Project Auckland

Project Auckland Friday, October 30, 2015

Section D

FIVE BIG YEARS Time to savour the successes of the Super City

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ongratulations, Auckland.

This weekend is the fifth birthday of the Super City.

Five years ago, in what was the biggest and most complex merger in New Zealand’s local government and corporate history, the late Mark Ford and his team at the Auckland Transition Agency broke eight councils into bits and reassembled them into one new Super City with assets worth $29 billion and annual revenues of $3.1 billion.

It was a complex exercise, likened to joining together eight jumbo jets while they were still in the air.

On November 1, 2010, the Auckland Council was born, replacing the existing Auckland Regional Council, Auckland City Council, Manukau City Council, North Shore City Council, Papakura District Council, Rodney District Council, Waitakere City Council, Franklin District Council and their associated community boards.

The ambition for the new Super City was breathtaking. The project was risky. But what project worth doing was ever straightforward? It was also done under extreme time pressure.

Auckland is now on its way to being an internationally competitive, inclusive and dynamic economy; a great place to live and conduct business; and a place buzzing with innovation, where skilled people work in world-class enterprises.

The city is also bursting its seams through an influx of foreign immigrants — particularly from Asia — and New Zealanders who want to move north. This has contributed to a Auckland housing shortage and rampant house price inflation.

But it is also a vote in the city’s future.

For this year’s Project Auckland report, Mayor Len Brown has issued

Michael Barnett explains why the fast growth of the Super City means we need more fixes — D10

a mayoral scorecard charting progress on some key indicators over the five years he has worn the Auckland mayoral chains.

A 30-year Auckland Plan has been adopted.

The Government is signalling it will likely step in to help Auckland Council make critical decisions on the housing front.

Auckland also retains its third place on the Mercer Quality of Living rankings.

Brown will face challengers for the mayoralty next year from those who

believe they have better leadership smarts to push through a new ambitious agenda for Auckland.

This is also the 10th issue of Project Auckland, an integral part of the Herald’s annual Business Series. In our first report in 2006, we asked whether “Auckland was up for it?’’

We wanted to focus attention on Auckland’s drive to increase its international competitiveness and attract and retain the necessary talent and investment to ensure the city-region became a thriving metropolis.

Back then we were focused on Auckland’s importance to the New Zealand economy, the potential of Rugby World Cup 2011 to catalyse growth, the Metro Action Plan which had been formed by leading city organisations and champions with the assistance of an international review team, and the debate raging over future governance options for Auckland.

Auckland Chamber of Commerce chief executive Michael Barnett — who led the Metro project — now says Auckland’s fast growth is bringing challenges that are proving difficult to master, not least because we have a council that after five years still hasn’t fully established itself.

Barnett expands on his prescription in today’s report.

Former Cabinet Minister Rodney Hide — who was tasked by John Key to lead the implementation of the Super City project at Government level — also gives his unique take on its successes.

ANZ’s Sharon Zollner picks six key trends that will affect Auckland: House prices, migration, the rise of the Asian consumer, ageing populations. global warming and new technology.

There is much food for thought.

In the background, Ateed’s Global Auckland project is focused on producing a compelling contemporary story that makes Auckland stand out.

Auckland’s diverse population carries with it challenges, but also opportunities.

It is time to savour the Super City’s successes — before getting back to work on the next phase.

Inside

A super achievement Former Local Government Minister Rodney Hide reflects on the Super City — five years on.

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On the move Inaugural Super City mayor Len Brown is proud of the big strides that have been made in transport.

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A place to call home Housing affordability is a hot topic for the city. Project Auckland examines the problems and solutions.

— D3, D11-13

Heart warming Heart of the City is all about building a vibrant, exciting centre for residents and visitors.

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International interest in screen precinct Graham Skellern

An international collaboration between two heavyweight private companies has emerged as the likely vehicle for a proposed screen precinct at Hobsonville Point.

Discussions with the preferred respondents are under way after the newly-established Auckland Investment Office sought expressions of interest to establish the screen innovation and production precinct on 20 hectares of council-owned land overlooking the Waitemata Harbour.

A television and film production company has also expressed strong interest in relocating to the precinct as anchor tenant, and Auckland Tourism, Events and Economic Development is in the process of identifying further industry-related tenants.

The precinct plan, with the potential for up to 12 sound stages, will be considered by Auckland Council’s development committee on November 12.

The Auckland Investment Office

An artist’s impression of what the Auckland screen innovation and production precinct could look like.

(AIO) received responses from China, Britain, the US, Australia and New Zealand, and other companies have indicated they want to talk to the preferred respondents.

The precinct has the potential to

benefit not only New Zealand’s screen industry but generate a commercial return on Auckland Council’s landholding, meet Government’s employment objectives at Hobsonville, and provide the private sector with

an attractive investment opportunity.

The council’s development committee will also consider the merits of an earlier Panuku Development Auckland proposal to develop the Hobsonville site into 14ha of residential and the remaining 6ha for a commercial town centre. The site was originally pencilled in for a marine precinct.

Ateed chief executive Brett O’Riley says an economic report predicts the screen precinct, attracting domestic and international film and television productions, would create 435 new jobs.

About 1000 people would be working there at any one time, with the anchor tenant accounting for up to 400 of them.

Over 25 years it is projected the precinct would deliver an additional $483 million to the Auckland economy (GDP), as well as adding $26 million to household incomes in the Auckland region each year.

O’Riley says the proposal provides the ”work, live and play” situation that

the Government has been pushing for Hobsonville.

The precinct will create quite a community feel — local residents will be able to participate as audience members in live television shows and become extras in local television and film productions.

Salaries paid in the film industry are higher than in many other sectors, and this will spill over into the community.

The studios in the precinct would include world-class sound stages with supporting green screen, live action, motion capture stages and production office facilities. They would be supported on-site by technology driven post-production, visual effects, sound and creative digital content companies.

Other associated businesses such as prosthetics, prop-making, lighting, catering, rentals and casting would likely take up tenancies. The precinct could also house a film school, research and development facilities, and scriptwriters and producers.

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nzherald.co.nz | The New Zealand Herald | Friday, October 30, 2015

Project Auckland

A super achievement Rodney Hide during the New Zealand Herald business luncheon for the launch of Project Auckland in 2010.

Five years on, former Local Government Minister Rodney Hide looks back at the formation of New Zealand’s first Super City with the Ministry of Health’s standards. In Franklin alone, Watercare has now invested $116 million to transform the area’s water supply and to ensure a safe and reliable water supply.

Previously, much of Auckland’s water was not safe. Now it is.

