Wednesday, October 15, 2014

Picture of the day


Quay Street not so long ago showing Air New Zealand building (left) and Port of Auckland HQ building (right).Take a closer look at the HQ building. You can see here what it looks like today. Take a closer look at the pedestrian flow from Quay Street, under the HQ building, and potentially out onto Princes Wharf. Interesting and attractive. Full of potential. My research shows that the urban designers employed by Ports of Auckland then advised that this public space wasn't sucessful and that it would be better for everybody if it was infilled. Shades of QE Square thinking. Don't you think?

Urban Regeneration: ACPL / AWDA

As part of its review of Council Controlled Organisations (which has taken a couple of years so far), Auckland Council officers are looking closely at the formation of an Auckland Development Agency built around some sort of amalgamation of two existing CCO's - Waterfront Auckland (AWDA) and Auckland Council Properties Ltd (ACPL). Auckland Councillors and Board members have recently been provided with officer thinking on this public interest matter at a series of confidential workshops. My thinking a couple of weeks ago about this was posted here.

But time marches on. The briefings have occurred and people are talking about it.

It is useful to compare and contrast the activities of ACPL and AWDA. Most of us know what AWDA does because of its high public profile and because much of what it does is in the heart of the city. But ACPL maintains a low profile and most of its achievements are under the public radar. As far as I have been concerned as a commentator on such things, ACPL has come much more to my attention because of its role in Downtown developments as the council agency responsible for the sale, or change of use of, Queen Elizabeth Square - which is currently zoned "road" (not park or reserve).

This table enables easy comparison of the reported vision, goals, performance of these two CCOs. The data is drawn from respective Statements of Corporate Intent (2013-2016), and Annual Reports (for year ending 2014). The overlap between the functions of these two CCOs is reasonably clear, and the attraction of how to get the best out of both across the whole of Auckland through some sort of merger is also evident.


Topic

ACPL

AWDA
SCI Vision from 2013-2016ACPL's vision is to be a "centre of excellence" that provides commercial expertise and value for money to the Council in managing its property portfolio, acquisition and disposal activities, and the delivery of projects that implement Council development initiatives. The Waterfront vision, as set out in the Waterfront Plan, is for a world class destination that excites the senses and celebrates our sea loving business culturee and maritime history. It supports commercially successful and innovative businesses and is a place for all people, an area rich in character and activities that link people to the city and the sea.
SCI Goals• Properties managed for council and Auckland Transport are maintained to be fit for purpose and achieve optimum returns.
• Place shaping projects involving other sector partners, are efficiently planned and managed to completion.
• ACPL contributes exemplar housing developments to increase the supply of housing in Auckland, particularly in the more affordable spectrum of the market, working with partners.
• Council business interests on properties held in ACPL portfolio are managed to protect long term value and achieve budgeted net return.
• Properties are acquired for Council and AT in a commercially robust manner and in accordance with Council and AT agreed requirements and relevant legislation.
• Properties are disposed of on behalf of Council and AT in a commercially robust manner once declared surplus.
• Council is provided with a commercial perspective on planning and development initiatives to support effective implementation of those initiatives.
• A place for all Aucklanders and visitors to Auckland, a destination that is recognised for its outstanding design and architecture, natural environmental quality, public spaces, recreational opportunities, facilities and events; a place where we protect/enhance and express our cultural heritage and history, and celebrate our great achievements as a city and nation.
• Attracts high value innovative, creative and green businesses and investment that increases jobs and achieves a significant lift in productivity, a place for authentic and gritty waterfront activities: the marine and fishing industries, water transport and port activities.
• A place that is highly accessible, and easy to move around in, where people and communities feel connected to the wider city, harbour and beyond by improved pedestrian and cycling linkages, fast, frequent and low-impact passenger transit, state-of-the-art
telecommunications and through supportive community and business networks.
• A resilient place where integrated systems and innovative approaches are taken to enhance the marine and natural eco-systems, conserve natural resources, minimise environmental impacts, reduce waste, build responsibly and respond to climate change.
• The location of leading sustainable urban transformation in Auckland; the most liveable New Zealand central
city community; a vibrant mix of residents, workers, visitors and activities. A welcoming and resilient
neighbourhood that is safe, diverse and attractive, with plentiful open space and access to local services and facilities.
Annual Report extracts from Chairman and/or CEO• The value of the portfolio under the management and control of ACPL grew to more than $1.1 b. Auckland Council and Auckland Transport’s significant capital investment programmes that require property acquisitions contributed to the net portfolio growth during the year.
• A key part of obtaining value from Council’s property portfolio is the ongoing initiative to identify properties which are surplus... and obtaining approval...  for their sale. For the 2013/14 year ACPL had two targets focused on this initiative. The first target was to recommend $100m worth of disposals to the Council’s Finance and Performance Committee by December of 2013, a target which was exceeded... Unconditional sales total achieved was $19.1m, slightly short of $20.4m target.
• In response to our shareholder’s focus on the importance of increasing the supply of housing in the region, with an emphasis on the more affordable segment of the market, ACPL has been steadily increasing the range of its activities in facilitating these developments. A consequential impact is associated regeneration benefits for town centres, as many developments are close to town centres. Examples of our activities are:
- development progress with 3 hectare site in the Papatoetoe Town Centre, close to a rail station, where ACPL has: Progressed an 8 housing unit affordable housing development with the NZ Housing Foundation, which at year end was at earthworks stage; An MOU with Infratil for approximately 120 unit terraced housing development at the design stage; Sale of supermarket site to the operator with a commitment to redevelop; Approval of a business case to modernise the retail mall adjacent to the supermarket, with a view to a sale.
- ACPL concluded an agreement with the NZ Housing Foundation on a 34 unit site adjacent to the Avondale Town Centre. This will be a development with mixed housing sizes and price points. It will include a significant component of the Foundation’s shared equity approach to assist with the affordable housing challenge.
- 20 hectare site (at Hobsonville) will now be at least 10 hectares of housing with potentially all 20 hectares being housing depending on future demand for a marine precinct. This development will provide for hundreds of homes and have a significant affordable housing component.
- In a useful pilot, ACPL has concluded a development agreement with a private sector entity to redevelop a dated housing for older person’s village in Henderson. Using the proceeds of the site sale, together with an additional Council budget, the Council will receive 40 new housing for older persons units. In addition, a further 139 homes will be built, targeted at the over 55 market at reasonably affordable price points.
- The 20 hectare Ormiston Town Centre development being undertaken in partnership with Todd Property has reached building consent stage for the supermarket and for stage 1 of a terraced housing development which will comprise around 63 units. Approximately 300 further housing units will be included in later stages.
The AWDA annual report describes: private investment; public infrastructure; events and place-making; and marina.
• The waterfront has become an exciting and vibrant destination for visitors and locals. 73% of Aucklanders visited the waterfront during the year.
• Restaurants and cafes are thriving. New public spaces that represent the best in terms of design, sustainability and historical authenticity have been established and more are being developed. In July 2013, construction was completed on Shed 10, providing the city with a cruise ship terminal, and a new public space, on Queens Wharf. In December 2013, we finished the first stage of the Daldy Street Linear Park, a park of sculptural lawns, trees and rain gardens that collect and clean stormwater run-off.
• Businesses are also establishing themselves around the waterfront. Over 5,000 workers are now based in Wynyard Quarter. ASB moved over 1,300 staff into its Jellicoe Street head office in mid-2013, and they have injected a new energy into North Wharf and its surrounding area.
• After an extensive marketing campaign and Requests for Proposals, we have successfully negotiated development agreements with two local and one international investors/developers.
- Fu Wah International will build a 200 room, international standard 5-star hotel, which they will support through strong promotion of New Zealand as a tourism destination in China. The detailed designs for the hotel are currently being developed, and construction will begin in 2015.
- Willis Bond will develop over 90,000m of residential apartments (over 600 apartments). Detailed designs are being developed for approximately 28,350m of apartments which will be built in the first phase of development.
- Precinct Properties will develop approximately 48,000m of commercial space. Currently Precinct is working on detailed designs for approximately 14,300m of commercial space as the first phase of development and are promoting the development to the market.
• We are also working collaboratively across the Council and with other Council Controlled Organisations on areas where the waterfront intersects with the central city, such as Quay Street and Queens Wharf. This is to facilitate development that is complementary to ensure activity is coordinated, and resources and lessons about best practice shared.


Things to think about:

What I'll call the Queen Elizabeth Square fiasco has intensified the pressure on Auckland Council to develop an effective urban development implementation capability, and this pressure has coincided nicely with the current CCO review which has been seized upon by Council's Executive team. Good to have an excuse and an opportunity to do the right thing.

Councillors and Board members have been advised that the merged Auckland Development Agency (its recommended option) would: Master plan "renewal locations"; assemble land parcels for redevelopment; form partnerships; coordinate public infrastructure; provide financial incentives; facilitate planning consent. I generally agree with this approach. It reflects best practice and the New Lynn experience described links provided in this posting. But the briefing is silent on important matters.

It talks about "waterfront" and "location y" and "location x" and presents an urban renewal case study for Otahuhu to illustrate the function and form of a possible Auckland Development Agency. However it is silent on the most significant urban development and regeneration project that Auckland faces - and that is the development and regeneration of Downtown Auckland including Quay Street, Queen Elizabeth Square, Precinct Properties interest in the Westfield Shopping Centre, CRL enabling works, bus interchanges, etc, which are all illustrated in the Downtown Framework.

The City Centre Integration Group - CCIG (consisting of a few staff, a small budget, accommodated in Zurich House) has had some responsibility for what I will call "Downtown Auckland" but this is a massive development project and CCIG's limited focus on transport (key staff are on secondment from Auckland Transport) does not provide it with the skillset for the task of implementation. This project - set of projects - need to be included in the function of Auckland Development Agency. They will give it the scale and weight it needs to counter the transport infrastructure priorities of Auckland Transport, which should not be the drivers anymore for Auckland's urban redevelopment and regeneration.

