Property Industry Questions City Rate Rises

For immediate use – June 17

Property Industry Questions Central City Rate Rises

Two prominent members of Christchurch’s property industry are predicting increased pressure on central city retail, if what they describe as the Christchurch City Council’s “deliberate anti-business” practices of increased rates for business are voted in on June 23.

Antony Gough, Chairman of the Central City Business Association, and Layne Harwood, South Island President of the Property Council of New Zealand, say the city council’s Draft Annual Plan contains “significant and totally inequitable” general rates rises for the central city.

The pair say analysis of the proposed rate increases reveals a 27 percent rise for business properties, against a nil increase for residential properties for the 2008/2009 year. It also further widens the current differential in rates between commercial and residential rates.

“The council’s own figures in the Draft Annual Plan clearly show commercial properties will pay 68% more in general rates than residential properties for the same 2004 rating value,” they say.

“You’d expect the council to be shouting from the rooftops that there will not be an increase for residential rates in the next year – it’s a real coup.

“But it can’t do that without admitting it expects central city businesses to pay the bills through huge rate increases instead.”

Antony Gough and Layne Harwood say the plan suggests council is totally out of touch with the reality of trying to create a vibrant central city retail area.

“Pressure will come in two ways - property owners will have to pass on the increases to their tenants and so on to customers, and businesses will wonder whether it’s worth being in Christchurch at all,” they say.

“There’s a real risk of creating the donut effect, where the empty hole is the central city. It makes no sense to be upgrading the central city, if you are going to drive businesses out of it.”

Both men are members of the Property Council of New Zealand, a non-profit organisation representing all forms of commercial property and property investment in New Zealand. The PCNZ made written submissions on the city council’s Draft Annual Plan and followed it with oral submissions. Mr Gough followed that up by hand-delivering copies of his analysis of the rates increases to each councillor, with little or no response.

“We just don’t understand what the council is trying to do to our city,” they say. “Penalising the central city like this makes no sense. It will hurt everyone. Central city businesses pay high rates anyway by virtue of the high value of their properties, why penalise them and their tenants even further?”

“Cities like Melbourne have decreased rates applicable for central city retail by taking the opposite approach and supporting development within its city centre. This has encouraged more occupiers and business users and spread the cost. It has come by way of subsidy, enhanced streetscape, residential redevelopment and interaction of retail with the street physically. The result is a vibrant and successful city centre.”

ENDS

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