These are changes well worth having. They are things you don’t notice when they work but you do when they don’t.

The job of getting to a single council was a big one but the truth is I didn’t do much. Helen Clark had started the process with a Royal Commission of Inquiry that followed on from exasperation that the mayors of Auckland couldn’t agree on where to site a new stadium to be paid for entirely by taxpayers. The Commission reported and John Key agreed to establish one council as recommended.

The Government didn’t follow exactly the Commissioners’ recommendations because the Commissioners held back on recommending the ideal structure, thinking it would not be politically acceptable. The new Key-led Government figured if we were going to do the job we should do it properly. And we did.

My role was simply to support the transition team led by the late Mark Ford. I have no doubt that without Ford it would have been a disaster.

His leadership of Watercare and then of the transition is a huge legacy and Auckland is forever in his debt.

We didn’t just push eight councils

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alking in my old electorate recently, I was harangued by a former constituent. It was like old times. The concerns hadn’t changed. She was grumbling about council and her rates going up.

It was music to my ears: nothing had changed.

Of course, I was sorry her rates are rising but that seems always the way.

Just last week former Aucklanders were in the news complaining that their rates in Pokeno had gone higher than in Auckland. And they have no library or bus route.

I’m afraid rate hikes seem a forever-thing. We keep voting for politicians who promise things and those things cost money which means higher rates. Rates will only come down if we elect politicians promising less, not more. That’s not been the case for years. The fault is with us.

Central government politicians must also shoulder some of the blame. They keep making councils do more and more. I counted 108 things the new Auckland Council must do because central government says so.

And every one of those things costs.

Big time.

And the number of things that councils must do goes up every year.

The Government looks good promising this and promising that but it’s ratepayers who must pay and mayors and councillors who must bear the flak.

We get what we vote for with government and that’s ever more spending. I am truly sorry for that.

But it’s that nothing has changed with the “Super City” that made me smile. The Port hasn’t been sold to people with foreign-sounding names and shipped to China. The rubbish hasn’t piled up in the street. The libraries haven’t closed.

That was supposedly all to happen and worse as we shifted Auckland from eight councils to one. Those were the claims of the opposition at the time. And they were the headlines. It was fearmongering nonsense and to ratepayers and residents — five years on — nothing much appears to have changed.

That’s good.

The changes are all “under the hood”. We had eight councils trying to run Auckland. It was a nightmare.

Roading projects were constantly stymied through political gamesmanship. Maintenance and repairs would go to a council boundary — and stop.

The major infrastructure works that Auckland needed couldn’t happen.

All that’s now different. It’s still not easy but with one mayor, one council, and one plan, the impossible has become possible and, indeed, is happening.

A big change is that central government can now talk to Auckland council and get answers. That previously was not possible. The failure of Auckland’s mayors and councils ever to agree meant nothing much happened.

Infrastructure development in Auckland was forever stalled.

Having one mayor and one council has made a huge difference for transport and other infrastructure developments but also for schools, policing, health care and, well, everything that central and local government does.

There are other benefits.

The bylaws are now consistent across the city. That makes doing business across the region easier. It’s also fairer. There were 44 different water tariffs. Now there is one.

The service is better too. In ways you don’t necessarily notice but do care about.

I was shocked to discover most of the local water treatment plants were producing water that did not comply

together. We disestablished eight councils and built a new one. Nothing like it has ever been attempted in Australia or New Zealand.

And we did it fast. The job was done in less than 18 months.

It was high-risk. I remember at the ceremony swearing in the first mayor and council having my fingers crossed that the new computer system to be switched on at midnight would work. There was no contingency plan.

As it was no parking tickets could be issued for two weeks. No one noticed. We had a team working around the clock to get the first payroll and the final names were entered just as the pay fell due. It would have been a bad look if no one had been paid.

An entirely new structure was up and running. Ten thousand people had new jobs, less two thousand managers who were redundant to the new structure.

The transition was largely seamless. Council staff were amazing. Even those doubtful of the new structure got stuck in to make sure it worked and that the rubbish was picked up.

Those who lost their jobs worked up to their last day to ensure the best result for Auckland. The commitment to the task was huge.

We left much still to be done. The first mayor, Len Brown, and his councillors and the first two CEOs, Doug McKay and Stephen Town, have been outstanding in completing the job and establishing the new politics and new

I remember at the ceremony swearing in the first mayor and council having my fingers crossed that the new computer system to be switched on at midnight would work. There was no contingency plan.

culture the new structure demanded.

And so I smiled when my former constituent complained that nothing had changed with the new “Supercity”. Without Mark Ford and his team — and a very dedicated and committed workforce — it would have been a disaster. Instead it worked and now works well. Projects that would never happen are now under way.

I am especially proud of the Council Controlled Organisations (CCOs).

They were controversial but have proved their worth in getting good people running critical organisations who would not otherwise be attracted to council work. They have enabled the council to focus on governance and strategic direction and not get bogged down in management.

Two areas need consideration in my view. There are too many local boards. Twenty-one is too many to service and for the council and CCOs to consult. I don’t know the right number but a rationalisation is in order. A bigger jurisdiction would make them less local but the advantage would be in their say counting for more.

The Maori Statutory Board is a mistake. It’s a recipe for division and poor governance. The people running government should be elected, or appointed by those who are.

Critical decisions can turn on the vote of Maori Statutory Board members who themselves aren’t democratically accountable. The members of the Board are appointed by a Mana Whenua selection body. That’s wrong.

The Maori Statutory Board was the only decision in delivering the new Super City where short-term political interest overruled what was best for Auckland’s future. I am deeply embarrassed by that failure.

Apart from that, Auckland now has one mayor and one council able to get on and provide for Auckland without endless political stalemate.

Auckland’s future is in Auckland’s hands. And that’s precisely where it should be.

Councils 2010: Len Brown elected Mayor of Auckland 2010: Auckland Council formed Prior to 2010: ● Auckland Regional Council Seven local authorities each with their own mayor and councillors ● Auckland City Council ● Manukau City Council ● Waitakere City Council ● North Shore City Council ● Papakura District Council ● Rodney District Council ● Franklin District Council 2010: Six council-controlled organisations (CCOs) formed ● Auckland Council Investments ● Auckland Tourism, Events and Economic Development (Ateed) ● Regional Facilities Auckland ● Watercare Services ● Panuku Development Auckland (merged in 2015 from Auckland Council Property and Waterfront Auckland)

Project Auckland 2015 Executive Editor: Fran O’Sullivan Writers: Bill Bennett, Greg Hall, Graham Skellern, Alexander Speirs.