Close reading (above) of ACPL's annual report shows it has an annual performance target: "to recommend $100m worth of disposals to the Council’s Finance and Performance Committee".  This target is designed to press ACPL to dispose of council-owned land. It is a iarget that will have been negotiated between Auckland Council and ACPL. Weeks before Auckland Council voted in principle to sell QE Square, ACPL wrote to local iwi about the possibility (because Council was obliged to first of all offer any land for sale to iwi first). It wrote in these terms:
"The Downtown Shopping Centre (DSC) is owned by Precinct Properties Limited (PPL) and it has suggested that it work jointly with Auckland Transport (AT) and Auckland Council to enable the tunnels to be constructed in conjunction with its desired redevelopment of the shopping centre.

The Council and AT have approved this in principle and PPL have been progressing design master planning to indicate the form of redevelopment. The work that PPL have carried out has clearly shown that a superior redevelopment can be achieved if QE11 Square is included within the development footprint.

QEII Square was originally reclaimed land and held by Auckland Harbour Board. It was subsequently transferred to Auckland City Council. QE 11 Square is currently a legal road.

Reports will be presented to the Waitemata Local Board and Auckland Development Committee in May to seek and confirm the intent to enable QEII Square to be included in the development planning of the DSC. If this is supported Auckland Transport will then manage a road stopping process. Furthermore, the land will be subject to commercial negotiations with PPL to ensure the Council receives appropriate consideration for the land.

In the adopted City Centre Master Plan it is recognised that the square needs enhancement. It is also considered essential that if this public space is developed that the amenity be replaced in the local vicinity. Council officers are working further on this. One possibility is to enhance or increase public space between Quay Street and the sea.

We invite you to review the details above and provide feedback to us on any site specific cultural significance issues iwi may have in relation to this proposal.

Please provide any feedback to xxxx, ACPL by 7 May 2014. Your input will be included in a report Auckland Development Committee on 15 May 2014 as key stakeholder feedback to support any decisions made on this proposal...."
This letter does not provide any comfort regarding ACPL's sensibilities around the public value of QE Square and the need for public spaces and places in Downtown Auckland. The emphasis in the letter is the sale of land to generate revenue for Auckland Council in accordance with ACPL performance targets. The emphasis is not the development of a piece of waterfront city for its citizens. And despite ACPL's place-making goal there is little evidence of any commitment to achieving that goal in the way it has approached the sale and use of Queen Elizabeth Square.

Which is why ACPL's skills need to be part of the Auckland Development Agency, but they cannot be the determining driver, especially when it comes to city centres and town centres where public amenity and the design of public places is so important.

Council's Auckland Development Agency proposals are silent on governance and public engagement. This was key to the success of urban regeneration projects in Perth where local councils (equivalent in size and function to Auckland's Local Boards) were institutionally involved in local redevelopment projects. Ensuring that local boards are integrated into the implementation of significant urban regeneration projects in their patch is essential to building local buy-in, and for providing a ready-made elected representative conduit to local stakeholders who - while they may not be land-owners - are the community who will live in and around the redeveloped town centre or neighbourhood development. This is just the sort of role that Local Boards were for. Development of "location x" or "location y" requires a some sort of institutional presence at "x" or "y" where locals can see what is planned, where consultation can be centred, which provides a shop-window for stakeholder and public engagement, and helps achieve community buy-in.

People need homes not houses

Another shock, horror, scandal, probe set of headlines and sound bites about Auckland house prices. Surely we need to get a bit of science and relevant statistics into the discussion and policy debate.

For example the price of housing in Auckland - as opposed to the price of houses - is falling, not rising. Recent reports indicate a shortfall in demand for rental properties. A report based on trademe data indicates that in central Auckland, the supply of rentals was up 5 per cent on the previous year while demand was down 2 per cent, and average asking rents declined by 1 percent. I accept there is a shortage of rental properties given rising levels of inequality and poverty which means many people cannot easily afford these "low" market rents.And that's where discussion that distinguishes social housing from market housing is important. That's the sort of nuanced discussion that should happen in a large western city.

Yet, as economist Keith Rankin notes, rapidly increasing Auckland house prices means that something must be in short supply; that is, in excess demand. But in his view that something is not houses, but financial assets. Houses - and especially the land that they sit on - fit the characteristics of financial assets to investors - whether they be local investors or overseas investors. And to buyers, houses in Auckland increasingly represent financial assets and decreasingly represent accommodation. It doesn’t matter how many houses are built – provided it’s not a total crazy oversupply – there will always be buyers for them because at present Auckland houses are a great investment, but not because someone actually needs to live in them.
Late Item:  17 Oct 2014 Media release from ANZ headlines: "Regulations threaten property growth, say investors. Residential property investors are still confident, growing and looking to buy more properties despite growing interest rates - but many would consider selling up in the event of proposed new regulations...". This same media release contains data from a survey of property investors:
  • "....Investors expect property values to grow by 4.8%, and rents by 2.8%, over the next year. Longer term rent expectations are higher, at an average of 4% per annum over the next five years.
  • Expectations for value and rent rises are highest in Auckland and Christchurch. Auckland investors expect property values to grow 50% faster than the national average.
  • The proportion of investors with seven or more investment properties has risen from 14% to 26% since 2010. Most of this growth is among investors who have most of their properties in Auckland or Canterbury...."
The data confirms the economics - returns come from capital value increases, not from rents. You don't have to be a rocket scientist to understand the implications of this information which confirms the fact that housing has become a lucrative business, in New Zealand. "Property growth" mainly benefits housing investors. Not those wanting a home. It is clearlky time for the sort of regulation that would encourage these investors to "sell up" and find something more useful to do with their money.

That economic reality is what suggests there is a need for some sort of policy instrument - like a capital gains tax - that would disincentivise this financial asset aproach to the house market. But that's not what this posting is mainly about though this disconnect needs to be recognised, understood and addressed by public policy in New Zealand, as it has been in developed countries such as Germany and Japan. Rankin reports that in those countries, if you want somewhere to live you rent a house, or an apartment. That is modernity. Further, housing is priced essentially according to its rental yield. To their owners, rental houses and apartments are financial assets; but they are basic bread and butter assets, priced by yields. They are not speculative assets, priced on the expectation of leveraged capital gains.

At least there is a move to look at a variety of statistics when reporting housing affordability in New Zealand. The most misleading statistic is reliance on the Demographia survey for housing affordability which uses a very simplistic measure - the median house price to median gross household income ratio. This is a damned statistic and its unqualified use to compare housing affordability between countries is almost a lie.

Using gross household income is an inappropriate way to determine household spending power, because the spending power of a household is based on the amount of gross income remaining after costs are deducted for essentials such as taxes, food, transport, clothing etc. Differences in tax rates and cost of living pressures across various countries make a comparison of spending power based on gross income meaningless.

But the worst part of Demographia’s data is that it fails to consider either dwelling size or housing type. Houses in New Zealand are, on average, the largest in the world, so when comparing median houses it is important to note that a median dwelling in New Zealand is much larger than a median dwelling in the other countries. So on average a median dwelling in New Zealand, being bigger, will cost more to build and occupy more land, than its median equivalent in many other comparable OECD countries. Demographia data overstates median prices for New Zealand because it is largely based upon “house” prices, and does not take proper account of units and townhouses and other sorts of home accommodation units that are traded and which should count as homes – even if they are not average sized “houses”.

A house may be a home, but increasingly in Auckland and large Australian cities, and mostly in big OECD cities, a home is not a house. That is the cause of another major failing with the Demographia survey is its measure of median house price. Its Australian figures only include freestanding houses. They don't include units or townhouses, meaning that Demographia are overstating median house prices in Australia compared to the other countries assessed in their survey (countries where units and townhouses are included when calculating the median house price).

The study that I have looked at closely and which appears far more useful when looking at what is happening in Auckland is the NUMBEO study which you can find on the web. This is now one the largest and most data rich sources of cost of living and housing price data in the world. The housing survey data quoted by NUMBEO is described on its website. They use Price to Income Ratio as the basic measure for apartment purchase affordability. It is the ratio of median apartment prices to median familial disposable income, expressed as years of income.

NUMBEO’s affordable housing formula assumes and uses:
• net disposable family income, as defined as 1.5 * the average net salary
• that the average apartment has 90 square meters
• its price per square meter is the average price per square meter in city center and outside of city center


Other affordability statistics that are reported, by country, include: Mortgage as Percentage of Income which is a the ratio of the actual monthly cost of the mortgage to take-home family income (average monthly salary used to estimate family income). It assumes 100% mortgage is taken on 20 years for the house (or apartment) of 90 square meters where the price per square meter is the average of price in city center and outside of city center, and this gives its Loan Affordability Index which is an inverse of mortgage as percentage of income.

In some ways this survey is like Demographia's - ie that it calculates a ratio of median prices to median family incomes. However when analysing affordable homes (as opposed to just houses), then it is more useful to survey the types of homes that are generally purchased by young families and couples starting out on the housing ladder. And for most cities in the world, the starting point is NOT a freehold 200 square metre floor area, three bedroom house on 400 square metres of land (and costing $500,000 according to Bill English). The starting point is a relatively inexpensive apartment. The NUMBEO survey reports affordability of 90 square metre apartments.

In 2013, according to this survey, New Zealand ranked 21 (with a Price to Income Ratio of 6.40), while the USA was 1 (Price to Income Ratio of 2.16), Germany, Canada and Ireland ranked 8, 9 and 10 respectively. Australia ranked 32. And so on.

For the affordability index which considers the cost of a loan (assuming it is taken on for a 20 year period), which uses interest data from each country and such like, New Zealand ranks 24th in affordability (with 1 - the USA - being most affordable), and places like Belarus and Ghana being least affordable and ranking 100 or more. It should be noted that in this survey countries like Sweden, Australia, Italy, Egypt rank as less affordable than New Zealand.

