Peters wary of land sale idea
Winston Peters doesn't approve of selling Crown land to fund infrastructure, distancing himself from a policy being considered by the Labour-led Government, Thomas Coughlan reports.
Ministers in the Government have repeatedly said that they are considering value capture policies as a potential source of revenue to fund infrastructure.
This was initially thought to mean a targeted rate applied to properties that rose in value as the result of infrastructure built nearby, but Newsroom reported last week that another option, involving the sale of Crown land, was also being considered — and could even be the favoured option, because of the difficulty of applying targeted rates.
But Acting Prime Minister Winston Peters called the sale of soon-to-be valuable land to fund infrastructure “a seriously old-fashioned view of sound economics”.
“So you put a railway in and the price of the land next to it that you might own goes rocketing up in value and you sell it for that purpose — if that’s what you’re suggesting, that sounds like the economies of other countries where railways were (sold) in past times even over 100 years ago,” Peters said.
He said he would only support the sale of Crown land if the land was being held “for no good reason”.
"Seriously old-fashioned economics"
The Crown land sale idea appears the most likely of a series of proposals for infrastructure funding presented to the Minister of Transport on February 8, which Newsroom has obtained under the Official Information Act.
The proposals were contained in an aide memoire prepared for Twyford ahead of his meeting with Auckland Mayor Phil Goff where value capture opportunities for the Auckland City Rail Link were discussed.
While the opportunities for a targeted rate to be levied on businesses was considered, the document noted it was “not practicable” given “the amount of preparatory work and engagement with the business community that would be statutorily required”.
Instead, the document noted that “publicly owned land (both Crown and council) provides a direct pathway to redevelop and create value uplift opportunities around the stations”.
“We understand that there is crown and Auckland Council land near the Mt Eden station,” it said.
The document said the Unitary Plan had enabled more intensive zoning in the city centre, “enabling intensification around the CRL stations and maximizing opportunities for potential value capture”.
It noted that “optimistic” forecasts had estimated that the City Rail Link could increase the number of dwellings feasible within station catchments by 41 percent, from approximately 40,000 to 57,000.
This is a form of value capture known as “joint development”. A joint development, according to an earlier Ministry of Transport briefing to Twyford, also obtained under OIA, is a project negotiated between the Government and private developers under the assumption of the “mutual recognition of the enhanced real estate development potential” of transport infrastructure that will be built.
The Government receives payment from the private sector for the sale of land adjacent or close to the infrastructure project. Payment could also come in the form of levies or lease payments.
The previous document cautioned that joint developments are criticized for providing “excessive benefits to private developers at the expense of taxpayers”.
Joint developments also combine Public-Private Partnerships and state asset sales, two controversial topics that were criticized by all three governing parties while in Opposition, although Twyford has been clear that he supports some PPPs for transport infrastructure.
Announcement still some time away
Newsroom understands an announcement on value capture is 18 months away. It is understood that proposals, including both the sale of land and the imposition of a targeted rate are still being worked on.
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