Sub-editor: Isobel Marriner Graphics: Isobel Marriner Advertising: Nathan Laing, Nancy Dudley nzherald.co.nz

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Project Auckland

Welcome to the promised land The Productivity Commission has proposed a cap on land prices, writes Alexander Speirs

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and bankers’ ability to profiteer from Auckland’s rampant land price inflation could be curtailed if the Government acts on recommendations from the Productivity Commission.

The commission wants the Government to set land price limits, in a move which would give Finance Minister Bill English a powerful new weapon to ease Auckland’s housing affordability problems and also derisk the New Zealand economy.

English — who is well aware of the sensitivities of Auckland developers — has yet to officially accept the commission’s recommendations which also include forcing local authorities to release land.

But he has sent a strong signal by saying he wants central Government to get closer to the Auckland Council’s decision-making processes to make sure it is working for the whole economy.

Productivity Commission chairman Murray Sherwin explained that “affordable, high-quality housing is one of life’s essentials, yet many New Zealanders struggle to find housing which matches their needs and incomes.

“One key reason why housing is so expensive and choices are so limited — especially in our fastgrowing cities — is the lack of sufficient land and rules that unduly limits how land can be used for housing.”

This is a major contributor to the rocketing price growth both within cities (brownfield land) and outside them (greenfield land). Development

Land at Link Crescent, Arkles Bay, Whangaparaoa, where 59 houses are planned.

Auckland — which is an Auckland Council controlled organisation — is developing new areas like the Hobsonville estate.

The commission has paid particu-

lar attention to Auckland — both as the country’s largest and most expensive city. “We found that the planning system is too slow to respond to increases in population and the

associated demand for housing,” said Sherwin.

“We also found that council planning decisions are often skewed in favour of existing residents and rate-

payers, and are stacked against accommodating new demand. These factors limit the supply of land for new housing and push up the value of existing houses.”

The report noted that where cities had an inability to grow upwards or outwards, it was inevitable that prices of land would rise. In Auckland, the price of land has risen to the extent that land now often accounts for around 60 per cent of the price to build a new home.

In all, the commission made 70 recommendations advocating for changes to building limits and restrictions, how rates are assessed and how infrastructure is funded, in addition to granting compulsory acquisition powers to central Government to speed up urban development.

Building and Housing Minister Dr Nick Smith said his key takeaway was that land supply was the most critical issue affecting housing affordability.

“The steep increase in section prices over the past two decades — as much as fivefold in Auckland — is the core issue we must resolve if we are to give young New Zealanders a fair chance at home ownership.”

Regulatory reform comprises a significant portion of the commission’s recommendations with fundamental changes to the planning system proposed.

The report found the existing planning framework suffered from a lack of cohesiveness in present law, failed to sufficiently account for national interests and was unresponsive to market conditions. ● More on housing — D11-13

INSIGHT # 23

IN 2014

AUCKLAND BUILT 38% LESS HOUSES THAN IT NEEDED

At ANZ, we are committed to helping Auckland grow, with a billion dollar pledge to help build more homes.

ANZ2683_PA

To find out how your business can help the city develop, call Mark Hiddleston, General Manager, Auckland on 09 252 3509.

For new build and major renovations, starts 01 October 2015 and ends 30 September 2017.

ANZ lending criteria, terms, conditions and fees apply. ANZ Bank New Zealand Limited Source: OECD Economic Survey NZ June 2015

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nzherald.co.nz | The New Zealand Herald | Friday, October 30, 2015

Project Auckland

The outlook for Auckland Auckland is undergoing major changes as it rapidly grows and develops. One constant is the increasingly global outlook of a city whose prospects will be influenced more and more by developments offshore.

ANZ Senior Economist Sharon Zollner identifies six world trends that will shape Auckland’s future

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The global stretch on house prices To say Auckland housing affordability is severely stretched is an understatement. The median Auckland house price is around nine times the median household income, making it one of the priciest cities in the world.

Auckland Council has just adopted a long-term target ratio of five.

Local issues including population growth and a relatively slow supplyside response are a large part of the story. But high, fast-growing house prices are something of a global phenomenon.

Stimulatory monetary policies pursued in the US, Japan, Europe and the UK to boost sluggish growth and inflation have seen cheap credit wash around the world looking for a return.

This has pushed down interest rates, stimulating the housing market. And some of this money will have found its way directly into New Zealand property.

We have no data to tell us how much influence these global factors have had. But it’s no coincidence in this global environment that cities as diverse as Auckland, Sydney, London and Vancouver have seen very strong housing markets in recent years.

There is anecdotal evidence that the Auckland market is cooling; the same is true over the Tasman. One suspects that when the cheap and easy credit stops, the global correlation won’t be any lower on the way down. This doesn’t spell imminent doom, but certainly heightened risk.

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The Age of Migration The world is increasingly a planet of migrants. United Nations figures show international migrants worldwide increased by a third to 232 million between 2000 and 2013. Auckland is getting more than its fair share: international arrivals were around 40 per cent higher in 2013 than in 2000 — and are currently running about 80 per cent higher.

Immigration has been the driving force of Auckland’s population growth, with the city receiving around 40 per cent of new migrants to New Zealand in the past year.

Though the Government has recently introduced bonus points for settling elsewhere for a period, Auckland will remain the destination of choice, as growing populations of migrants act as a magnet for new arrivals.

There are few signs of imminent changes to immigration policy, bringing both opportunities and challenges for Auckland, a city in which nearly 40 per cent of residents were born overseas. International connectedness benefits from such cross-border flows, and Auckland is a more outward-looking and vibrant city as a result.

The same internationalisation is happening in other world-class cities.

But there will be challenges in maintaining a cohesive city identity in the face of such a rapidly evolving population. The issue for Auckland’s leaders will be to ensure the Super City doesn’t devolve into a series of ethnicity-based “silos”.

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The rise and rise of the Asian consumer The rise of Asia and its enormous pool of consumers, coupled with our increasing connectivity to the region, is another global trend that looks set to continue — albeit with bumps along the way.

Nimble governance is an important factor — Auckland’s move to a Super City council should equip it to make cohesive responses.

Sharon Zollner

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Some of the ties relate to the fact that a growing number of Aucklanders were born in Asia, and have business and personal connections with the region. The new migrants have also brought about more direct flights, which benefits not only tourism, but also exporters focused on the vast potential that Asia offers.