In Auckland we need to be measuring and comparing data that helps us focus on change and on policies that will make a difference, rather than using discredited surveys that only exist to reinforce a particular party line that is all about removing development costs and improving conditions for developers so they can be effectively subsidised to build relatively expensive and large homes.

We know that the average NZ home has been increasing in floor area for the past 20 years or more, and that the number of occupants/home has been decreasing on average. This is inconsistent with the policy objective of increasing the supply of affordable homes, because internationally, affordable homes in urban environments are apartments.

And to finish another piece of trademe research, I looked today for an Apartment, Townhouse, or Unit, for $350,000 or less, in the Auckland Region and found there were 641 listings. I didn't look through them all but skimmed the first 70 or so, and found some between $100,000 and $150,000, plenty between $200,000 and $300,000. Time reporting and public policy learned not all homes in cities are on 1/4 acre sections.

Herbicides mainly kill plants

It was a disturbing headline: Weed killer closes dams, and it was right and proper that the article should concentrate on risks to human health. But this practice is not novel from Watercare, only the herbicides (pesticides) have changed.

Many years ago (1994-1997) I strongly resisted proposals to pipe Waikato River water up to Auckland for town supply. Treatment proposals proposed by Watercare then included sand-filter treatment and chlorination. My concern was what was in the raw water from dairy and agricultural runoff and from the ten plus wastewater discharges that were upstream of the proposed Watercare intake. My particular concern was giardia and cryptosporidium cysts and a benefactor helped me engage the services of a microbiologist to prepare expert evidence.

But I wasn't the only person concerned and ready to go to court to resist these proposals. A lone tomato grower put in submissions. He grew tomatoes hydroponically on his farm at Papakura, under plastic cover, and he used Watercare town supply for irrigation. Until he noticed that his tomatoes were failing, leaves curling up and other problems, and he engaged the services of a forensic scientist. He came to the conclusion that the tomatoes were being affected by organochlorine based chemicals. To cut a very long story - one that went all the way to the House of Lords - short, suffice to say that it was discovered that Watercare had been applying herbicide to vegetation (gorse) in the Hayes Creek dam catchment, that some of this had washed into the lake, and it got into the town supply, which the tomato grower was using to water his plants.

It transpired that cherry tomatoes are very sensitive to organochlorine contaminants, but that humans were much less sensitive, though the question of residuals and dioxins and suchlike remained unanswered. The point being that some plants can be VERY sensitive to certain pesticides/herbicides. And this is the case with the herbicide metsulfuron-methyl which is now being used by Watercare (what plants is it seeking to control in the forest and native bush Hunua catchments anyway? What effect does metsulfuron-methyl have on native vegetation, and what risk is there of spray drift damaging mature native trees - as has happened in USA?)

It's not good enough to say that the risk to human health is minimal. There are other risks that need to be managed. And the levels of contamination that cause damage to plants can be much lower than the levels that affect human health.

Just finishing the Waikato Pipeline story, after the submissions made by me and the tomato grower, Watercare agreed to add two further stages of treatment to water drawn from the Waikato. It added an activated carbon bed stage to control any organochlorine contaminants that might arise from Waikato farm herbicide and pesticide runoff, and it added a nano-filtration stage to ensure that giardia and cryptosporidium cysts could not enter our drinking water supply.

But the best thing to do, when you have raw water catchments in bush catchments like the Hunuas and the Waitakeres, is to put no contaminants into them in the first place.

Downtown Bus Station Priority

There's a lot of chat, some secrecy, and little public discussion about what's going to happen with buses downtown once they are shunted out of Queen Elizabeth Square and Lower Queen Street.

The Downtown Framework - despite coming out of Auckland Transport run CCIG - provided cursory back-of-envelope ideas to handle displaced buses by shoe-horning them into little Britomart lanes, and terminating Northern Busway services - and others - in Lower Albert Street. This was appropriately panned by Rudman. There has been some blogger discussion about what to do with buses, and a little bit of history of mistreatment of buses, including my posting.

Here's a few pointers:

In July, Anne Gibson ran an interesting piece about Precinct Properties taking "a team to San Francisco last month to study a new 62-level waterfront skyscraper rising above an underground railway there...." Maybe Precinct Properties are way ahead of Auckland on this. Because it's not about trains - for Precinct Downtown - it's about buses. Wouldn't it be sensible for Auckland Transport and Precinct Properties to work together - not just in making room for the CRL enabling works and tunnel - but in including a bus station under its 41 storeytower, with pedestrian connections to the retail offerings there, and rapid transit connections to many Auckland destinations for those living in the apartments?

If current government sticks to its guns then Auckland Council will not be able to build the CRL until 2021, but it can start it. It can build, under its own steam, the CRL "enabling works" and tunnel from Britomart, under QE Square, and more or less to intersection of Lower Albert Street with Custom Street West. One of the interesting conversations I had about this bit of work is that this new section of rail has significant utility in its own right - without the rest of the CRL. Why? Because of the ability to stack trains up the tunnel, allowing more to enter. or leave, Britomart Station/hour, and avoid/bypass the constraint imposed by the fact only 3 lines enter Britomart. For example, being able to stack trains in am peak would mean trains could enter the station at around twice the frequency as at present - for an hour maybe - because emptied trains would pull forward into the stack, leaving room for the next full train immediately, instead of waiting for the empty train to reverse out. Think of that. A big capacity gain. And it would work just as well when there was a big event (let's say the warriors at Mount Smart), where empty trains could stack taking office workers to Penrose, train after train, not having to wait for empty ones themselves delayed waiting full trains to depart.

I wonder whether anyone has done the cost benefit comparison of incentivising Precinct to incorporate a bus station into its development (supported by some undergrounding of buses along Custom Street) and improving downtown pedestrian amenity once dominated by buses, versus only building the CRL?

Friday, October 3, 2014

Fine Day on Wellington Waterfront


Mayor Leaves Mess to Councillors

Maybe it was the General Election result. No-one seems to know. Least of all Auckland Councillors. Around that time, without warning, Mayor Len Brown packed his bags and took himself and family off on a one month family-time holiday. He's gone for another couple of weeks I understand.

He's left Council and Councillors various messy jobs to do. Like workshopping through a Long Term Plan that requires difficult decisions - including achieving significant cutbacks in Auckland Transport's budget, and other contentious reductions. And like managing the Downtown redevelopment project and moving the Central Rail Link project along. And getting to the end of the CCO Review process - which I post about here. And engaging with a new incoming Government.

The biggest mess of the Len Brown era will unquestionably be the debt explosion from around $3 billion when he and the incoming councillors took office in October 2010, to almost double that now, and with budget plans (that Councillors are struggling to change right now) that would blow debt out to $13.7 by 2025. You can see the numbers that councillors are dealing with summarised in this NZ Herald report.

Apart from that stuff, every day there are issues for Auckland Council to deal with. That's what it's like in local government. You expect that. Some are big (like those above - which need careful management, and eventually get dealt with by a committee or council decision) and some are small. Big decisions don't just get made on the committee-decision day though. There is a lot of officer and political work that needs to be done before they finally come up for decision.

So how's all that work get done between committee meetings?

My understanding is this:
  • Before Len took his holiday, the political management structure that involved mayor and councillors consisted of weekly meetings chaired by the Mayor, attended by the Councillors who Chair Committees of all Councillors ("Committees of the Whole" chairs are: Penny Hulse, Penny Webster and George Wood), by the Chief Executive Officer (Stephen Town), and the two Councillors who also sit on the Board of Auckland Transport (Mike Lee and Christine Fletcher). The idea was to keep the meetings small and functional. Sometimes one or two officers would attend. It seems this approach got off to a good start, but after a while the Mayor became bored or distracted - who knows, and would leave meetings or just not turn up, and when he was not there Penny Hulse as Deputy Mayor would take the chair.
  • After Len took his holiday these meetings shifted to the 15th Floor of Civic Building, where Deputy Mayor Hulse has her office. I understand these are attended by the same Councillor Senior Chairs (not sure about the AT councillors), and instead of the CEO, they are attended by Council's Chief Planning Officer, Chief Financial Officer, and Chief Operating Officer. They are usually attended by a senior officer from the Mayor's Office. Acting Mayor Penny Hulse chairs them.
Little to no contact is occurring with the Mayor, who is presumably quite out of touch with what is happening and evolving at a crucial time for Auckland, and for Auckland Council.

I well recall - from my time as councillor - the critical period immediately following a General Election. Councillors and General Managers would meet with the Chief Executive to assess the lay of the land in Wellington, weigh opportunities for intervention, prepare briefings for the incoming Cabinet, design a strategy for engagement, and send a weighty delegation down to meet with and lobby the PM and Senior Ministers before they became absorbed in an onerous Parliamentary timetable. And that's before formation of the Supercity amalgamation for a third of the country. As far as I am aware, nothing like this has happened, yet, from Auckland Council, and the opportunity is fast disappearing, if not gone already.

Is this important? Hell yes. For a start there are proposed changes to the Resource Management Act that will make redevelopment and development easier for the building industry, and provide fewer protections for existing communities. There are proposals to cut back development contributions that are needed to fund infrastructure construction. And that's the tip of the iceberg. The biggest need for a deal to be negotiated and done with the incoming government is over the funding of the Central Rail Link. National and Labout indicated it would fund 50%, Greens promised 60%, NZ First 75%. In other countries this sort of expensive and economically transformative infrastructure is 100% funded by state or central government. As important as state highways.

But none of this negotiation has occurred, and as far as I'm aware from my chats with councillors no planning for it has been discussed. Auckland Council stays meekly at home and waits. No initiative to talk turkey with central government has been taken. Who's to blame for that?

It is unfair to blame the temporary political management structure that was quickly put in place when Len suddenly took himself off. Normally (if there's such a thing), the Chief Executive would develop a plan with the Mayor and senior staff, and a process would quickly unfold. But nothing seems to be normal about Auckland Council. It's still in a turmoil of transition, facing the threat of significant cuts as it rejigs its Long Term Plan, managing 500,000 submission points on its draft Unitary Plan, still talking about the Southern Initiative (no-one seems to know what it means), and dealing with various elephants like the CRL and Ports of Auckland.

