NBR's Chris Hutching interview with Bob Parker

Monday, 19 July 2010 02:30

 

Q&A: Christchurch mayoral candidate Bob Parker

Chris Hutching | Tuesday July 13, 2010 - 12:02pm

 

Christchurch mayor Bob Parker launched his mayoralty campaign this week against challenger, MP Jim Anderton.

NBR – If could you do things differently over your past term in office what comes to mind?

Parker – A better level of engagement and explanation around some major issues prior to council making decisions. The more information the community has in its hands by way of understanding the broad issues, the more they will understand the rationale for making decisions. We’ve always tried to get the information out. But we’re very easily defeated by a headline. There were some issues where it was difficult to do more than we did. One was the Henderson land purchases. We needed to move quickly. Because of the confidential nature of property dealings one has to move carefully.

NBR - In hindsight were the prices (total $17 million) too high given the significant fall in development land values since mid-2008 when the council bought them?

Parker - We were moving fairly early on. I don’t think at that stage people foresaw the scale and duration of the downturn. But we did negotiate a number of prices downward. The price came down a couple of million from the values the banks put up. Our key role was to protect opportunities and properties that we needed to control to ensure outcomes we’ve been working towards. They’re really important sites such as the Para site, a prime site on the corner of Tuam and Manchester St, and the Penny Cycles site where there was a secondary rationale. We wanted to ensure the adjacent old Odeon Theatre couldn’t be sold (to private developers) with the Penny Cycles site. They’re a good mix of historic urban fabric and we didn’t want to see them bowled. There wasn’t an appetite to put money into the Odeon because it would need well over $10 million for strengthening. Similarly with the site in Sydenham (Sydenham Square on the former school site). It’s a very important corner site, completely consulted on and consented. It had the buy-in of the community. It fitted exactly with our vision for redeveloping new mixed residential retail space in the inner city.

NBR - But it’s an area enclosed by industrial units and paint shops and Henderson never got traction getting it going.

Parker - Well he got it resource consented and claims he had deposits on 40% of the site. But that wasn’t the issue for us. We needed to move quickly to protect key sites essential for us to control the outcomes for the redevelopment programme we have. We were very concerned that we might have lost all the work that Henderson had done. He’d worked closely with our planning people. The sites were going to have laneways, there were to be open squares, public spaces. We wanted to retain all that so with Henderson on board we had a friendly developer whose plans had been moving exactly along our revitalisation urban development plans. What we’ve done is place covenants over those sites so when they go back on the market they will be able to be developed only along the lines of our revitalisation plans. We didn’t want those properties to be purchased by someone who at that point would have had complete right under the city plan to develop them to 14 storey buildings.

NBR - You’d be aware of the discount on development properties in cities around New Zealand. How will any developer be able to make these sites work at the prices you paid for them. Won’t it involve subsidisation by the city?

Parker – It may well do. But short-term return is not the goal. The outcome is the goal. The goal is a high quality new urban fabric and we’ll look at any mechanisms it takes to encourage development on those sites. It may well be that council will remain a landowner for a number of years with a leasehold outcome. The highest outcome is getting appropriate design outcomes for those sites. There’s only one person who has to pay more than we did and that’s Henderson under the option buy back conditions. We padlocked them. He couldn’t come back in the scenario we’re in now where prices have fallen. He can’t back and buy them for less than we paid. He has to pay what we paid plus all of our holding costs which includes things like rates and power, or the market price, whichever is highest.

NBR - He has recently exercised the option on part of the Para site. Doesn’t that contradict the piecemeal development idea because he is after the best portion for retail development facing the main street?

Parker - The issue for Mr Henderson is that he has to front up with the complete business deal and that’s where the pressure is on him. The piecemeal problem is no longer the issue it was before. We would have had little control previously over what happened there (pre-covenants). The plans submitted by Henderson if he is successful in going ahead are entirely consistent with the urban style we want for that part of the city - a maximum height of four levels, retail on the ground level and a mix of residential styles. Fundamentally it complies with the vision for those sites.

NBR - Why is the city council moving to the better end of town opposite the Art Gallery and taking 2000 people away from the area you want to revitalise, which is where the civic headquarters is now?

Parker - We needed an appropriate scale of building to put all staff under one roof. The intention for this area (the current headquarters in Tuam Street) is to be primarily residential or accommodation based with retail on the ground rather than office blocks. The council’s current car park site over road is a perfect residential redevelopment site. We looked at it. In the end the deal we got in the old Post Office building as a joint venture stacked up as best possible site for us using existing building to be refitted to a six green star rating. So there were other drivers

NBR – what about cost overruns on the new civic building?