An increasing number of free trade agreements and a relative geographic advantage compared to New Zealand’s more traditional markets means the tilt to Asia is likely to continue. Ongoing urbanisation and a growing middle class will drive a trend lift in demand for our exports such as meat, dairy, seafood, fruit and vegetables. Auckland is well positioned as an export hub for transport and logistics, while also playing to the growing strengths of its own food and beverage sector.

New Zealand merchandise trade shares by destination

Ageing population and its impact on housing Rising life expectancy and low birth rates mean population ageing is a theme across much of the world. Though migration can provide some offset, Auckland’s population is set to age markedly over coming decades — though less so than other centres, particularly in the South Island.

The fiscal challenge will fall primarily on central Government.

From a regional perspective, it is perhaps ironic that Auckland has been building ever-larger houses at a time when the demand, including from older residents, will tend towards relatively smaller units.

Demand for apartments is likely to keep rising as household sizes decrease. The resulting densification will hopefully offset some of the infrastructure challenges that come with a growing population.

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Global warming Changing and increasingly erratic global weather patterns, and rising sea levels, could spell challenges aplenty for a coastal city such as Auckland. The physical impacts are not an economist’s area of expertise, and forecasts are uncertain, but it seems highly likely we’ll see an impact on the economy. At the very least, bolstering infrastructure against more challenging climate and sea conditions will divert funds from projects that would otherwise increase capacity in areas such as transport. Auckland has an enormous transport investment programme under way, and despite this, is expected to go backwards in terms of congestion over coming decades.

Having to strengthen the current network would detract from the much-needed investment program.

Net migration

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Brave new world of technology Change has been the new normal since the Industrial Revolution, and that includes the age of digital disruption. History shows that the cities that adapt, flourish; those that don’t, wither. Nimble governance is an important factor — Auckland’s move to a Super City council should equip it to make cohesive responses. Technological change will present both opportunities and challenges. Selfdrive cars and Uber-type services will bring many more transport options but require infrastructure investment to unleash their full benefits.

However, don’t count on less congestion. Self-driving cars will cut the time-wasting cost of sitting in traffic jams, making more people willing to do so!

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Project Auckland

Super City grows more diverse Investment is needed to make the most of the country’s changing population, as Greg Hall reports

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doing to make the most of our growth.

Who is where?

A Herald report released in May this year examined the settlement patterns of Asian migrants and the Auckland suburbs playing host to the most people of Asian ethnicity.

Over half of Auckland Central’s residents are ethnically Asian.

The numbers aren’t quite so high in the surrounding suburbs, but the data shows several concentrated clusters of high-Asian suburbs around Auckland.

Lynfield North, for instance, is made up of over 60 per cent Asian residents, and Hillsborough West is

58.9 per cent. Asians make up 72.1 per cent of the population in the suburb of Mission Heights. Epsom is currently 57.1 per cent Asian.

Among those with the lowest number of Asian residents are Herne Bay (4.5 per cent) Westmere (6.5 per cent), Clevedon (2 per cent) Arahanga (5.7 per cent) and Paremoremo West (5.6 per cent).

Other key takeouts: ● All of New Zealand’s 16 regions and nearly all 67 territorial areas are projected to see an increase in ethnic diversity over the next two decades. ● Of the 99 positions in the Auckland Council’s boardrooms and

executive management teams, 88 are currently held by white Europeans.

Education In the education space there are some schools with no European students.

The Auckland classroom has changed considerably, and so the education system needs to keep pace.

The challenge lies in teaching immigrant schoolchildren English, but also equipping all children with the ability to thrive in the new New Zealand.

English for Speakers of Other Languages (ESOL) is taught in 1342 schools to 34,000 students nationwide. These students come from 157

J000500

he Super City will be more diverse as it grows bigger.

The current population of Auckland City is 1,632,100.

As it stands now, 40 per cent of Aucklanders were born overseas and the population represents more than 200 different ethnic backgrounds.

More than half are “European or other”, just over 21 per cent are Asian, nearly 14 per cent are Pasifika and 10.4 per cent are Maori.

By 2038, Statistics NZ has the Auckland population ballooning to 2,379,500. Those classified as “European or other” will have shrunk to 42.3 per cent, while the proportion of Maori, Asian and Pacific inhabitants will have risen. Over 30.6 per cent will be Asian, 15.6 per cent will be Pacific and 11.4 per cent will be Maori.

Lawyer Mai Chen’s The Superdiversity Stocktake explores New Zealand’s increasingly diverse population. Chen says the status quo is not sustainable in light of her findings and investment is needed to make the most of the country’s changing population. The shifting demographics in Auckland are more than just numbers: they have implications for what we need to be

different ethnic groups, speaking 126 different languages.

The massive influx of migrants to areas that, in some cases, previously had very little need for ESOL, mean that schools can have difficulty keeping up with the demand. This is more of an issue than it needs to be, because ESOL training is currently optional as a part of teacher education in New Zealand.

The other side of the coin of changing demographics is that only 20 per cent of secondary school students learn a second language — a 20-year low. Considering the surge in New Zealand’s migrant population in that time, it appears that the utility of being multilingual is being undersold.

Marriage and partnerships Between 2001 and 2013, the number of Maori with a Maori partner dropped from 53 to 48 per cent for men and 52 to 47 for women.

In the same period, the number of ethnically Pacific people with an ethnically Pacific partner dropped from 70 to 68 per cent.

There is an increasing number of Pacific women with Maori or Asian partners.

Ninety six per cent of European males and 94 per cent of European females have European partners.

The increase in ethnic intermarriage is leading to more New Zealanders identifying with more than one ethnicity.

Between 2001 and 2003, those identifying with more than one ethnic group has risen from 9 per cent to 11.2 per cent.

Currently, 53.5 per cent of Maori and 37.2 per cent of Pacific people identify with two or more ethnic groups, according to the 2013 census.

$8 billion Additional annual GDP impact from enhanced R&D and innovation activity by 2025

$20 million

$265 million

Agreement signed with InnoHub for the Chinese incubator to invest $20m in innovative Auckland businesses

Foreign investment secured for Auckland

by ATEED in 2014/15

Helping grow businesses

$7.2 billion

$1.76m NZTE capability development vouchers $3.59m Callaghan Innovation R&D grants

Grow the visitor economy from $4.8b in 2012 to $7.2b by 2021

Leading the successful transformation of Auckland’s economy

*facilitated by ATEED in 2014/15

aucklandnz.com/business business.ateed@aucklandnz.com $85.6 million Auckland’s Major Events Fund portfolio injected $85.6m new money into the regional economy in 2014/15

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nzherald.co.nz | The New Zealand Herald | Friday, October 30, 2015

Project Auckland

Summit a chance to show us off Next May it will be our turn to host the annual tripartite summit with Guangzhou and Los Angeles, reports Graham Skellern

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uckland has a prime opportunity to showcase its innovation and business prowess to two of the world’s leading cities, their investors and immediate markets.