Downtown, QE Square and Quay Street almost pale into insignificance.

And the Mayor is not here. Would it be better if he was? At least there'd be an elected person in the Mayor's office - some of the time. And some of the difficult political work that Penny Hulse has been shouldering with a smile could be shared. That would be something. But the problem Auckland has when the Mayor is here, is that what he's good at is being a cheerleader for the last good idea he's heard, and what he's bad at is figuring out how all his ideas fit together and get paid for. He's so good at selling ideas that most people buy them, and only later find out what they cost, and then it's a mess, and then he's away for the day.

What I sense from my chats with many councillors is that there is growing awareness that they need to get together and work as a team - without relying upon an elected leader or being able to depend upon the mayor's office. Penny Hulse and her group of chairs need support from other councillors, so that Council can respresent the views of the community, and not be pushed into decisions by anxious officers frustrated at the governance impasse. It is understandeable that officers may wish to impose their solutions to Auckland's problems, but shortcuts can take longer. Quick decisions are usually poor decisions, and any council decision is always difficult to reverse.

Work as a team. Show collective leadership, and govern Auckland.

Review of CCO Review

Auckland council has been reviewing its Council Controlled Organisations for a long time now, but next week, with a hiss and a roar, Auckland Councillors (Tuesday 7th) and Local Boards (Wednesday 8th) will get the first taste in confidential workshops of what officers have come up with and various options and restructuring. The council's website describes the review like this:
The review is an opportunity to investigate if there is a need to change any council or CCOs’ activities, functions, structures or the ways in which they operate. Its aim is to ensure Aucklanders are getting efficient, integrated services and value for money. The review will also provide confidence that the council group is fully accountable to ratepayers and elected representatives. Many different opportunities for council and its CCOs to work better together will be investigated as part of the review. At this stage it is too early to tell whether this might include any structural changes. Please note that the structure of Auckland Transport is governed by its own legislation and is beyond the scope of this review. Findings from the review will determine whether any major changes to existing council and CCO structures or service delivery models are recommended. Any such changes would be clearly identified and publicly consulted on through the 2015-2025 long-term planning process.
There has been some media comment about the process. For example an NZ Herald March 2014 editorial concludes: "The council-controlled organisations have played a major role in bedding in the Super City and moving Auckland forward over the past three years. Greater council direction of their activities could threaten their effectiveness. In time, some aspects of their operation may need to be refined. But in almost all aspects, now is too soon....".

Apparently several Auckland Councillors have echoed this sentiment in confidential workshop sessions that have been held over the past couple of years. This view is along the lines, "we've been elected to govern Auckland Council and Organisations that were established by Government legislation after a Royal Commission of Enquiry and expert advice - we've not been elected, and nor do we have the expertise, to tamper with it. We should leave it alone....."

I've been talking with Auckland Councillors about the review for a couple of years, and this posting contains my feedback - for what it's worth - to councillors as they go into these workshops next week.

My biggest beef, (as an opinionated councillor) with the CCO's when they were set up in 2010 was that Watercare was not set up as a Three Water entity with responsibility for stormwater alongside water and wastewater services. That sort of integrated approach was the norm for Waiatakere City Council and North Shore City Council, and was aimed at delivering a more water sensitive urban environment. Many shared my view about this, but it was not to be in 2010, and it seems, despite suggestions from some councillors, it's not to be in 2014 either.

This NZ Herald report, almost 2 years ago, about the CCO Review, had this to say: "A source said the council was actively exploring merging four CCOs into two and scrapping Auckland Council Investments altogether. Waterfront Auckland could be rolled into Auckland Council Property. The same goes for Auckland Tourism, Events and Economic Development (Ateed) and Regional Facilities Auckland...."

From what I understand it appears that the upshot of two years work is that Auckland Council Property Ltd should be merged with Auckland Waterfront Development Agency to form an entity that could be known as Auckland's Urban Development and Regeneration CCO.

This sounds like a great idea. It's got potential. Many have been arguing that Auckland Council's Unitary Plan and Special Housing Area policies lack an implementation arm. I wrote about this last year in this posting:
"...the method is an Urban Development Structure Plan for each Urban Development Area. The mechanism is an Urban Development Agency established to make, and manage the implementation of, each Urban Development Structure Plan. The rationale, or exemplars, for this approach are the Public-Private-Partnership urban regeneration projects that have been successfully implemented in Australian cities...."
 This refers in particular to Urban Redevelopment Agencies used for urban regeneration in Perth in particular, because a whole group of Councillors - including Penny Hulse and Linda Cooper - went to Perth on a week long study tour to see how they did it there when we visited three different parts of the city that had undergone, or were undergoing, some form of urban regeneration. This visit is described quite visually in this posting and concludes:
"...what Perth learned from this sequence of three brownfield regeneration projects. None of these projects are the same of course, but the things they had in common were these: public money kick-start; tailor made regeneration agency for each community/project; 3-5 year master planning timeframe (remember - much of this is time invested in getting community buy-in and amalgamating land where needed - let alone getting infrastructure plans in place and funded); strict requirements around the provision of affordable housing (which is quite distinct from social housing)...."
 One of Auckland's first urban regeneration projects is New Lynn town centre. It has been successful in some ways, and there are some aspects that have been criticised. Every bit of urban regeneration is a learning experience. Urban regeneration is a relatively recent activity in Auckland, partly because we are a relatively young city, and also because the pressures for urban change have been slow. European and US cities have been engaged in urban regeneration projects for over fifty years now, and a lot of experience has been gained about the process that we can usefully learn from here in Auckland. One of the key learnings is that urban regeneration institutions require a different sort of local government culture than is usually found in a Council. A few extracts from UK manuals:
The new skills that managers of regeneration need. “…not only are they taking on roles as community champions or leading change processes, but the increased need to work in partnership with communities or partners beyond their own organisational boundaries, and stimulate cultural changes, have implications on how they perceive their roles…”

The significance of leadership in engaging stakeholders, and the: “….messy and ambiguous settings lead managers to attempt to make sense and develop some order and clarity…”.

Best practice in the modern public sector environment now demands:
1) Citizen involvement
2) Greater democratization
3) The need to build capacities and improve quality and performance
4) A requirement for skills mixes located in different people at different times
5) An understanding that no one organisation or person possesses all the skills and competencies to undertake activities
6) Effective performance by regeneration managers, who synthesise past experiences, skills, knowledge, behaviours and competencies within organisational, but increasingly in cross-boundary, settings.

The most significant take-away for Auckland is that regeneration demands a different way of thinking and behaving from public officials, and that they also need to respond and change in a dynamic and changing environment. Emphasis is placed on the need for organisational and managerial behaviours that “learn”, and that “public learning” requires a systematic approach to:
1) Develop a shared understanding of current realities and vision for the future;
2) Develop questions on gaps between current and desired state, in order to agree publicly with stakeholders on the way ahead;
3) Develop a climate or culture in the parts of their own organisations to gain commitment and combat coercion;
4) Challenge rhetoric of competition with collaboration and partnership;
5) Place a high value on learning in human resource processes and performance and appraisal;
6) Develop and value a learning ethos, discourage action fixated behaviours;
7) Reinforce learning, discourage competition and short-term target setting, and incorporate into pay and reward systems.
So what does all this mean for the CCO review, and the recommendation that the Auckland Council Property (ACPL) and Waterfront Development (AWDA) CCOs be merged. Cutting to the chase here. There is a clear need for some form of Urban Regeneration Implementation agency in Auckland. It is also clear that the Waterfront Development Agency, which has grown and been developed over the past 7 or 8 years from its Auckland Regional Council Sea + City days, has done a great job so far at Wynyard Quarter. It is well known that AWDA employs specialist and talented people. It is probably less well known that AWDA as an institution exhibits many of the characteristics of urban regeneration excellence mentioned above.Which is partly why AWDA rates so highly in Auckland Council's Staff Engagement Survey which measures job satisfaction, feeling valued at work, able to apply skills and such like. This sort of working environment is highly attractive to skilled staff.

I think the rest of Auckland could benefit from the knowledge and experience that has developed within AWDA, but only if the culture and institutional style that allowed and encouraged AWDA to develop as it has, continues in any merged structure...
This is my suggestion. There will be all sorts of options. The thinking behind this, apart from best practice advice about the need for appropriate institutional culture and approach, include:
  • the need to separate Auckland Council planning and budgetting responsibilities from CCO implementation responsibilities and activities. Thus it may be appropriate for implementation oriented activities presently located in Auckland Council's city centre planning department to be seconded or included within AUDRC (Auckland Development and Regeneration CCO).
  • the need to establish fit-for-purpose-entities to manage particularities of urban brownfield projects. These should have a presence on location. Manukau towncentre for example - part of the Southern Initiative. New Lynn was an example. Like Perth examples. One size does not fit all. Entities need to be tailor made, supported by CCO specialist staff.
  • city centre waterfront regeneration requires different skillset. Particular attention to and knowledge of: reclaimed land; stakeholder relationships with marine industry and port facilities; ferry and fishing traffic; management of city centre public places; leasehold land tenure; large scale developments like ASB and Hotel.
  • there are opportunities for cooperation between CCIG and AWDA, so that AWDA implementation skills are deployed elsewhere along Auckland's waterfront.
Councillors and Local Board Members, best of luck for next week and future decision-making about CCO's. My key advice: "don't throw the baby out with the bathwater."

(Expression of Interest: Joel was an ARC Councillor when its entity Auckland Regional Holdings established Sea + City Ltd as the development agency for Wynyard Quarter, and while SEA + City proceeded with associated planning between 2005 and 2010.  Joel was engaged until recently by Auckland Waterfront Development Agency to provide planning services as part of its challenge team.)


