A subdivision plan gets caught in a wave of council rule rewrites driving some section buyers to give up and look elsewhere
As economic growth in Cromwell steams ahead, a developer in sleepier Alexandra is accusing the local council of stifling that town’s progress.
The Central Otago District Council denies it has treated planning requests unevenly between the neighbouring towns, an accusation stemming from its unprecedented decision not to accept an Alexandra-based plan change application for processing.
It is believed to be the first time the council has said no to such an application.
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In the process dozens of would-be home builders have become caught in a slow-moving planning tangle.
There have long been rumblings that Alexandra is being left behind in the economic growth stakes.
Dissatisfaction was aimed at the council in 2011 via a 1300-signature petition for more support for economic growth and more recently through a request for the introduction of the independent CouncilMARK assessment programme.
The council has defended its actions on both fronts with elected members at the time saying they were unsure exactly what more the petitioners wanted the local body to do.
The CouncilMARK request was put aside for a later date because of workload and staffing pressures.
It was a second attempt by Alexandra-based developer Molyneux Lifestyle Village (MLVL) to get consent for a 16ha subdivision that resulted in the disallowed plan-change application.
The edge-of-town block’s 20 sections were initially offered for sale in 2017 while a resource consent was sought.
Buyers, some who have been waiting more than five years to build, were unwittingly caught up in a council review of zonings and housing densities for the whole of Central Otago.
The work, which will bring a well-outdated district plan up to speed, is also partly aimed at addressing a lack of land suitable for housing.
MLVL claims the complex process is delaying the release of such land.
Geoff Feron was a keen buyer of one of the sections at what had been a defunct vineyard.
Both his adult daughters also bought at the tree-lined block on Dunstan Rd.
A group of their friends – young families wanting decent-sized sections and semi-rural living close to town – bought sections too, then waited for titles to come through.
“Everyone was wanting to build but there were no sections at the time,” says Krichelle Cunliffe, one of Feron’s daughter.
Feron, who has lived in Alexandra for 31 years, says he thought gaining consents to build would be a “no-brainer”.
“It was 100 percent ideal for the girls. It’s walking distance to town and the golf club and cycle track are right there.
“The lifestyle blocks way out of town cost people a fortune in petrol. A lot of them end up just bailing.”
Snapped up
When the first sections went on sale online, MLVL director Russell Ibbotson says the website received thousands of hits and all were soon bought.
“People say it’s a risk not having titles but it’s pretty much accepted in the real world.
“You’ve got to know as a developer that you’ve got sales or you’d never get the funding to do it,” Ibbotson says.
Forty-three mostly supportive public submissions were received on the subdivision plan but there were some objections from neighbours.
The Alexandra Clyde and Districts Business Group was in support and noted there were “virtually no sections left for sale in the area”.
MLVL made sure buyers understood the consenting situation, which was just as well because the application was declined in January 2018.
Sunset clauses allowed for the refunding of deposits but some buyers held on, aware that Ibbotson was not ready to let the plan go.
The block is zoned as a rural amenity area, which under present rules does not allow the density Ibbotson was proposing.
Planners declined the development as still too intensive for the district plan’s definitions for the desired rural residential zoning.
“A council planner also said there was no need for more sections,” Ibbotson says, and that a planned council subdivision would meet demand.
“It said the land should be kept for horticulture.”
That was more than four years ago when the council subdivision project was thought to be imminent.
However, the Dunstan Park sections, a joint venture with Queenstown developer Alistair Hey’s company Imagine Capital, did not come on to the market until at least two years later and some are yet to be released.
The council’s subdivision site is zoned for housing and is a little closer to town, MLVL says, being less than 1km from its own site.
All about the rules
According to council principal planner Ann Rodgers, section supply and demand is not relevant for planners who base decisions on zoning and density rules.
The council’s full planning review, aimed at providing for growth in a more managed fashion, acknowledges a shortage of sections around Alexandra and Clyde.
It formed part of the impetus for creating a “Vincent spatial plan” for the area.
Lengthy public consultation has taken place to help create the Vincent and Cromwell plans and the community’s aspirations, plus new policies and rules around what can be built where and how, is now being translated into legal changes to update the district plan.
Hearings are due to start next month on the council’s Plan Change 19 process.
Amid the growth pressures in some parts of the district, a provision to raise the minimum lot size from 250sqm to 500sqm is one of many proposals attracting interest.