Parker - There are no cost overruns. It’s on budget and on time. Then original figure was about $100 million. The overall figure will be $110 million or thereabouts. The only change we made was that we had opportunity to vary the specifications. We wanted to insert a couple of mezzanine areas to relocate other staff from a rented situation that’s costing about half a million a year so council was asked to consider that extra cost plus our own staff with a mind to energy conservation came up with a brilliant proposal around a tri-generation power plant which converts methane gas into electricity. All city council energy requirements will be met by that system. It cost about $3.5 million and saves us $1.2 million in energy costs a year and we can supply energy to the city gallery across the road. It was a deliberate variation. It was not a cost overrun. Then we come to the rentals on the 30-year loan. It’s a joint venture with Ngai Tahu. The annual rental of $8 million is paid to the joint venture company and $4 million comes back to the city to help service its loan. We’re also saving $1 million in energy so the real annual cost is about $3 million a year. It’s very advantageous to ratepayers.

NBR - Why engage in a joint venture when the city could fund it on its own, perhaps get Ngai Tahu to develop it, but save on the rent?

Parker - It freed up $50 million of capital expenditure for other infrastructure projects such as rubbish collection, waste water disposal etc. We are actively looking to partner with Ngai Tahu. They have an appetite for local government construction and we want to strengthen our relationship with them. The other thing we liked about choosing them as joint venture partners is we saw them as a strong community based organisation. The profits benefit Ngai Tahu and they are primarily in Christchurch and around the South Island. Their shareholders are our shareholders

NBR – when will the council fix the sewage overflows into the Avon and Heathcote Rivers and why is the council seeking resource consent to continue doing so?

Parker - That’s generally misunderstood. The city is not asking for more overflows. We are upgrading pumping stations that are old. Whenever we have high rainfall the wastewater system is infiltrated in a lot of places by stormwater from the streets and from illegal connections and old connections. You get a pressure build up and they spill into the rivers in a heavy rain event. But the water from those pumping stations is fairly dilute. The main problem in our rivers is wildlife and off-road wash. Christchurch City went to Environment Canterbury and asked about consenting. We identified a number of pumping stations that were liable to overflow. So the city went and said to Environment Canterbury ‘here is full disclosure’. We’re not seeking consents because more is going into the river. We wanted a consent in place that was upfront and honest. We’re upgrading. There are fewer overflows. I don’t know the timetable for when that will be completed. There’s a lot of work going on over next 10 years. One area we’re working on is the south west outskirts of the city where development is being held up because of stormwater issues. We’ve accelerated that. The other thing is we’ve been working with Environment Canterbury around stormwater and trying to get into place a single global consent for Christchurch based on a series of outcomes that will enable us to keep costs down. We’ve had some trouble getting to that point. Environment Canterbury wants to continue granting a series of consents. We want one consent that would save ratepayers millions of dollars with the same environmental outcomes.

NBR- The Central Plains Water irrigation scheme – why are you supporting the appeal against its resource consent when you have supported it in the past?

Parker - it’s no different to the position we took from day one. In the past when the council was under auspices of the 2021 group it was a keen supporter of the CPW scheme. In this term we made it very clear to CPW Limited we had no interest in providing ratepayer money even though we were called on several times. It was easier for our partners Selwyn District Council to bypass the city, which they couldn’t do while we were jointly funding development of CPW. So Selwyn effectively bought us out and repaid the half million we had put in and they were able to determine their own continuing arrangements for CPW. Meantime the city will retain its place on the CPW Trust because we believe we have strong interest in the outcome. The CPW Trust monitors the consents and puts in place environmental improvements and we want to remain part of that. The issues we’re now asking CPW to clarify in terms of the volume of water taken from the Waimakariri are no different to the questions we’ve always asked.

NBR - Background Cabinet papers show local councils will be asked to fund the CPW scheme

Parker - I have a strong personal view that infrastructure for irrigation is best in public hands. If we have canal system it should be in community hands. None of the big work under the Canterbury Water Management Strategy can be achieved without Government being a major funder. There’s a very good model and that’s the Government broadband initiative where the Government puts up the vast majority of funding by taking an equity stake and as the water provider connects customers they pay down the government stake.

NBR - What chance is there of government funding for CPW?

Parker - I think there’s a very high chance, I’m not so sure the schemes are that well advanced yet. People are looking at what models apply. Hurunui is putting together zone committees under the Water Management Strategy but they probably won’t be up and running until next year. The appointment process to the zone committees has to be handed very carefully to ensure the right mix of interests.

NBR - What was your role in putting together the regional mayoral letter to Nick Smith that led to him sacking Environment Canterbury’s elected councillors?