Wednesday, October 15, 2014

Picture of the day


Quay Street not so long ago showing Air New Zealand building (left) and Port of Auckland HQ building (right).Take a closer look at the HQ building. You can see here what it looks like today. Take a closer look at the pedestrian flow from Quay Street, under the HQ building, and potentially out onto Princes Wharf. Interesting and attractive. Full of potential. My research shows that the urban designers employed by Ports of Auckland then advised that this public space wasn't sucessful and that it would be better for everybody if it was infilled. Shades of QE Square thinking. Don't you think?

Urban Regeneration: ACPL / AWDA

As part of its review of Council Controlled Organisations (which has taken a couple of years so far), Auckland Council officers are looking closely at the formation of an Auckland Development Agency built around some sort of amalgamation of two existing CCO's - Waterfront Auckland (AWDA) and Auckland Council Properties Ltd (ACPL). Auckland Councillors and Board members have recently been provided with officer thinking on this public interest matter at a series of confidential workshops. My thinking a couple of weeks ago about this was posted here.

But time marches on. The briefings have occurred and people are talking about it.

It is useful to compare and contrast the activities of ACPL and AWDA. Most of us know what AWDA does because of its high public profile and because much of what it does is in the heart of the city. But ACPL maintains a low profile and most of its achievements are under the public radar. As far as I have been concerned as a commentator on such things, ACPL has come much more to my attention because of its role in Downtown developments as the council agency responsible for the sale, or change of use of, Queen Elizabeth Square - which is currently zoned "road" (not park or reserve).

This table enables easy comparison of the reported vision, goals, performance of these two CCOs. The data is drawn from respective Statements of Corporate Intent (2013-2016), and Annual Reports (for year ending 2014). The overlap between the functions of these two CCOs is reasonably clear, and the attraction of how to get the best out of both across the whole of Auckland through some sort of merger is also evident.


Topic

ACPL

AWDA
SCI Vision from 2013-2016ACPL's vision is to be a "centre of excellence" that provides commercial expertise and value for money to the Council in managing its property portfolio, acquisition and disposal activities, and the delivery of projects that implement Council development initiatives. The Waterfront vision, as set out in the Waterfront Plan, is for a world class destination that excites the senses and celebrates our sea loving business culturee and maritime history. It supports commercially successful and innovative businesses and is a place for all people, an area rich in character and activities that link people to the city and the sea.
SCI Goals• Properties managed for council and Auckland Transport are maintained to be fit for purpose and achieve optimum returns.
• Place shaping projects involving other sector partners, are efficiently planned and managed to completion.
• ACPL contributes exemplar housing developments to increase the supply of housing in Auckland, particularly in the more affordable spectrum of the market, working with partners.
• Council business interests on properties held in ACPL portfolio are managed to protect long term value and achieve budgeted net return.
• Properties are acquired for Council and AT in a commercially robust manner and in accordance with Council and AT agreed requirements and relevant legislation.
• Properties are disposed of on behalf of Council and AT in a commercially robust manner once declared surplus.
• Council is provided with a commercial perspective on planning and development initiatives to support effective implementation of those initiatives.
• A place for all Aucklanders and visitors to Auckland, a destination that is recognised for its outstanding design and architecture, natural environmental quality, public spaces, recreational opportunities, facilities and events; a place where we protect/enhance and express our cultural heritage and history, and celebrate our great achievements as a city and nation.
• Attracts high value innovative, creative and green businesses and investment that increases jobs and achieves a significant lift in productivity, a place for authentic and gritty waterfront activities: the marine and fishing industries, water transport and port activities.
• A place that is highly accessible, and easy to move around in, where people and communities feel connected to the wider city, harbour and beyond by improved pedestrian and cycling linkages, fast, frequent and low-impact passenger transit, state-of-the-art
telecommunications and through supportive community and business networks.
• A resilient place where integrated systems and innovative approaches are taken to enhance the marine and natural eco-systems, conserve natural resources, minimise environmental impacts, reduce waste, build responsibly and respond to climate change.
• The location of leading sustainable urban transformation in Auckland; the most liveable New Zealand central
city community; a vibrant mix of residents, workers, visitors and activities. A welcoming and resilient
neighbourhood that is safe, diverse and attractive, with plentiful open space and access to local services and facilities.
Annual Report extracts from Chairman and/or CEO• The value of the portfolio under the management and control of ACPL grew to more than $1.1 b. Auckland Council and Auckland Transport’s significant capital investment programmes that require property acquisitions contributed to the net portfolio growth during the year.
• A key part of obtaining value from Council’s property portfolio is the ongoing initiative to identify properties which are surplus... and obtaining approval...  for their sale. For the 2013/14 year ACPL had two targets focused on this initiative. The first target was to recommend $100m worth of disposals to the Council’s Finance and Performance Committee by December of 2013, a target which was exceeded... Unconditional sales total achieved was $19.1m, slightly short of $20.4m target.
• In response to our shareholder’s focus on the importance of increasing the supply of housing in the region, with an emphasis on the more affordable segment of the market, ACPL has been steadily increasing the range of its activities in facilitating these developments. A consequential impact is associated regeneration benefits for town centres, as many developments are close to town centres. Examples of our activities are:
- development progress with 3 hectare site in the Papatoetoe Town Centre, close to a rail station, where ACPL has: Progressed an 8 housing unit affordable housing development with the NZ Housing Foundation, which at year end was at earthworks stage; An MOU with Infratil for approximately 120 unit terraced housing development at the design stage; Sale of supermarket site to the operator with a commitment to redevelop; Approval of a business case to modernise the retail mall adjacent to the supermarket, with a view to a sale.
- ACPL concluded an agreement with the NZ Housing Foundation on a 34 unit site adjacent to the Avondale Town Centre. This will be a development with mixed housing sizes and price points. It will include a significant component of the Foundation’s shared equity approach to assist with the affordable housing challenge.
- 20 hectare site (at Hobsonville) will now be at least 10 hectares of housing with potentially all 20 hectares being housing depending on future demand for a marine precinct. This development will provide for hundreds of homes and have a significant affordable housing component.
- In a useful pilot, ACPL has concluded a development agreement with a private sector entity to redevelop a dated housing for older person’s village in Henderson. Using the proceeds of the site sale, together with an additional Council budget, the Council will receive 40 new housing for older persons units. In addition, a further 139 homes will be built, targeted at the over 55 market at reasonably affordable price points.
- The 20 hectare Ormiston Town Centre development being undertaken in partnership with Todd Property has reached building consent stage for the supermarket and for stage 1 of a terraced housing development which will comprise around 63 units. Approximately 300 further housing units will be included in later stages.
The AWDA annual report describes: private investment; public infrastructure; events and place-making; and marina.
• The waterfront has become an exciting and vibrant destination for visitors and locals. 73% of Aucklanders visited the waterfront during the year.
• Restaurants and cafes are thriving. New public spaces that represent the best in terms of design, sustainability and historical authenticity have been established and more are being developed. In July 2013, construction was completed on Shed 10, providing the city with a cruise ship terminal, and a new public space, on Queens Wharf. In December 2013, we finished the first stage of the Daldy Street Linear Park, a park of sculptural lawns, trees and rain gardens that collect and clean stormwater run-off.
• Businesses are also establishing themselves around the waterfront. Over 5,000 workers are now based in Wynyard Quarter. ASB moved over 1,300 staff into its Jellicoe Street head office in mid-2013, and they have injected a new energy into North Wharf and its surrounding area.
• After an extensive marketing campaign and Requests for Proposals, we have successfully negotiated development agreements with two local and one international investors/developers.
- Fu Wah International will build a 200 room, international standard 5-star hotel, which they will support through strong promotion of New Zealand as a tourism destination in China. The detailed designs for the hotel are currently being developed, and construction will begin in 2015.
- Willis Bond will develop over 90,000m of residential apartments (over 600 apartments). Detailed designs are being developed for approximately 28,350m of apartments which will be built in the first phase of development.
- Precinct Properties will develop approximately 48,000m of commercial space. Currently Precinct is working on detailed designs for approximately 14,300m of commercial space as the first phase of development and are promoting the development to the market.
• We are also working collaboratively across the Council and with other Council Controlled Organisations on areas where the waterfront intersects with the central city, such as Quay Street and Queens Wharf. This is to facilitate development that is complementary to ensure activity is coordinated, and resources and lessons about best practice shared.


Things to think about:

What I'll call the Queen Elizabeth Square fiasco has intensified the pressure on Auckland Council to develop an effective urban development implementation capability, and this pressure has coincided nicely with the current CCO review which has been seized upon by Council's Executive team. Good to have an excuse and an opportunity to do the right thing.

Councillors and Board members have been advised that the merged Auckland Development Agency (its recommended option) would: Master plan "renewal locations"; assemble land parcels for redevelopment; form partnerships; coordinate public infrastructure; provide financial incentives; facilitate planning consent. I generally agree with this approach. It reflects best practice and the New Lynn experience described links provided in this posting. But the briefing is silent on important matters.

It talks about "waterfront" and "location y" and "location x" and presents an urban renewal case study for Otahuhu to illustrate the function and form of a possible Auckland Development Agency. However it is silent on the most significant urban development and regeneration project that Auckland faces - and that is the development and regeneration of Downtown Auckland including Quay Street, Queen Elizabeth Square, Precinct Properties interest in the Westfield Shopping Centre, CRL enabling works, bus interchanges, etc, which are all illustrated in the Downtown Framework.

The City Centre Integration Group - CCIG (consisting of a few staff, a small budget, accommodated in Zurich House) has had some responsibility for what I will call "Downtown Auckland" but this is a massive development project and CCIG's limited focus on transport (key staff are on secondment from Auckland Transport) does not provide it with the skillset for the task of implementation. This project - set of projects - need to be included in the function of Auckland Development Agency. They will give it the scale and weight it needs to counter the transport infrastructure priorities of Auckland Transport, which should not be the drivers anymore for Auckland's urban redevelopment and regeneration.

