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 2013-2016	ACPL'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.

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?

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.)