Parker - I’m not one of the masterminds behind the government inserting commissioners at Environment Canterbury. That was a convenient exaggeration applied to me by people with a political axe to grind. I’m not at the centre of any conspiracy theories. Every mayor in Canterbury did (write and sign the letter). Jim Anderton as Minister of Agriculture was also previously involved. We (our letter) talked about frustrations over a number of issues costing ratepayers that often put us in court. A classic one was the Banks Peninsula plan. Everyone –farmers, environmentalists and local people all agreed and at the 11th hour Environment Canterbury filed some additional demands on the process that were completely inappropriate. The judge said we should go them for costs. That letter in which we put together a number of frustrations quite clearly did not ask for any action. They were subjective views, not an objective process, around what they saw as lack of performance at Environment Canterbury. It has no water plan over 20 years, there is over-abstraction of aquifers and the lowland rivers are drying up. They have a number of areas where they should be performing. One of them is economic development and I have yet to see any sign of economic development. Maybe that will take 20 years too.
What I find really interesting about the response to the mayors and myself putting our hands up is that we’re singled out in isolation to all the other people across this province who for years have been holding their hands up. When did it become a crime to hold your hand up and say we’re having problems with these people? That’s why the Labour Party was looking to review Environment Canterbury but didn’t do it. This government signaled early on it was watching Environment Canterbury which carries out the delegated powers of the government and the Government is the only body that can put in an inquiry. This is the government’s call and it’s on their shoulders alone that any blame should rest. I wanted to ensure that the government didn’t walk away from the non performance of Environment Canterbury.
I accept this is unique situation and I’m not comfortable with what is perceived very strongly as a loss of democracy in this province. I don’t think anyone wants to be in that zone for long. And I don’t think Environment Canterbury needs to be in hands of commissioners until 2013. My personal view is that the commissioners should be able to complete their work by the end of next year and I would not be surprised to see an election for Environment Canterbury by the end of next year.

NBR - In the past you have talked about the attraction of a unitary authority so wouldn’t this be good opportunity to advocate for that rather than elections for Environment Canterbury?

Parker - The biggest issue is performance of Environment Canterbury which has been described as abysmal. I don’t care if there is a unitary authority or not at this point. What I care most about is we resolve issues round water and reinstatement of environmental values that have been sacrificed through poor management or lack of understanding. Downstream issues are around public transport and unitaries. It makes no sense to have public transport in the hands of two organisations. There should be a single public transport provider and that should the city because most of it happens on roads over which we have control, plus bus lanes, the interchange and the timetabling systems. Ratepayers pay for that

NBR – Aren’t there transport jurisdictional problems with district councils

Parker - I don’t think there are jurisdictional problems. We’ve already solved that through our Greater Christchurch Urban Development Strategy. 90% of routes are in the city. Some go to Rolleston or Rangiora, that’s not a problem.

NBR- What about Environment Minister Nick Smith’s urban technical advisory group aimed at loosening green belts. Isn’t that contrary to the aims of the Greater Christchurch Urban Development Strategy?

Parker - We’re aware of that discussion. We think it’s aimed primarily at Auckland. Our urban development strategy is predicated around population growth over 50 years and to ensure that within the boundaries there is more than enough land to service needs for residential development. We have a timetable to release land so there is always an oversupply available. We can release some areas more quickly. We have a panel that does that by looking at population trends. There’s a difference between Auckland and Christchurch in that we have a surplus of land available. Our urban development strategy is driven primarily to reduce development costs or you can create unbudgeted costs. We have an aging population on fixed incomes so rates increases of 10% are unsustainable. We can only contain costs if we have some say over planning.
There is still opportunity for people to bring private plan changes for development proposals. But the urban development strategy provides a community view. Look at Waimakariri District where they’ve had a lot of lifestyle development. Lessons of history tell us issues arise. People eventually want fire fighting mains, footpaths, roads, sewage schemes, water schools, medical centres, so you get a creeping development process that’s never been planned. We understand there is a connection between supply and demand and cost. But there’s no guarantee people won’t work together to keep land prices high (land banking).

NBR - Do you wish you’d never heard of the Ellerslie Flower show?

Parker – No. It’s a stunning success. We paid a one -off price and got the rights in a 10 year deal with the only company in New Zealand that’s ever been able to put on a flower and garden show that’s turned a profit. Previous councils wasted $500,000 trying to get an event off the ground. It never went anywhere. Private folk have tried without success. So this was a no brainer. We made a one off payment, we own it forever, and we have the intellectual property and the team who put it together. They can’t do it for anyone else unless we agree. It’s brought $30 million into the community (estimated spend by visitors) for $3 million (the price) in the heart of an economic recession at a time in the calendar when nothing else was on in Christchurch. We won’t change it from Autumn. We did initially want it in Spring to be honest. But we asked all the people involved and they said by far they wanted it in Autumn so we looked at weather patterns and chose the most settled period. We made a quarter million profit in the first year. This year we were affected by weather and there was a shortfall of $80,000 so the show is still in profit overall. We’re learning all time and it will get better.

NBR – what do you think are the strengths or weaknesses of Jim Anderton?

Parker – I don’t find the idea of being a part time mayor … it’s not something I would contemplate, it’s a seven day a week job. But that’s a choice the citizens will make. Whatever they choose, I’m at peace with that.

NBR - Any other irons in the fire?

Parker - I don’t have to contemplate that because I’m going to win.