Close reading (above) of ACPL's annual report shows it has an annual performance target: "to recommend $100m worth of disposals to the Council’s Finance and Performance Committee".  This target is designed to press ACPL to dispose of council-owned land. It is a iarget that will have been negotiated between Auckland Council and ACPL. Weeks before Auckland Council voted in principle to sell QE Square, ACPL wrote to local iwi about the possibility (because Council was obliged to first of all offer any land for sale to iwi first). It wrote in these terms:
"The Downtown Shopping Centre (DSC) is owned by Precinct Properties Limited (PPL) and it has suggested that it work jointly with Auckland Transport (AT) and Auckland Council to enable the tunnels to be constructed in conjunction with its desired redevelopment of the shopping centre.

The Council and AT have approved this in principle and PPL have been progressing design master planning to indicate the form of redevelopment. The work that PPL have carried out has clearly shown that a superior redevelopment can be achieved if QE11 Square is included within the development footprint.

QEII Square was originally reclaimed land and held by Auckland Harbour Board. It was subsequently transferred to Auckland City Council. QE 11 Square is currently a legal road.

Reports will be presented to the Waitemata Local Board and Auckland Development Committee in May to seek and confirm the intent to enable QEII Square to be included in the development planning of the DSC. If this is supported Auckland Transport will then manage a road stopping process. Furthermore, the land will be subject to commercial negotiations with PPL to ensure the Council receives appropriate consideration for the land.

In the adopted City Centre Master Plan it is recognised that the square needs enhancement. It is also considered essential that if this public space is developed that the amenity be replaced in the local vicinity. Council officers are working further on this. One possibility is to enhance or increase public space between Quay Street and the sea.

We invite you to review the details above and provide feedback to us on any site specific cultural significance issues iwi may have in relation to this proposal.

Please provide any feedback to xxxx, ACPL by 7 May 2014. Your input will be included in a report Auckland Development Committee on 15 May 2014 as key stakeholder feedback to support any decisions made on this proposal...."
This letter does not provide any comfort regarding ACPL's sensibilities around the public value of QE Square and the need for public spaces and places in Downtown Auckland. The emphasis in the letter is the sale of land to generate revenue for Auckland Council in accordance with ACPL performance targets. The emphasis is not the development of a piece of waterfront city for its citizens. And despite ACPL's place-making goal there is little evidence of any commitment to achieving that goal in the way it has approached the sale and use of Queen Elizabeth Square.

Which is why ACPL's skills need to be part of the Auckland Development Agency, but they cannot be the determining driver, especially when it comes to city centres and town centres where public amenity and the design of public places is so important.

Council's Auckland Development Agency proposals are silent on governance and public engagement. This was key to the success of urban regeneration projects in Perth where local councils (equivalent in size and function to Auckland's Local Boards) were institutionally involved in local redevelopment projects. Ensuring that local boards are integrated into the implementation of significant urban regeneration projects in their patch is essential to building local buy-in, and for providing a ready-made elected representative conduit to local stakeholders who - while they may not be land-owners - are the community who will live in and around the redeveloped town centre or neighbourhood development. This is just the sort of role that Local Boards were for. Development of "location x" or "location y" requires a some sort of institutional presence at "x" or "y" where locals can see what is planned, where consultation can be centred, which provides a shop-window for stakeholder and public engagement, and helps achieve community buy-in.

People need homes not houses

Another shock, horror, scandal, probe set of headlines and sound bites about Auckland house prices. Surely we need to get a bit of science and relevant statistics into the discussion and policy debate.

For example the price of housing in Auckland - as opposed to the price of houses - is falling, not rising. Recent reports indicate a shortfall in demand for rental properties. A report based on trademe data indicates that in central Auckland, the supply of rentals was up 5 per cent on the previous year while demand was down 2 per cent, and average asking rents declined by 1 percent. I accept there is a shortage of rental properties given rising levels of inequality and poverty which means many people cannot easily afford these "low" market rents.And that's where discussion that distinguishes social housing from market housing is important. That's the sort of nuanced discussion that should happen in a large western city.

Yet, as economist Keith Rankin notes, rapidly increasing Auckland house prices means that something must be in short supply; that is, in excess demand. But in his view that something is not houses, but financial assets. Houses - and especially the land that they sit on - fit the characteristics of financial assets to investors - whether they be local investors or overseas investors. And to buyers, houses in Auckland increasingly represent financial assets and decreasingly represent accommodation. It doesn’t matter how many houses are built – provided it’s not a total crazy oversupply – there will always be buyers for them because at present Auckland houses are a great investment, but not because someone actually needs to live in them.
Late Item:  17 Oct 2014 Media release from ANZ headlines: "Regulations threaten property growth, say investors. Residential property investors are still confident, growing and looking to buy more properties despite growing interest rates - but many would consider selling up in the event of proposed new regulations...". This same media release contains data from a survey of property investors:
  • "....Investors expect property values to grow by 4.8%, and rents by 2.8%, over the next year. Longer term rent expectations are higher, at an average of 4% per annum over the next five years.
  • Expectations for value and rent rises are highest in Auckland and Christchurch. Auckland investors expect property values to grow 50% faster than the national average.
  • The proportion of investors with seven or more investment properties has risen from 14% to 26% since 2010. Most of this growth is among investors who have most of their properties in Auckland or Canterbury...."
The data confirms the economics - returns come from capital value increases, not from rents. You don't have to be a rocket scientist to understand the implications of this information which confirms the fact that housing has become a lucrative business, in New Zealand. "Property growth" mainly benefits housing investors. Not those wanting a home. It is clearlky time for the sort of regulation that would encourage these investors to "sell up" and find something more useful to do with their money.

That economic reality is what suggests there is a need for some sort of policy instrument - like a capital gains tax - that would disincentivise this financial asset aproach to the house market. But that's not what this posting is mainly about though this disconnect needs to be recognised, understood and addressed by public policy in New Zealand, as it has been in developed countries such as Germany and Japan. Rankin reports that in those countries, if you want somewhere to live you rent a house, or an apartment. That is modernity. Further, housing is priced essentially according to its rental yield. To their owners, rental houses and apartments are financial assets; but they are basic bread and butter assets, priced by yields. They are not speculative assets, priced on the expectation of leveraged capital gains.

At least there is a move to look at a variety of statistics when reporting housing affordability in New Zealand. The most misleading statistic is reliance on the Demographia survey for housing affordability which uses a very simplistic measure - the median house price to median gross household income ratio. This is a damned statistic and its unqualified use to compare housing affordability between countries is almost a lie.

Using gross household income is an inappropriate way to determine household spending power, because the spending power of a household is based on the amount of gross income remaining after costs are deducted for essentials such as taxes, food, transport, clothing etc. Differences in tax rates and cost of living pressures across various countries make a comparison of spending power based on gross income meaningless.

But the worst part of Demographia’s data is that it fails to consider either dwelling size or housing type. Houses in New Zealand are, on average, the largest in the world, so when comparing median houses it is important to note that a median dwelling in New Zealand is much larger than a median dwelling in the other countries. So on average a median dwelling in New Zealand, being bigger, will cost more to build and occupy more land, than its median equivalent in many other comparable OECD countries. Demographia data overstates median prices for New Zealand because it is largely based upon “house” prices, and does not take proper account of units and townhouses and other sorts of home accommodation units that are traded and which should count as homes – even if they are not average sized “houses”.

A house may be a home, but increasingly in Auckland and large Australian cities, and mostly in big OECD cities, a home is not a house. That is the cause of another major failing with the Demographia survey is its measure of median house price. Its Australian figures only include freestanding houses. They don't include units or townhouses, meaning that Demographia are overstating median house prices in Australia compared to the other countries assessed in their survey (countries where units and townhouses are included when calculating the median house price).

The study that I have looked at closely and which appears far more useful when looking at what is happening in Auckland is the NUMBEO study which you can find on the web. This is now one the largest and most data rich sources of cost of living and housing price data in the world. The housing survey data quoted by NUMBEO is described on its website. They use Price to Income Ratio as the basic measure for apartment purchase affordability. It is the ratio of median apartment prices to median familial disposable income, expressed as years of income.

NUMBEO’s affordable housing formula assumes and uses:
• net disposable family income, as defined as 1.5 * the average net salary
• that the average apartment has 90 square meters
• its price per square meter is the average price per square meter in city center and outside of city center


Other affordability statistics that are reported, by country, include: Mortgage as Percentage of Income which is a the ratio of the actual monthly cost of the mortgage to take-home family income (average monthly salary used to estimate family income). It assumes 100% mortgage is taken on 20 years for the house (or apartment) of 90 square meters where the price per square meter is the average of price in city center and outside of city center, and this gives its Loan Affordability Index which is an inverse of mortgage as percentage of income.

In some ways this survey is like Demographia's - ie that it calculates a ratio of median prices to median family incomes. However when analysing affordable homes (as opposed to just houses), then it is more useful to survey the types of homes that are generally purchased by young families and couples starting out on the housing ladder. And for most cities in the world, the starting point is NOT a freehold 200 square metre floor area, three bedroom house on 400 square metres of land (and costing $500,000 according to Bill English). The starting point is a relatively inexpensive apartment. The NUMBEO survey reports affordability of 90 square metre apartments.

In 2013, according to this survey, New Zealand ranked 21 (with a Price to Income Ratio of 6.40), while the USA was 1 (Price to Income Ratio of 2.16), Germany, Canada and Ireland ranked 8, 9 and 10 respectively. Australia ranked 32. And so on.

For the affordability index which considers the cost of a loan (assuming it is taken on for a 20 year period), which uses interest data from each country and such like, New Zealand ranks 24th in affordability (with 1 - the USA - being most affordable), and places like Belarus and Ghana being least affordable and ranking 100 or more. It should be noted that in this survey countries like Sweden, Australia, Italy, Egypt rank as less affordable than New Zealand.

