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.