. Council officials added to the public notice a fourth smaller private plan change to rezoning 33.7ha for mixed-use housing by Karaka and Drury Consultant Limited.

Council officials have said there remains a deficit of more than $ 1 billion needed to fund infrastructure for works to go ahead. That includes $ 600 million for transportation-related projects and another $ 500 million for stormwater, sewer, parks, and community facilities.

The council’s Planning Committee voted to accept the three private plan change requests in July. They have since gone out for public consultation before a series of hearings, which are expected to be held next year.

Auckland Council’s chief strategy officer Megan Tyler said the authority wants to find a way to solve the problem and has been in talks with developers.

“What we’ve said is that we support the Drury development, but there are four private plan changes here right now and the biggest challenge is how we finance the infrastructure,” Tyler said. “We have said that we will oppose them if, at the hearings, we do not have an agreed infrastructure financing solution.”

Tyler said that if it’s special-purpose vehicles (SPVs) like he used to finance works in Milldale, or if developers pay more, a solution must be found.

“We have not specified what the solution is at this stage and that is why we want to continue working on this. We have been talking with all parties about the infrastructure requirements and possible solutions. These discussions are ongoing and we are committed to that. “

An SPV is established specifically for each new development and is used to raise the money for infrastructure, which is then repaid over an extended period of time through a tax, or target rate, collected by the council.

Kiwi Property’s private plan change advice presentation said the Drury plan changes are not consistent with the Auckland 2050 Plan, its Long Term Plan, and the Regional Land Transport Plan developed by Auckland Transport (AT) and the Transport Agency Waka Kotahi NZ.

“Auckland is severely restricted in its ability to finance and finance infrastructure across the region to support growth. With limited financing capacity, scarce funds must be used in the most efficient way to enable growth across the region.

“As such, they will have significant financial implications for infrastructure providers, affect their ability to coordinate delivery, and are likely to have significant implications for the ability to serve other areas. This, in turn, will undermine the ability to deliver infrastructure. to support development capacity in other Auckland growth areas. “

Oyster Capital, Fulton Hogan, Kiwi Property and Karaka and Drury Consultant Limited were contacted for this story.