From May 16 next year Auckland will be hosting the second Tripartite Economic Alliance summit involving sister cities Guangzhou in China and Los Angeles in the United States.

Auckland Tourism, Events and Economic Development (Ateed), which is organising the business summit in conjunction with Auckland Council, is planning for delegations of up to 100 from Guangzhou and Los Angeles.

The delegations will mainly comprise businesspeople and research and development specialists representing their own companies, educational institutions or industry organisations.

“We are now part of a significant economic bloc (with Guangzhou and Los Angeles) and the city needs to put its very best foot forward at next year’s summit.” says Auckland Mayor Len Brown. “We have the chance of displaying all our great high tech and innovation to a lot of potential investors and joint venture partners.

“We have formed deep political and cultural ties with the two cities, and the summit (next year) is one of the most significant commercial oppor-

tunities presented to the city.”

The theme for the summit is “Making Connections” and Ateed has targeted five specialist sectors — where Auckland has world-leading expertise — to catch the eye of the visiting Chinese and Americans.

The sectors are: high-value food; advanced materials; screen, digital and gaming; smart data; and urban design. Ateed believes the visiting delegates will be keen on the research and development taking place in these sectors within Auckland’s universities, GridAKL innovation precinct, Crown Research Institutes and innovative businesses.

“We want to make the summit interactive rather than just having a twoday conference in a hotel,” says Steve Armitage, Ateed’s general manager — external relations. “We will take delegates around the city and get them engaged with businesses and industry.

“The focus will be on networking — if you don’t provide the right atmosphere then it’s hard to make genuine valuable connections. We want to showcase what’s good in Auckland to the bigger international economies, and demonstrate that the city is a destination for business, trade and investment in key growth sectors.”

The ground-breaking alliance agreement was signed by the mayors of Auckland, Guangzhou and Los Angeles in November 2014. The cities

Attending the first summit in Los Angeles this year were, from left, Los Angeles Council Member Tom LaBonge, Auckland councillor Denise Krum, Guangzhou Mayor Chen Jianhua and Auckland Mayor Len Brown.

agreed to work together to leverage economic opportunities, and the Auckland mayor led representatives of 43 businesses and organisations to Los Angeles for the first annual summit in June this year.

Nearly all the delegates reported that by participating in the delegation they gained a greater understanding of how to successfully do business in either China or the United States. They indicated that a total of 300 leads were achieved from engaging with contacts at the summit and other related events.

They are keen to strengthen those relationships and contacts at the Auckland summit, and will be joined by other local companies which didn’t attend the first summit in Los Angeles.

Building sustainable communities We build and maintain the roads, rail, ports, airports, parks and property developments which make up connected, sustainable towns and cities.

fultonhogan.com

Some of the developments in Los Angeles included Flux Animation Studio finding a potential new distributor, securing contract work with Disney and discussing two potential contracts with a Canadian production company.

Screen Auckland staff held discussions with Guangzhou and Los Angeles on co-production projects, which will result in more movies being filmed here — productions worth tens of millions of dollars to the Auckland economy.

Whanau Tahi, part of the Te Whanau O Waipareira Trust, signed a memorandum of understanding with the Los Angeles-based United American Indian Involvement (UAII) to deliver a framework for integrating health, education and social services, and

improving outcomes for families — based on the New Zealand Whanau Ora concept.

Stephen Keung, Whanau Tahi chief executive, will be back in Los Angeles next month presenting a plan to UAII that will lead to broader community engagement and greater funding opportunities. Los Angeles Country is home to 300,000 Native Americans, and UAII is keen to develop its own Whanau Ora-type centre.

Auckland will be looking to progress its involvement with Guangzhou incubator, InnoHub, one of China’s largest network of incubators and investors with a presence in 10 Chinese cities. InnoHub is China’s first internetbased entrepreneur services organisation, providing incubation, acceleration, investment and social networking via an online cloud-based data system.

Ateed chief executive Brett O’Riley signed a memorandum of understanding with InnoHub president Hongbo Xu, setting out a framework of cooperation under the tripartite agreement.

InnoHub will establish a $20 million fund to invest in smart Auckland companies and it plans to establish an office in the city, most probably at GridAKL. InnoHub is particularly interested in young media and telecommunications companies, and mobile commerce for food, tourism, education and agricultural products.

The New Zealand Hi-Tech Awards gala dinner and an innovation forum will be held in Auckland during the week of the summit — providing the delegates with further opportunities to gain an insight into local technology developments.

D7

Project Auckland

Our place in the world Ateed’s Global Auckland project has reached the creative phase where the region’s story and brand identity will be written and told to the rest of the world, writes Graham Skellern

A

new brand identity that provides more meaning, clarity and understanding will give Auckland a stronger presence in the global village, says a university marketing expert.

Rod Brodie, professor in the marketing department of Auckland University’s Faculty of Business and Economics, says “we are a pipsqueak in the world (in terms of profile) and a long way from everywhere else.

“But we are a distinctive and very interesting multi-cultural South Pacific city with opportunities in education and major challenges in infrastructure. We have a vibrancy, innovativeness and openness.

“I’m all for city branding but it has to be used as a vehicle to build a value proposition, create meaning, and engage people. With all storytelling, it needs to be facilitated, articulated and aligned with different stakeholder groups. The brand is not trying to manipulate people’s thinking; it is letting them develop that story,” says Brodie.

He is backing the Global Auckland project, being managed by Auckland Tourism, Events and Economic Development (Ateed) and overseen by its independent advisory group, chaired by NZME chief executive, Jane Hastings.

Other advisory group members are Michael Barnett, Auckland Chamber of Commerce chief executive and Heather Shotter, chair of the Committee for Auckland. Project advocates are Andrew Ferrier, chair of NZ Trade and Enterprise; Stuart McCutcheon, vice-chancellor of Auckland University; Mike Hutcheson, executive director of Image Centre Group; Sir Bob Harvey; Tupara Morrison of Ngati Whatua Toki Taiao; Martin Snedden, Duco Events chief executive; and Anthony Healy, Bank of New Zealand chief executive.

The project aims to produce a compelling, contemporary story that makes Auckland stand out and be truly competitive on the global stage.

The clear and unique brand, describing the persona of the city, will be designed to make Auckland desirable as a business location, visitor destination and place to call home — and enhance economic growth.