Developers will not be subject to the new rules until they are finalised through the hearings. According to the legislation, Plan Change 19 must be done and dusted by July 2024 but appeals are a possibility.
Also in the mix is the government’s rewrite of the Resource Management Act, which will impose an overriding set of new rules around development and spatial planning - that is what can be built where and how.
Rodgers says Three Waters reforms are also looming and the comprehensive manner of the council’s review is “a way of getting ahead of the reforms”.
The council hopes its reviews can be incorporated into the government’s.
Try and try again
When the draft Vincent Spatial Plan was released in early 2021 Ibbotson was pleased to see MLVL’s Dunstan Rd plot fell into an area marked for future housing. He believed a new “large-lot” density land designation would work for his proposal.
Eager to get on with it, MLVL regrouped and had another go at getting the subdivision happening.
With original buyers impatient to build and costs escalating, the company revamped its proposal adding the installation of services along Dunstan Rd including water and sewerage connections to the town systems.
Section numbers increased to 60 and new sales were negotiated despite titles now being dependent on another more complicated legal request to council.
In April that year Ibbotson lodged a private-plan change application to rezone the plot and allow the subdivision to proceed.
Rodgers initially penned a recommendation to accept the application for processing then four months later reversed that after a legal opinion.
The grounds to reject it presented to councillors were the possibility of it “not being sound resource management practice”.
Rodgers told Ibbotson in a letter that if the council accepted it, it would be faced with considering a request on the operative district plan alongside the comprehensive new set of objectives and policies.
This would be “likely to create some confusion for potential submitters”, she wrote.
Ibbotson reluctantly agreed to the council’s directive that the matter be handled by council through the Plan Change 19 process, which he was told would follow a similar timeline.
Two years later with building costs rocketing, interest rates climbing and section buyers getting grumpy, Ibbotson saw red when council accepted a private plan change application for a large housing and commercial development near Cromwell.
The proposal, also a seemingly popular idea, lies outside the council’s new spatial-plan designated housing areas.
Lodged by Fulton Hogan for its Parkburn gravel quarry, Mayor Tim Cadogan told Ibbotson in response to an email the application was different in that it was lodged after Plan Change 19 was publicly notified and looked to adopt proposed new low- and medium-density provisions.
Rodgers also says the two plan change applications are dissimilar for those reasons and because MLVL wants something different to what is likely to be set down for housing at the Dunstan Rd block.
She told Newsroom “cookie-cutter” subdivisions with cul-de-sacs were no longer the go, with people wanting modern connectivity.
Ibbotson believes there’s no difference. MLVL’s and Fulton Hogan’s plan changes would both have been running alongside the development process of the new sets of objectives, policies and rules.
Changing landscape
The council did not seek a legal opinion as to whether it should accept Fulton Hogan’s application as it had done with MLVL in 2021, Rodgers confirms.
Reports show the Fulton Hogan application was decided in a public CODC meeting whereas MLVL’s was considered in a closed session.
Regarding MLVL’s rejection, Rodgers says it is the first she is aware of but it is also the first full review of the district plan in about 25 years, which presents a changing planning landscape.
Despite Fulton Hogan’s application being made against the existing district plan, she says people making submissions should use the housing definitions as proposed through Plan Change 19.
The new definitions, although they do not legally exist yet, are the relevant ones as the application is expected to be heard after the new definitions have been updated into the district plan.
Meanwhile, nothing is set or guaranteed, she says, and any of the rules may change or “be tweaked” until after the hearings and possible appeal processes conclude.
Only at that point do they become “beyond challenge”.
Ibbotson says he has no beef with Fulton Hogan - “good on it, I say” - but that its plan is based on proposed housing densities that are not yet fully defined.
He has become something of a thorn in the side of the council, keeping up a steady stream of complaints on the handling of his Dunstan Rd proposal.
He says there’s now no knowing when the subdivision might proceed or what to tell buyers, who have been understanding.
A recent attempt to work with council to start planning for services to the block in anticipation of relaunching when Plan Change 19 is completed was rejected by the authority’s Three Waters department as impractical.
Feron, meanwhile, says he’s had enough and has pulled the pin on his section. He’s bought near Wānaka and will close his car sales yard this winter.
His daughters couldn’t wait either and have made other plans.
Made with the support of the Public Interest Journalist Fund
