Foodstuffs

Tuesday, 03 May 2016

Commercial development – vital to achieving long-term community growth

The recent Raeward Fresh Dunedin consent whilst pleasing on one hand does highlight some of the challenges currently faced by property developers. The stipulations that come with the consent, whether intentional or not, have made Foodstuffs South Island Ltd question the financial viability of the business. 

Roger Davidson, General Manager Property and Retail Development, says “We understand the need for legislation but it needs to be balanced with a pragmatic approach that gives communities the ability to enhance their neighbourhood both now and into the future.” 
Increasingly developers are faced with more difficulties, and costs, as they try and get a project underway. There are a number of fundamental assessments associated with gaining resource consent including traffic, planning, acoustic, geotech and hazardous substance reports and depending on whether the consent is non-notified or notified the costs can range from $50,000 to over $300,000 with the risk of a consent outcome that is not fit for purpose. 


There is a lot of uncertainty for developers due to the legislation being open to interpretation by various parties and the look of a building or development is often considered more important than its function. Davidson adds that this is commonly referred to as placing “form over function” which in turn may bring a whole development into question. 


“Imagine an airport gaining resource consent but one of the key stipulations is that it can’t have a runway because its considered visually unappealing,” says Davidson. “Would the airport still be considered viable?” 


According to Davidson this doesn’t have to be the case. 
“Many of Foodstuffs most successful developments have been a collaborative approach between Foodstuffs, local government and the community. A recent example of this would be New World Redcliffs, which is located in an area hugely impacted by the earthquakes and which was desperately in need of regeneration. The new store provided not only much needed jobs and supermarket services but boosted the confidence of the community and signalled the beginning of further investment in the suburb,” says Davidson. “And in the case of PAK’nSAVE Wainoni the council saw that the positive aspects of the proposal to re-build next to the existing store far out-weighed any negatives. By keeping the existing store operational we ensured 285 staff remained employed throughout the process, and the supermarket was able to continue meeting the grocery needs of the eastern suburbs community.” 


It appears that in case of Raeward Fresh Dunedin, there is a greater emphasis on preserving the integrity of an industrial zone over the benefits of promoting new investment and employment opportunities to South Dunedin. To use the conditions of a resource consent to restrict the type of products a business can sell appears to go beyond the bounds of what was intended by the Resource Management Act. The Act is there to protect the natural and physical resources for the benefit of current and future generations and provide for social and economic well-being, not rewrite the business models of applicants. 


“We have already gone to significant expense to get the application to this stage and based on the stipulation made we are now faced with going through the costly court process to re-establish what its business model is. Something which is somewhat perplexing when the hearing commissioners stated in their decision that the effects of our development on the surrounding environment ‘are no more than minor’,” says Davidson. “Unfortunately, this means we have no option but to reconsider our investment and explore other opportunities that present themselves, something which we believe is a real shame for the South Dunedin community.” 


The legislation is in place to protect communities and is important but, it can’t account for every eventuality. Ongoing development is critical to ensure the continued social and economic well-being of our communities is maintained, not only for us to enjoy today but for our children and our grandchildren but for many more generations to come. 

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