Brodie says city branding or identity has moved from the traditional logos and images to operating in the inter-active social (media) networks.

“Once the stories are developed, they get shared. People hearing the stories also contribute and Auckland becomes part of the global village.”

The Ateed project team, including Colenso BBDO agency, has conducted in-depth interviews, surveys and focus groups here and overseas to gain insights into Auckland.

Surveys have been done through Auckland Council’s People’s Panel, KEA association and online Love AKL campaign.

Mayor Len Brown describes the refurbished Auckland Art Gallery as one of the world’s great architectural buildings; sandy beaches such as Cheltenham are a short distance from built-up urban centres.

At the time of writing, a number of emerging themes were being tested on a target audience involving businesspeople, potential investors, skilled migrants, international students and tourists from Australia, China and United States.

Some of the themes are based around lifestyle, business, events, study and tourism, and highlight Auckland’s features such as natural environment, diversity, freedom, space and safety.

Some of the value propositions are: ● It’s easy to do business in Auckland and there’s a can-do attitude. ● Talented people choose to be here to live, work and play. ● Auckland has become an international events destination. ● Students can study in world class institutions. ● Auckland has a great range of tourism experience.

The narrative, with branding, communication and marketing guidelines, will be finalised over the next two months, and the unified Auckland story will be launched early next year. The brand and story will be single-minded enough to be powerful but broad enough to encompass all

We have a vibrancy, innovativeness and openness.

,,

Rod Brodie

that is truly special about the place.

It will be a story that all Aucklanders can embrace as their own. It will be a story that attracts potential investors, skilled migrants, new businesses, high-value visitors and feepaying students.

Among the interviewees were two BBC presenters. One said Auckland needed to raise its profile. “From where I’m sitting in London, you must know that Auckland is off the map.

It needs to be a place that draws us,

and something that’s more than a Rugby World Cup in a stadium. It needs to be something that is clear about what Auckland is.”

The other presenter, an expatriate Kiwi, didn’t see New Zealand and Auckland as a place of business.

“Because of its size, it’s hard for New Zealand to be seen as a player when there’s only four million people.

“The key focus is agricultural and not the business environment, and therefore there’s no automatic

association with significant business.”

She said New Zealand hadn’t managed to sell itself. “I know there is really good entrepreneurship going on there but that’s a hard one to compete on with the rest of the world.

For everyone that goes there, the natural beauty is what they talk about — so give it to them.”

World cities expert Greg Clark, who visited here last year, says the world needs to know what Auckland stands for from a business and investment perspective — today it has no profile.

Leading international place brand authority Simon Anholt says: “Unless you’ve lived in a particular city or have a good reason to know a lot about it, the chances are that you think about it in terms of a handful of qualities or attributes, a promise, some kind of story. That simple brand narrative can have a major impact on your decision to visit the city, to buy its products or services, to do business there, or even to relocate there.”

Brodie is a strong supporter of the brand identity for New Zealand wine — it adds to the 100% Pure New Zealand story and is based around the words “pure discovery”.

The wine story is: “New Zealand is a land like no other. New Zealand wine is an experience like no other.

Our special combination of soil, climate and water, our innovative pioneering spirit and our commitment to quality all come together to deliver pure, intense and diverse experiences. In every glass of New Zealand wine is a world of pure discovery. Welcome to our world.”

Brodie is also a fan of the “City of Sails” brand but it will be subsumed in the Auckland story. “One of our stories should be the innovation in our marine industry and America’s Cup racing, and City of Sails can come into play there.”

Brodie says the key thing is to integrate the Auckland branding into the New Zealand story. “We are not competing with Wellington or Christchurch — we are story making as a country. “ A co-ordinating group needs to ensure the different agencies such as Tourism New Zealand, Air New Zealand and NZ Trade and Enterprise are delivering a consistent story.

“The branding will be far more effective if it’s presented by a network,” he says.

D8

nzherald.co.nz | The New Zealand Herald | Friday, October 30, 2015

Project Auckland

ON THE MOVE

Five years after being elected the first mayor of the merged super city, Len Brown tells Graham Skellern big strides have been made to improving the transport system — a key to making Auckland more liveable

A

uckland is on track to become the world’s most liveable city in five years, says Len Brown. “We’ll have an internationally competitive transport system and have shown a true commitment to transforming the city.”

Brown says Auckland’s failing was its transport and infrastructure but otherwise the city had a high standard of living.

“We have a tolerant, inclusive multi-cultural society, an exciting arts and culture and events sector, a diverse economy with high-tech investment and development, and an increasing lift in standards from students coming though high schools.

“Put all these factors together, and given the energy that has gone into the transformation, it will be very hard for anyone not to say that Auckland is the most liveable city in the world,” says Brown, who is banking on getting the City Rail Link completed in that time.

Auckland is presently ranked third behind Vienna and Zurich, and ahead of Munich and Vancouver, on the Mercer 2014 Quality of Living rankings.

When Brown was elected the first mayor of the amalgamated Auckland Council five years ago, he was determined to make the city more liveable — the 30-year Auckland Plan, which was adopted in March 2012, reinforced his drive.

For the first time, the city had a single, comprehensive plan to increase the prosperity of all its residents and to ensure Auckland competes on the international stage.

The plan was based on: ● reducing transport and housing shortages; ● giving children and young people a better start; ● creating more jobs; and ● protecting the environment.

Brown was passionate about improving public transport, reducing congestion on the roads and righting the wrongs of “some horrendous decisions” years back, such as removing the trams and encouraging urban sprawl around motorways.

He pushed hard for the City Rail Link and wanted Auckland to be a more compact, quality city where people lived near transport hubs and moved around more easily.

“In five years’ time we will have finished the city rail tunnel, built three extra busways, doubled the rail and bus patronage, opened the $1.4 billion Waterview road connection and 70 to 80km of cycleways, built one or two extra ferry terminals and increased the ferry operations.

“We will have finalised the main (Central and Northern) wastewater interceptors, have the ability to take more water from the Waikato River, welcomed five new hotels, built a third rail line between Ports of Auckland and its inland port at Wiri, and done work around the wharves.

“SkyPath (across the harbour bridge) will be operating, the first part of the light rail system (modern trams) will be in place, we will have the beginnings of the second harbour crossing. and we will have a tree on One Tree Hill,” says Brown.

He says uniting the city has given Aucklanders the chance to be proud and passionate about their place.

“We have 10-15 years to harness that goodwill and unifying spirit for transformational change before people lose energy and drive.