In Auckland we need to be measuring and comparing data that helps us focus on change and on policies that will make a difference, rather than using discredited surveys that only exist to reinforce a particular party line that is all about removing development costs and improving conditions for developers so they can be effectively subsidised to build relatively expensive and large homes.

We know that the average NZ home has been increasing in floor area for the past 20 years or more, and that the number of occupants/home has been decreasing on average. This is inconsistent with the policy objective of increasing the supply of affordable homes, because internationally, affordable homes in urban environments are apartments.

And to finish another piece of trademe research, I looked today for an Apartment, Townhouse, or Unit, for $350,000 or less, in the Auckland Region and found there were 641 listings. I didn't look through them all but skimmed the first 70 or so, and found some between $100,000 and $150,000, plenty between $200,000 and $300,000. Time reporting and public policy learned not all homes in cities are on 1/4 acre sections.

Herbicides mainly kill plants

It was a disturbing headline: Weed killer closes dams, and it was right and proper that the article should concentrate on risks to human health. But this practice is not novel from Watercare, only the herbicides (pesticides) have changed.

Many years ago (1994-1997) I strongly resisted proposals to pipe Waikato River water up to Auckland for town supply. Treatment proposals proposed by Watercare then included sand-filter treatment and chlorination. My concern was what was in the raw water from dairy and agricultural runoff and from the ten plus wastewater discharges that were upstream of the proposed Watercare intake. My particular concern was giardia and cryptosporidium cysts and a benefactor helped me engage the services of a microbiologist to prepare expert evidence.

But I wasn't the only person concerned and ready to go to court to resist these proposals. A lone tomato grower put in submissions. He grew tomatoes hydroponically on his farm at Papakura, under plastic cover, and he used Watercare town supply for irrigation. Until he noticed that his tomatoes were failing, leaves curling up and other problems, and he engaged the services of a forensic scientist. He came to the conclusion that the tomatoes were being affected by organochlorine based chemicals. To cut a very long story - one that went all the way to the House of Lords - short, suffice to say that it was discovered that Watercare had been applying herbicide to vegetation (gorse) in the Hayes Creek dam catchment, that some of this had washed into the lake, and it got into the town supply, which the tomato grower was using to water his plants.

It transpired that cherry tomatoes are very sensitive to organochlorine contaminants, but that humans were much less sensitive, though the question of residuals and dioxins and suchlike remained unanswered. The point being that some plants can be VERY sensitive to certain pesticides/herbicides. And this is the case with the herbicide metsulfuron-methyl which is now being used by Watercare (what plants is it seeking to control in the forest and native bush Hunua catchments anyway? What effect does metsulfuron-methyl have on native vegetation, and what risk is there of spray drift damaging mature native trees - as has happened in USA?)

It's not good enough to say that the risk to human health is minimal. There are other risks that need to be managed. And the levels of contamination that cause damage to plants can be much lower than the levels that affect human health.

Just finishing the Waikato Pipeline story, after the submissions made by me and the tomato grower, Watercare agreed to add two further stages of treatment to water drawn from the Waikato. It added an activated carbon bed stage to control any organochlorine contaminants that might arise from Waikato farm herbicide and pesticide runoff, and it added a nano-filtration stage to ensure that giardia and cryptosporidium cysts could not enter our drinking water supply.

But the best thing to do, when you have raw water catchments in bush catchments like the Hunuas and the Waitakeres, is to put no contaminants into them in the first place.

Downtown Bus Station Priority

There's a lot of chat, some secrecy, and little public discussion about what's going to happen with buses downtown once they are shunted out of Queen Elizabeth Square and Lower Queen Street.

The Downtown Framework - despite coming out of Auckland Transport run CCIG - provided cursory back-of-envelope ideas to handle displaced buses by shoe-horning them into little Britomart lanes, and terminating Northern Busway services - and others - in Lower Albert Street. This was appropriately panned by Rudman. There has been some blogger discussion about what to do with buses, and a little bit of history of mistreatment of buses, including my posting.

Here's a few pointers:

In July, Anne Gibson ran an interesting piece about Precinct Properties taking "a team to San Francisco last month to study a new 62-level waterfront skyscraper rising above an underground railway there...." Maybe Precinct Properties are way ahead of Auckland on this. Because it's not about trains - for Precinct Downtown - it's about buses. Wouldn't it be sensible for Auckland Transport and Precinct Properties to work together - not just in making room for the CRL enabling works and tunnel - but in including a bus station under its 41 storeytower, with pedestrian connections to the retail offerings there, and rapid transit connections to many Auckland destinations for those living in the apartments?

If current government sticks to its guns then Auckland Council will not be able to build the CRL until 2021, but it can start it. It can build, under its own steam, the CRL "enabling works" and tunnel from Britomart, under QE Square, and more or less to intersection of Lower Albert Street with Custom Street West. One of the interesting conversations I had about this bit of work is that this new section of rail has significant utility in its own right - without the rest of the CRL. Why? Because of the ability to stack trains up the tunnel, allowing more to enter. or leave, Britomart Station/hour, and avoid/bypass the constraint imposed by the fact only 3 lines enter Britomart. For example, being able to stack trains in am peak would mean trains could enter the station at around twice the frequency as at present - for an hour maybe - because emptied trains would pull forward into the stack, leaving room for the next full train immediately, instead of waiting for the empty train to reverse out. Think of that. A big capacity gain. And it would work just as well when there was a big event (let's say the warriors at Mount Smart), where empty trains could stack taking office workers to Penrose, train after train, not having to wait for empty ones themselves delayed waiting full trains to depart.

I wonder whether anyone has done the cost benefit comparison of incentivising Precinct to incorporate a bus station into its development (supported by some undergrounding of buses along Custom Street) and improving downtown pedestrian amenity once dominated by buses, versus only building the CRL?

Friday, October 3, 2014

Fine Day on Wellington Waterfront


Mayor Leaves Mess to Councillors

Maybe it was the General Election result. No-one seems to know. Least of all Auckland Councillors. Around that time, without warning, Mayor Len Brown packed his bags and took himself and family off on a one month family-time holiday. He's gone for another couple of weeks I understand.

He's left Council and Councillors various messy jobs to do. Like workshopping through a Long Term Plan that requires difficult decisions - including achieving significant cutbacks in Auckland Transport's budget, and other contentious reductions. And like managing the Downtown redevelopment project and moving the Central Rail Link project along. And getting to the end of the CCO Review process - which I post about here. And engaging with a new incoming Government.

The biggest mess of the Len Brown era will unquestionably be the debt explosion from around $3 billion when he and the incoming councillors took office in October 2010, to almost double that now, and with budget plans (that Councillors are struggling to change right now) that would blow debt out to $13.7 by 2025. You can see the numbers that councillors are dealing with summarised in this NZ Herald report.

Apart from that stuff, every day there are issues for Auckland Council to deal with. That's what it's like in local government. You expect that. Some are big (like those above - which need careful management, and eventually get dealt with by a committee or council decision) and some are small. Big decisions don't just get made on the committee-decision day though. There is a lot of officer and political work that needs to be done before they finally come up for decision.

So how's all that work get done between committee meetings?

My understanding is this:
  • Before Len took his holiday, the political management structure that involved mayor and councillors consisted of weekly meetings chaired by the Mayor, attended by the Councillors who Chair Committees of all Councillors ("Committees of the Whole" chairs are: Penny Hulse, Penny Webster and George Wood), by the Chief Executive Officer (Stephen Town), and the two Councillors who also sit on the Board of Auckland Transport (Mike Lee and Christine Fletcher). The idea was to keep the meetings small and functional. Sometimes one or two officers would attend. It seems this approach got off to a good start, but after a while the Mayor became bored or distracted - who knows, and would leave meetings or just not turn up, and when he was not there Penny Hulse as Deputy Mayor would take the chair.
  • After Len took his holiday these meetings shifted to the 15th Floor of Civic Building, where Deputy Mayor Hulse has her office. I understand these are attended by the same Councillor Senior Chairs (not sure about the AT councillors), and instead of the CEO, they are attended by Council's Chief Planning Officer, Chief Financial Officer, and Chief Operating Officer. They are usually attended by a senior officer from the Mayor's Office. Acting Mayor Penny Hulse chairs them.
Little to no contact is occurring with the Mayor, who is presumably quite out of touch with what is happening and evolving at a crucial time for Auckland, and for Auckland Council.

I well recall - from my time as councillor - the critical period immediately following a General Election. Councillors and General Managers would meet with the Chief Executive to assess the lay of the land in Wellington, weigh opportunities for intervention, prepare briefings for the incoming Cabinet, design a strategy for engagement, and send a weighty delegation down to meet with and lobby the PM and Senior Ministers before they became absorbed in an onerous Parliamentary timetable. And that's before formation of the Supercity amalgamation for a third of the country. As far as I am aware, nothing like this has happened, yet, from Auckland Council, and the opportunity is fast disappearing, if not gone already.

Is this important? Hell yes. For a start there are proposed changes to the Resource Management Act that will make redevelopment and development easier for the building industry, and provide fewer protections for existing communities. There are proposals to cut back development contributions that are needed to fund infrastructure construction. And that's the tip of the iceberg. The biggest need for a deal to be negotiated and done with the incoming government is over the funding of the Central Rail Link. National and Labout indicated it would fund 50%, Greens promised 60%, NZ First 75%. In other countries this sort of expensive and economically transformative infrastructure is 100% funded by state or central government. As important as state highways.

But none of this negotiation has occurred, and as far as I'm aware from my chats with councillors no planning for it has been discussed. Auckland Council stays meekly at home and waits. No initiative to talk turkey with central government has been taken. Who's to blame for that?

It is unfair to blame the temporary political management structure that was quickly put in place when Len suddenly took himself off. Normally (if there's such a thing), the Chief Executive would develop a plan with the Mayor and senior staff, and a process would quickly unfold. But nothing seems to be normal about Auckland Council. It's still in a turmoil of transition, facing the threat of significant cuts as it rejigs its Long Term Plan, managing 500,000 submission points on its draft Unitary Plan, still talking about the Southern Initiative (no-one seems to know what it means), and dealing with various elephants like the CRL and Ports of Auckland.

