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Billionaire's lodge plan goes straight to court

A controversial proposal to build a massive private lodge near the shore of a scenic South Island lake will bypass the local council and go straight to the Environment Court. David Williams reports.

The Hong Kong billionaire who wants to build a massive lodge on the eastern side of Lake Pukaki is banking on a single shot at getting his case right.

The Mackenzie District Council confirms a consent application from Blue Lake Investment (NZ) Ltd – which wants to build the 805 square metre lodge, 40 metres from Pukaki’s shore, for company director Ka Kit “Peter” Lee – has been referred directly to the Environment Court.

Such a move is not unheard of. A $100-million-plus upgrade for Queenstown’s gondola, owned by tourism giant Skyline Enterprises, has also been referred to the court.

Anderson Lloyd partner Maree Baker-Galloway, a former president of the Resource Management Law Association, tells Newsroom the move might save time if a council decision is likely to be appealed anyway.

“It’s one shot to get the evidence right, instead of having two shots to get the evidence right. That’s a pro and con for whatever side of the fence you’re sitting on – it’s a risk for an applicant as well.”

While it might be a time-saver, Baker-Galloway, of Queenstown, says a direct referral can be costly because the applicant has to pay the court’s costs. It also narrows the grounds for appeal to the High Court to matters of law.

Initial blow for lodge plan

News of the court referral comes as the chances of the lodge being built – at Blue Lake-owned Guide Hill Station, but on Crown land held by electricity company Meridian Energy for decades – have been dealt an initial blow.

The district council’s consultant planner – whose report will now go to the Environment Court – has recommended the consent be declined, mainly over concerns the lodge would change the landscape “character” of the lakeside land. Nick Boyes’ report says the proposed lodge, paired with a nearby gatehouse building, is in the most practical location within the lakeside land and would be largely hidden from public view. The site, now, is dominated by exotic trees.

But, if built, the lodge would be the first occupied building on the lake’s eastern shore. The only other building on that side of the lake is the Pukaki Power Station, 9km to the south.

Boyes agrees with the council’s consultant landscape architect, Jeremy Head, that “the proposal, regardless of mitigation proposed, will have significant adverse effects on landscape character”.

The central landscape issue for Boyes and Head is “appropriateness” – whether a development of that “manner and scale” is “fit for place”, so close to the lake. While his recommendation is “finely balanced”, as the proposal isn’t contrary to district plan, the short answer is no, in his opinion it’s not appropriate.

Approving the lodge proposal “would adversely affect the public’s confidence in the integrity of the district plan to protect the landscape values of the Mackenzie District”, Boyes says.

His report outlines the many hurdles the proposal has to overcome. It’s within what’s known as a lakeside protection area. Under the council’s district plan, with landscape protection strengthened by recent plan changes, the site is zoned outstanding natural landscape and is a high visual vulnerability area. Under district plan rules, buildings in such areas are strongly discouraged.

Farm buildings are anticipated to be built within what’s known as a farm base area – but the lodge site is outside that, on rural-zoned land. The lake, itself a site of natural significance, is wahi tapu and wahi taonga. All 18 submitters, including local runanga, oppose the lodge plan, mainly over landscape concerns and proximity to the lake.

Despite all of that, Boyes says the chances of creating a precedent by approving the lodge are not as significant as it might first appear. The Crown has already subdivided the land in anticipation of selling it to the original farm station owners and Boyes says there are few lakeside areas with vegetation. 

Mitigation planned

Blue Lake proposes mitigation for its lodge plans. It has offered to pay for a section of the Alps to Ocean cycleway that passes near the proposed lodge site. As part of the proposal, an extra 657ha would be added to a drylands conservation covenant area. Screening of the lodge is planned as part of a 10-year management plan to uproot exotic trees and plant more natives.

However, peer reviewers have raised problems.

Consultant ecologist Mike Harding describes the vegetation management plan as “laudable but ambitious”. Much of the 1755ha proposed covenant area at Guide Hill will be protected under conditions agreed with the Overseas Investment Office, when Blue Lake bought the station. Harding says the covenant area has significant values but it is already being managed in a sympathetic way and is substantially protected from development by district plan rules.

“Protection of the area as a drylands conservation covenant appears to provide little net ecological benefit,” he concludes.

(The Department of Conservation and environmental lobby group Forest & Bird, which oppose the consent, note that protection of the covenant area’s proposed 657ha extension is watered down because Blue Lake wants to retain the ability to construct buildings there. The company also foreshadows its intention to undertake a plan change for all of Guide Hill Station – at which point the covenant would be “subsumed” and “surrendered”.)

Overall, Boyes says the extended conservation area isn’t sufficient compensation for the proposal’s “significant adverse effects”. Also, he says it’s “questionable” that indigenous plantings could make up for the change in landscape character created by the proposed buildings.

The underlying issue at Guide Hill – literally – is the land’s ownership. The lodge site is Crown owned and LINZ confirms no decision has been made about selling it, despite earlier signals it intends to do so. If Blue Lake’s consent is granted and it doesn’t own the land, it will need Crown approval to build the lodge.

Complicating the issue is an operating easement over the land in favour of NZX-listed energy company Meridian, which is still 51 percent owned by the Crown. Meridian opposes the lodge proposal. In a December 6 letter to Blue Lake, the company says it doesn’t want to take part in a public hearing “as it will not serve any additional purpose”.

Asset maintenance manager Mat Bayliss writes that Meridian’s operating easement states any land disposal must first be subject of a deed of covenant and, further, the company must approve any change of use. Bayliss adds: “Any approval sought within the operating easement would not be forthcoming.”

That has left consultant planner Boyes scratching his head. His report states: “It appears somewhat contradictory that the Crown would on the one hand be seeking to repatriate the lakeside land to the former owner if it was still required by Meridian for electricity generation purposes.”