“At the end of the (council’s) first term we put the foundations in place,

We have to keep moving at a fast pace to get the projects done Len Brown

,,

and now we have to keep moving at a fast pace to get the projects done.”

Brown says the $2.5 billion City Rail Link — with two new stations — is a key transport project to improving Auckland’s global liveability.

“It is hugely significant for urban regeneration and will attract millions of dollars of residential and commercial investment around the link.

“It is also hugely significant as a transport enabler and assistant in the de-congestion of our roads. It will give Aucklanders a sense of having regained their mojo — that as a city we can get stuff done.” (The City Rail Link was first proposed in the 1920s — it was then estimated to cost £600,000.)

Brown says the funding deal for the 3.5km-long City Rail Link is “close enough to not talk about it. The Government is now working more

closely with us under the Transport Accord, and we are determined to deliver a transport fix at pace that will benefit future generations of Aucklanders.

“We are starting enabling infrastructure works for the rail tunnel next month and we can’t afford to stop. If we want to build it in one, then ideally we need a final agreement from Government 18 months to two years down the track,” he says.

Brown’s funding case is boosted by the projections that Auckland will experience 20 million passenger train trips by 2017, three years ahead of the Government’s target of 2020 when it said it would pay half for the City Rail Link.

The project includes new stations at Aotea Centre and Karangahape Rd and a redeveloped Mt Eden station which connects to the western rail

line. “We have had a 22 per cent increase in rail patronage in the past year and 10 per cent lift in bus and ferry trips,” says Brown. “The roll-out of the electric trains (costing $650 million) and the $1.9 billion railway upgrade has seen people flocking on the train services. We are celebrating that.”

He says the $33 million SkyPath cycle and walkway — linking the city centre with North Shore — should be built and operating within 18 months to two years.

Light rail would alleviate bus congestion around Symonds St, Dominion Rd and Mt Eden Rd, and Brown says decisions on introducing modern trams should be made in the next 18 months to two years.

Work is starting on another bottleneck, the Southern Motorway, by widening the stretch between Papakura and the South Western Interchange at Manukau. It’s a $268 million Government-funded project, and just to the east the council is upgrading the Mill Rd corridor from Manukau to Drury into an expressway to further relieve pressure on the Southern Motorway.

Auckland is facing a $12 billion shortfall in transport funding over the next 30 years and Brown believes motorway tolls can still fit the bill.

Cars would be charged $2 per trip and trucks $6 in the peak hours of 6-9am and 3-6pm.

“Trucking firms are supporting this, and commuters and students can get out of their cars and jump into the buses, trains and ferries. I’ve attended transport meetings over the past two months and there’s minimal comment about a transport levy.

“It’s fair to say the Minister of Finance has said motorway tolls is something they will look at. It’s a matter for further discussion and it’s one way of assuring Aucklanders that the transport deficit will be addressed,” Brown says. “Motorway tolls will critically provide a congestion management system and an alternative revenue stream.

“People will have a choice — they can go on the motorway in peak hours or go on to the side roads and use public transport.”

After five years, progress has been made in transport and Brown is quick to add that other major gains have been achieved. “We have seen 20 per cent growth in visitor nights on the back of building a great tourism and events destination. We are short of 3000 hotel rooms and that’s the reason you are seeing a high level of hotel building.

“The employment rate has grown 12 per cent with 35,000 new jobs, and unemployment has reached a 10-year low. We are genuinely getting movement in reducing youth unemployment because of the Youth Connections and Employer Youth Pledge plans.

“The work we have done with Los Angeles and Guangzhou on the economic alliance, and signing a memorandum of understanding with Chinese incubator InnoHub has built energy around the high-tech, start-up area.”

Brown says the Auckland economy is running strongly. “That’s good for the Government coffers, and the health and wellbeing of the city. We have delivered on the expectation of (council) amalgamation. The city will contribute more strongly to the national economy. Auckland is seen as a conglomerate and there is a stronger focus for investment in economic growth,” he says.

D9

Project Auckland

Towards a most-liveable city On taking office, Len Brown asked the Office of the Mayor to prepare a set of measures that would monitor progress against his vision — To Create the World's Most Liveable City.

These measures sat within four broad areas that Auckland needed to address if it was to have an internationally-competitive quality of life. The results are outlined below:

1

STRONG COMMUNITIES Educational Achievement (percentage achieving NCEA Level 1 Literacy and Numeracy) This is considered a minimum level of literacy and is internationally comparable under the OECD PISA system. Auckland's performance has improved over the 5-year period from 2009-14. (Source: Ministry of Education) Result – 11% improvement Youth Not in Employment, Education or Training (NEET) This is an indicator of "at risk youth".

It measures the percentage of 15 to 24 year olds who are not in education, employment, or training. (Source: Department of Statistics) Result – 17% improvement Crime reported per 100,000 people There has been a substantial and steady reduction in crimes reported to Auckland’s three police districts since 2010. (Source: NZ Police) Result – 21% improvement Graffiti complaints received This measures the number of incidents

of graffiti reported to Auckland Council and removed by Councils contractors each year. Rapid removal of graffiti is intended to discourage repeat offers and reduce the frequency of this antisocial behaviour. Note: data has only been available for the three years from July 2012 to June 2015 Result – 26% improvement Housing affordability index This compares Auckland's average household income/average house price ratio with the national average (set at 100). Auckland's housing affordability has deteriorated compared with the national average.

(Source: Massey University) Result – 23% deterioration Housing supply (number of new dwelling consents) Measures the number of new dwelling consents lodged with Auckland Council each year. The logic is that there is a very close relationship between consents lodged and dwelling completions. Consents lodged have more than doubled since 2010.

Result – 145% improvement

2

FIXING TRANSPORT Public transport For reducing congestion on the region‘s roads, facilitating more concentrated employment in major employment areas and reducing the per-capita investment in required transport infrastructure, a greater uptake of public transport is needed. Public transport patronage growth is well ahead of forecasts.

Result – 20% improvement (rail up 43%, bus up 16%, ferry up 15%) Expenditure on Cycleways Local and national cycling experts have repeatedly told Auckland Council that to increase the number of commuters, school children and recreational cyclists, investment in safe dedicated cycleways is needed.

Cycleway investment has improved markedly since 2010 and is budgeted to significantly increase further.

Result – 49% improvement Congestion Time lost to congestion lowers economic productivity and the quality of life of road users. It is the primary factor holding Auckland back from achieving even higher scores in international liveability surveys.

Various traffic management investments have seen congestion drop in Auckland over recent years.

