9 28 February 2017
30 January 2017
File: (17/96)
Report no: CDC2017/1/62
Review of Rates and Development Charges Remissions Policies
Purpose of Report
1. This report seeks a recommendation to Council to approve the draft Part 5 of the Rates Remission Policy “Rates Remission & Grants for Economic Development Policy” and draft Part 6 of the Rates Remission Policy “Hutt City Development Charges and Rates Remission Policy” for consultation in the Draft 2017/18 Annual Plan, to continue the role of Development Liaison Manager for a further 3 years and to include sufficient funding in the period 2017/18 to 2019/20 to fund the remissions, manager role and marketing of the policy.
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Recommendations That the Committee: (i) notes that Council, in support of its strategies and plans, has put in place policies to encourage economic development and development activity in the City. These are: · Part 5 Rates Remission Policy - Rates Remission for Economic Development; and · Part 6 Rates Remission Policy - Central Business District Development Charges and Rates Remissions Policy; and · Hutt City Development Charges Remission Policy;
(ii) notes the success of the existing policies to date of encouraging new development activity and business activity; (iii) notes it is proposed to amend the Part 5 Rates Remission Policy - Rates Remission for Economic Development to also include grants for qualifying businesses, applicable from 1 July 2017; (iv) notes the Hutt City Development Remissions Policy and the Part 6 Rates Remission Policy - Central Business District Development Charges and Rates Remissions Policy both expire on 30 June 2017. It is proposed to amalgamate these two policies into a single document being a new Part 6 Rates Remission Policy, make some amendments and apply the amended policy for a further period of three years from 1 July 2017 to 30 June 2020; (v) notes the current fixed term role of Development Liaison Manager that promotes, administers and manages the application of the policies with the development and business communities, ends with the expiry of the policies. It is proposed that the fixed term of this role be extended by 3 years; (vi) notes a current marketing fund is utilized to promote the current policies to the business and development communities. It is proposed that the marketing fund be continued for a further 3 years; (vii) notes that with the extension of remissions to 30 June 2020 it is proposed that a new budget allocation of $1M per annum for each of 2017/18, 2018/19 and 2019/20 be included in the Draft 2017/18 Annual Plan; (ix) notes that with the extension of remissions to 30 June 2020 it is proposed that the role of Development Liaison Manager and the marketing of the remissions be continued for a further 3 years and that a total budget allocation of $390,000 be included in the 2017/18 Proposed Annual Plan for these purposes; And recommends that Council: (x) approves the draft Part 5 of the Rates Remission Policy “Rates Remission & Grants for Economic Development Policy” attached as Appendix 1 to the report and the draft Part 6 of the Rates Remission Policy “Hutt City Development Charges and Rates Remission Policy” attached as Appendix 2 to the reportfor consultation in the 2017/18 Proposed Annual Plan; (xi) notes the new budget allocation of $1M per annum for each of 2017/18, 2018/19 and 2019/20 be included in the 2017/18 Proposed Annual Plan for the remissions; and (xii) notes that the role of Development Liaison Manager and the marketing of the remissions be continued for a further 3 years and that a budget allocation of $390,000 in total for the 3 years be included in the 2017/18 Proposed Annual Plan for these purposes. |
Background
2. Council has adopted a number of strategies and plans to grow the city economically in support of its vision for economic development in the city - to “Grow the Wealth of the City”.
3. In support of Council’s strategies and plans Council has put in place policies to encourage economic development and development activity in the City. These are:
· Part 5 Rates Remission Policy - Rates Remission for Economic Development (adopted 2003 - last revised 2014); and
· Part 6 Rates Remission Policy - Central Business District Development Charges and Rates Remissions Policy (2012 - revised 2014); and
· Hutt City Development Charges Remissions Policy (2012).
4. It is proposed to amend the Part 5 Rates Remission Policy - Rates Remission for Economic Development to also include grants for qualifying businesses, applicable from 1 July 2017. The revised Policy will be entitled “Rates Remission & Grants for Economic Development” the draft of which is attached as Appendix 1.
5. The Hutt City
Development Remissions Policy and the Central Business District Development
Charges and Rates Remissions Policy both expire on
30 June 2017. It is proposed to amalgamate these two policies into a single
document being a new Part 6 Rates Remission Policy, make some amendments and apply the amended policy for a period of
three years from 1 July 2017 to 30 June 2020. The new Part 6 will be entitled
“Hutt City Development Charges and Rates Remissions Policy”, a draft of which
is attached as Appendix 2.
6. The current fixed term role of Development Liaison Manager, which promotes, administers and manages the application of the policies with the development and business communities, ends with the expiry of the policies. It is proposed that the fixed term of this role be extended by 3 years.
7. A current marketing fund is utilized to promote the current policies to the business and development communities. It is proposed that the marketing fund be continued for a further 3 years.
Discussion
Proposed New Part 5 Rates Remission Policy - Rates Remission and Grants for Economic Development
8. Council adopted the current Part 5 Rates Remission Policy - Rates Remission for Economic Development in 2003, and last revised May 2014.
9. It is proposed to change this Part of the Policy as follows:
i. Add Grants for Economic Development
ii. Add Criteria and Guidelines for applications; including 4 mandatory criteria that must be met
10. The proposed changes are outlined in the tracked changes version of the Policy attached at Appendix 1.
11. It is proposed to add grants for economic development to enable Council to incentivise the location of new jobs in the city into existing buildings and premises.
Proposed New part 6 Rates Remission Policy - Hutt City Development Charges and Rates Remissions Policy
12. The current Hutt City Development Charges Remission Policy and the Central Business District Development Charges and Rates Remissions Policy expire 30 June 2017. These policies offers remission of development charges for certain types of development city-wide and in addition rates remissions for qualifying developments in the CBD.