Downtown, QE Square and Quay Street almost pale into insignificance.

And the Mayor is not here. Would it be better if he was? At least there'd be an elected person in the Mayor's office - some of the time. And some of the difficult political work that Penny Hulse has been shouldering with a smile could be shared. That would be something. But the problem Auckland has when the Mayor is here, is that what he's good at is being a cheerleader for the last good idea he's heard, and what he's bad at is figuring out how all his ideas fit together and get paid for. He's so good at selling ideas that most people buy them, and only later find out what they cost, and then it's a mess, and then he's away for the day.

What I sense from my chats with many councillors is that there is growing awareness that they need to get together and work as a team - without relying upon an elected leader or being able to depend upon the mayor's office. Penny Hulse and her group of chairs need support from other councillors, so that Council can respresent the views of the community, and not be pushed into decisions by anxious officers frustrated at the governance impasse. It is understandeable that officers may wish to impose their solutions to Auckland's problems, but shortcuts can take longer. Quick decisions are usually poor decisions, and any council decision is always difficult to reverse.

Work as a team. Show collective leadership, and govern Auckland.

Review of CCO Review

Auckland council has been reviewing its Council Controlled Organisations for a long time now, but next week, with a hiss and a roar, Auckland Councillors (Tuesday 7th) and Local Boards (Wednesday 8th) will get the first taste in confidential workshops of what officers have come up with and various options and restructuring. The council's website describes the review like this:
The review is an opportunity to investigate if there is a need to change any council or CCOs’ activities, functions, structures or the ways in which they operate. Its aim is to ensure Aucklanders are getting efficient, integrated services and value for money. The review will also provide confidence that the council group is fully accountable to ratepayers and elected representatives. Many different opportunities for council and its CCOs to work better together will be investigated as part of the review. At this stage it is too early to tell whether this might include any structural changes. Please note that the structure of Auckland Transport is governed by its own legislation and is beyond the scope of this review. Findings from the review will determine whether any major changes to existing council and CCO structures or service delivery models are recommended. Any such changes would be clearly identified and publicly consulted on through the 2015-2025 long-term planning process.
There has been some media comment about the process. For example an NZ Herald March 2014 editorial concludes: "The council-controlled organisations have played a major role in bedding in the Super City and moving Auckland forward over the past three years. Greater council direction of their activities could threaten their effectiveness. In time, some aspects of their operation may need to be refined. But in almost all aspects, now is too soon....".

Apparently several Auckland Councillors have echoed this sentiment in confidential workshop sessions that have been held over the past couple of years. This view is along the lines, "we've been elected to govern Auckland Council and Organisations that were established by Government legislation after a Royal Commission of Enquiry and expert advice - we've not been elected, and nor do we have the expertise, to tamper with it. We should leave it alone....."

I've been talking with Auckland Councillors about the review for a couple of years, and this posting contains my feedback - for what it's worth - to councillors as they go into these workshops next week.

My biggest beef, (as an opinionated councillor) with the CCO's when they were set up in 2010 was that Watercare was not set up as a Three Water entity with responsibility for stormwater alongside water and wastewater services. That sort of integrated approach was the norm for Waiatakere City Council and North Shore City Council, and was aimed at delivering a more water sensitive urban environment. Many shared my view about this, but it was not to be in 2010, and it seems, despite suggestions from some councillors, it's not to be in 2014 either.

This NZ Herald report, almost 2 years ago, about the CCO Review, had this to say: "A source said the council was actively exploring merging four CCOs into two and scrapping Auckland Council Investments altogether. Waterfront Auckland could be rolled into Auckland Council Property. The same goes for Auckland Tourism, Events and Economic Development (Ateed) and Regional Facilities Auckland...."

From what I understand it appears that the upshot of two years work is that Auckland Council Property Ltd should be merged with Auckland Waterfront Development Agency to form an entity that could be known as Auckland's Urban Development and Regeneration CCO.

This sounds like a great idea. It's got potential. Many have been arguing that Auckland Council's Unitary Plan and Special Housing Area policies lack an implementation arm. I wrote about this last year in this posting:
"...the method is an Urban Development Structure Plan for each Urban Development Area. The mechanism is an Urban Development Agency established to make, and manage the implementation of, each Urban Development Structure Plan. The rationale, or exemplars, for this approach are the Public-Private-Partnership urban regeneration projects that have been successfully implemented in Australian cities...."
 This refers in particular to Urban Redevelopment Agencies used for urban regeneration in Perth in particular, because a whole group of Councillors - including Penny Hulse and Linda Cooper - went to Perth on a week long study tour to see how they did it there when we visited three different parts of the city that had undergone, or were undergoing, some form of urban regeneration. This visit is described quite visually in this posting and concludes:
"...what Perth learned from this sequence of three brownfield regeneration projects. None of these projects are the same of course, but the things they had in common were these: public money kick-start; tailor made regeneration agency for each community/project; 3-5 year master planning timeframe (remember - much of this is time invested in getting community buy-in and amalgamating land where needed - let alone getting infrastructure plans in place and funded); strict requirements around the provision of affordable housing (which is quite distinct from social housing)...."
 One of Auckland's first urban regeneration projects is New Lynn town centre. It has been successful in some ways, and there are some aspects that have been criticised. Every bit of urban regeneration is a learning experience. Urban regeneration is a relatively recent activity in Auckland, partly because we are a relatively young city, and also because the pressures for urban change have been slow. European and US cities have been engaged in urban regeneration projects for over fifty years now, and a lot of experience has been gained about the process that we can usefully learn from here in Auckland. One of the key learnings is that urban regeneration institutions require a different sort of local government culture than is usually found in a Council. A few extracts from UK manuals:
The new skills that managers of regeneration need. “…not only are they taking on roles as community champions or leading change processes, but the increased need to work in partnership with communities or partners beyond their own organisational boundaries, and stimulate cultural changes, have implications on how they perceive their roles…”

The significance of leadership in engaging stakeholders, and the: “….messy and ambiguous settings lead managers to attempt to make sense and develop some order and clarity…”.

Best practice in the modern public sector environment now demands:
1) Citizen involvement
2) Greater democratization
3) The need to build capacities and improve quality and performance
4) A requirement for skills mixes located in different people at different times
5) An understanding that no one organisation or person possesses all the skills and competencies to undertake activities
6) Effective performance by regeneration managers, who synthesise past experiences, skills, knowledge, behaviours and competencies within organisational, but increasingly in cross-boundary, settings.

The most significant take-away for Auckland is that regeneration demands a different way of thinking and behaving from public officials, and that they also need to respond and change in a dynamic and changing environment. Emphasis is placed on the need for organisational and managerial behaviours that “learn”, and that “public learning” requires a systematic approach to:
1) Develop a shared understanding of current realities and vision for the future;
2) Develop questions on gaps between current and desired state, in order to agree publicly with stakeholders on the way ahead;
3) Develop a climate or culture in the parts of their own organisations to gain commitment and combat coercion;
4) Challenge rhetoric of competition with collaboration and partnership;
5) Place a high value on learning in human resource processes and performance and appraisal;
6) Develop and value a learning ethos, discourage action fixated behaviours;
7) Reinforce learning, discourage competition and short-term target setting, and incorporate into pay and reward systems.
So what does all this mean for the CCO review, and the recommendation that the Auckland Council Property (ACPL) and Waterfront Development (AWDA) CCOs be merged. Cutting to the chase here. There is a clear need for some form of Urban Regeneration Implementation agency in Auckland. It is also clear that the Waterfront Development Agency, which has grown and been developed over the past 7 or 8 years from its Auckland Regional Council Sea + City days, has done a great job so far at Wynyard Quarter. It is well known that AWDA employs specialist and talented people. It is probably less well known that AWDA as an institution exhibits many of the characteristics of urban regeneration excellence mentioned above.Which is partly why AWDA rates so highly in Auckland Council's Staff Engagement Survey which measures job satisfaction, feeling valued at work, able to apply skills and such like. This sort of working environment is highly attractive to skilled staff.

I think the rest of Auckland could benefit from the knowledge and experience that has developed within AWDA, but only if the culture and institutional style that allowed and encouraged AWDA to develop as it has, continues in any merged structure...
This is my suggestion. There will be all sorts of options. The thinking behind this, apart from best practice advice about the need for appropriate institutional culture and approach, include:
  • the need to separate Auckland Council planning and budgetting responsibilities from CCO implementation responsibilities and activities. Thus it may be appropriate for implementation oriented activities presently located in Auckland Council's city centre planning department to be seconded or included within AUDRC (Auckland Development and Regeneration CCO).
  • the need to establish fit-for-purpose-entities to manage particularities of urban brownfield projects. These should have a presence on location. Manukau towncentre for example - part of the Southern Initiative. New Lynn was an example. Like Perth examples. One size does not fit all. Entities need to be tailor made, supported by CCO specialist staff.
  • city centre waterfront regeneration requires different skillset. Particular attention to and knowledge of: reclaimed land; stakeholder relationships with marine industry and port facilities; ferry and fishing traffic; management of city centre public places; leasehold land tenure; large scale developments like ASB and Hotel.
  • there are opportunities for cooperation between CCIG and AWDA, so that AWDA implementation skills are deployed elsewhere along Auckland's waterfront.
Councillors and Local Board Members, best of luck for next week and future decision-making about CCO's. My key advice: "don't throw the baby out with the bathwater."

(Expression of Interest: Joel was an ARC Councillor when its entity Auckland Regional Holdings established Sea + City Ltd as the development agency for Wynyard Quarter, and while SEA + City proceeded with associated planning between 2005 and 2010.  Joel was engaged until recently by Auckland Waterfront Development Agency to provide planning services as part of its challenge team.)