22 Mar 2017

Wrangle over west Auckland development costs

5:50 am on 22 March 2017

Auckland Council and a large property developer begin confidential arbitration today over millions of dollars of costs in a west Auckland commercial development.

An impression of the centre.

An artist's impression of the Westgate shopping centre. Photo: Supplied

The council has spent around $80 million enabling the Westgate development by the New Zealand Retail Property Group (NZRPG).

However, there is disagreement over how some of those costs are shared and when they should be paid.

The Westgate development was triggered in 2004 by the former Waitakere City Council, which envisaged a self-contained town including housing, shops and a commercial area with 8700 jobs and 4000 residents.

Much of the land was already owned by developers, and Waitakere struck deals for it to invest early in infrastructure in return for a development that delivered that vision.

An auditor-general's report released this year concluded it was too early to tell whether that vision would be fully achieved, and what the final ratepayer costs would be.

Across a range of contracts, the report found ratepayers were carrying more risk than originally envisaged, on work such as the undergrounding of existing high voltage power lines.

The report found that of the $11.3m due to the council from the developer for the undergrounding only $3m had been paid by last September because of an agreement to delay the speed of repayment.

The council's spending also included public amenities in the area, such as a proposed library, the new town square, and a park.

Tensions over traffic island, road signs

Away from the confidential arbitration, tension between the council and NZRPG had been visible in disputes over roading and transport at Westgate.

A cross-road linking the original Westgate development with a new, larger stage on the northern side of Fred Taylor Drive, has been partially blocked for nearly two years in a dispute over a traffic island.

A 2009 deal gave the developers the legal right to occupy the traffic island, on which it built a large sign.

Auckland Transport (AT) wants to move the sign to open up the re-configured intersection, and remove what it said was now a safety hazard.

But property group NZRPG has refused AT's offer to pay for the sign to be moved.

In the same street, AT has also had to abandon an existing bus interchange, because when it bought the road, it did not buy the footpath on which the bus shelters are built, and the developer was now calling time on it.

Seperately, AT moved last month to stop the developer from issuing parking infringements to cars on a public road near the development.

A report will go to the confidential section of a full council meeting tomorrow, with a public update expected later.

NZRPG would not comment on Westgate prior to that report becoming public.

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