13. At 31 December 2016, 100 applications for remission under the City-Wide Policy and 10 applications under the CBD Policy had been approved. $3.1M has been remitted in fees and rates to date. Nearly $250M of new development has been encouraged since these remissions were introduced in 2012, providing rates income of approx. $1.3M per annum.
14. Council’s Urban Growth Strategy aims for at least 6000 new dwellings in the city by 2032; an average of 300 each year of the 20 year strategy. Whilst building completion rate is increasing toward s this average, and well above historic rates, we are yet to meet this average. The table below shows how many dwellings are completed since the policies were introduced.
15. We are however seeing an exponential increase in building consents being issued for new dwellings. The graph below shows this increase in comparison to 3 other councils in the Wellington Region. With a lag between consent being issued and a dwelling being completed the number of completed dwellings should also continue to increase.
16. This data would appear to indicate that the current development charges remissions policies have worked in stimulating development. However with increased levels of growth required to meet the Urban Growth Strategy target it is recommended that the policies be continued for a further 3 years to 30 June 2020.
17. Anecdotal evidence suggests that the professional development community has been influenced by the remissions policy, in particular with greater intensity of residential dwelling construction and recent new commercial builds within the CBD.
18. Anecdotal evidence suggests mum and dad developers have been encouraged many to undertake developing 3 units on their land rather than just 2.
19. Continuing these policies is seen as important to encourage even more development in Lower Hutt and to ensure we meet our Urban Growth Strategy target.
20. Two additional areas we are keen to encourage redevelopment are Wainuiomata Mall and Naenae Shopping Centre. Allowing qualifying developments to receive rates remissions in a similar way to the current Lower Hutt CBD policy would make it more attractive to redevelop these town centres which service wider areas critical for future urban growth.
21. Encouraging more hospitality venues to establish in the Lower Hutt CBD would help make it a more desirable place to visit. Setting up a restaurant/café/bar is expensive; to help offset some of the costs we have included restaurant/café/bar in the definition of a Commercial Development.
22. To ease administration and promotion of the current 2 policies it is proposed to combine them into a single policy entitled Part 6 Rates Remission Policy - “Hutt City Development Charges and Rates Remission Policy”. The proposed policy is outlined in the tracked changes version of the policy attached as Appendix 2. The main changes are:
· Extension of the time period for qualifying developments until 30 June 2020; and
· Inclusion of restaurant/café/bar activity in the definition of Commercial Development
· Inclusion of rates remissions for qualifying developments of Wainuiomata Mall and Naenae Shopping Centre.
· The potential requirement of a guarantee.
· Minor wording changes for clarity.
Options
23. The Committee may recommend that either:
· the proposed draft policies as attached as Appendix 1 and Appendix 2 and the proposed financial considerations be approved by Council for consultation in Council’s 2017/18 Proposed Annual Plan; or
· the proposed draft policies as attached as Appendix 1 and Appendix 2 and the proposed financial considerations be approved with amendments by Council for consultation in Council’s 2017/18 Proposed Annual Plan; or
· the proposed draft policies as attached as Appendix 1 and Appendix 2 and the proposed financial considerations NOT be approved by Council for consultation in Council’s 2017/18 Proposed Annual Plan.
24. Officers recommend that the proposed draft policies are approved for consultation in the 2017/18 Proposed Annual Plan. Council has the opportunity to adopt, amend or revoke the policies after consultation.
Consultation
25. The draft Part 5 of the Rates Remission Policy “Rates Remission & Grants for Economic Development Policy” and draft Part 6 of the Rates Remission Policy “Hutt City Development Charges and Rates Remission Policy” and the financial considerations of these, if approved for consultation by Council, will be consulted on in the 2017/18 Proposed Annual Plan.
Legal Considerations
26. Under Section 85 of the Local Government (Rating) Act 2002 a local authority may remit all or part of the rates on a rating unit only if the local authority has adopted a rates remission policy under Section 109 of the Local Government Act 2002 and the local authority is satisfied that the condition and criteria in the policy are met.
27. If a policy is adopted the policy must be reviewed at least once every six years using a consultative process.
Financial Considerations
28. It is proposed that with the extension of remissions to 30 June 2020 that a new budget allocation of $1M per annum for each of 2017/18, 2018/19 and 2019/20 is included in the 2017/18 Proposed Annual Plan.
29. It is proposed that with the extension of remissions to 30 June 2020 that the role of Development Liaison Manager and the marketing of the remissions be continued for a further 3 years and that a total budget allocation of $390,000 be included in the 2017/18 Proposed Annual Plan for these purposes.
Other Considerations
30. In making this recommendation, officers have given careful consideration to the purpose of local government in section 10 of the Local Government Act 2002. Officers believe that this recommendation falls within the purpose of the local government in that it will help provide good quality local infrastructure and encourage economic development. It does this in a way that is cost-effective because it is administratively easy and is offset by the expansion of the rating base of the city.
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No. |
Title |
Page |
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1View |
Draft Part 5 - Rates Remission Policy Rates Remission and Grants for Economic Development - January 2017 |
16 |
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2View |
Draft Part 6 - Rates Remission Policy - Hutt City Development Charges and Rates Remission Policy - January 2017 |
21 |
Author: Parvati Rotherham
Development Liaison Manager, Lower Hutt Science Centre
Author: Gary Craig
Divisional Manager City Development
Reviewed By: Kim Kelly
General Manager, Strategic Services
Approved By: Brent Kibblewhite
Chief Financial Officer