Population and economic growth, however, is likely to make such reductions unsustainable. (Source: NZTA) Result – 10% improvement Expenditure on Roads Operating expenditure on local includes the costs of operating and maintaining the local (non-state highway) road network, as well as the costs of borrowing for new infrastructure. Auckland requires investment in an efficient road-based transport network for growing freight and people movements, as well as a corridor for utilities. (Source: Auckland Council) Result – 27% improvement

AUCKLAND MAYORAL SCORECARD 2010-2015 Overall Liveability 19% Housing Approvals 145% Cycleways/Walkways 49% Roading Expenditure 27% Graffiti Eradication 26% Crime 21% Public Transport 20% Visitor Guest Nights 20% Youth not in Education, Jobs or Training 17% GDP per Capita 14% Employment 12% Literacy/Numeracy 11% Incomes 10% Congestion 10% Marine Water Quality 4% Diesel and Petrol Sales -1% Air Quality -4% Healthy Streams -21% Housing Affordability -23%

WORSE

BETTER

3

OUR ECONOMY GDP per capita GDP is a measure of the value of economic activity (production or expenditure) within a set of borders within a period of time.

It is a guide to whether an economy is growing or not. GDP per capita is an important measure for an economy that is also experiencing population change. For example, if population growth is higher than GDP growth, it suggests that production or expenditure per person is shrinking.

Auckland's GPD per capita is growing.

Result – 14% improvement Jobs (total employment) Employment data indicates whether Auckland is creating jobs fast enough to deal with population growth and the resulting number of people entering the workforce. If employment growth is not sufficiently strong, unemployment will rise.

Result – 12% improvement Incomes (average weekly personal income) There is a range of income statistics.

Weekly personal income is one that is measured across all income sources, people easily relate to it and it is readily available from Statistics NZ Result – 10% improvement Commercial Accommodation (total guest nights) Commercial accommodation provides a measure of both the health of the visitor/tourism economy and the degree to which Auckland business connects to the rest of New Zealand and the world. Growth in guest nights,

high occupancy rates and consents for large hotel investments suggest this part of Auckland's economy is doing very well.

Result – 20% improvement

4

OUR ENVIRONMENT Greenhouse Gas Emissions (Diesel and Petrol Sales) Diesel and petrol sales are used as a proxy for overall greenhouse gas emissions and represent a source of such emissions over which Council has influence through its transport investments. An example is the recent investment in electric trains. (Source: Local Authority Fuel Tax Data) Result – 1% deterioration Marine Water Quality Auckland Council carries out regular testing of beaches and marine areas around the Auckland Region. This measure shows the percentage of tested areas showing fair to excellent water quality over multiple tests.

Result – 4% improvement Freshwater Quality Like marine areas, the region’s streams are also frequently tested for organic and inorganic contaminants.

Result – 21% deterioration Air Quality Regular sampling of air quality is performed around the region, particularly urban areas. Soot-like particle measures have been chosen because they are a particular health risk and as a proxy for a broader range of air born pollutants.

Result – 4% deterioration

Two faces of the housing market The fall-out from the hot Auckland housing market has created contrasting impressions on the latest Mayoral Scorecard. The housing impact sits at the top and bottom of the rankings.

Housing affordability has worsened by nearly 23 per cent but Auckland Council has responded to the short supply of homes by issuing a record number of consents for new dwellings during the past financial year.

Auckland’s affordability index has increased from a base rate, relative to the rest of New Zealand, of 127 in 2011 to 156 in 2015 – making houses further out of reach for many first homeowners.

But the council issued 8300 permits in 2014-15 compared with 3394 in 2010-11 – an increase of 145 per cent. The permit activity will lead to increased residential building.

Auckland Mayor Len Brown says it takes up to a year, following the issuance of permits, to get all the building up and running.

“We have consented a huge increase in brownfield and greenfield development and we need the sector to be building at a much greater pace and higher focus.’’

Brown says the housing affordability will be eased by building a range of housing types with price points that enable first homeowners to get into the market.

He believes a price point is $500,000 where a couple on two incomes can save the 10 per cent deposit of $50,000 and move into their own home.

“Maybe they have to start off in an apartment or townhouse in a lowerpriced area – that’s how we started off, not at the top with a house in Remuera.’’

In its drive to make Auckland a more liveable city, the council has done well on developing more cycleways and walkways,

eradicating graffiti, increasing the spend on local roads and the number of public transport trips, and boosting visitor guest nights.

Employment, particularly for young people between 15 and 24 years, has improved and the city now has a workforce of 791,500, up from 708,100 in 2010-11.

The regional economy (GDP per capita) has grown 14 per cent over the past five years, from $48,488 to $55,426.

Overall, Auckland’s liveability has increased 19 per cent over the past five years, according to the Scorecard measurements.

Traffic congestion remains a worry.

The time lost to congestion per kilometre travelled is now 37 seconds, slightly improved on the 41 seconds in 2010-11.

According to the Scorecard, the council has increased its investment in cycle and walkways by 49 per cent, spending $12.2 million in 2014-15 and $8.2 million in 2010-11.

The number of public transport (bus, train and ferry) trips has jumped from 66.65 million in 2010-11 to 80.07 million in 2014-15 – an increase of 20 per cent.

There is less graffiti in the city, with 92,471 items being removed in 2014-15 compared with 124,775 in 2012-13.

Total visitor guest nights have risen to 7.13 million, putting pressure on the availability of hotel and motel beds, compared with 6 million in 2010-11.

Overall, Auckland’s liveability has increased 19 per cent over the past five years, according to the Scorecard measurements.

D10

nzherald.co.nz | The New Zealand Herald | Friday, October 30, 2015

Project Auckland

Fast growth needs more fixes A

uckland is a city where people want to be. The private sector is endorsing Auckland as a growth-led city through the billions of dollars it is investing and the many thousands of jobs it is planning to create in the next few years.

In the central city, 19 major private sector commercial developments have either just started or will soon.

They include three multi-level towers of 30, 36 and 52 storeys; the New Zealand International Convention Centre and a number of hotel, retail, office and apartment developments.

They will add about 15,000 office jobs to the current 70,000 in the central city. The city centre is scaling up and reflecting international confidence to invest in a future here. If that is not an endorsement of Auckland and its long-term future, I don’t know what is.

But our fast growth is bringing challenges that are proving difficult to master, not least because we have a council that after five years still hasn’t fully established itself.

Since day one there have been a number of things missing in the way we govern ourselves — some of which we are only now starting to address and others we have yet to tackle but will need to for Project Auckland’s ultimate success.

When Auckland Council was formed in 2010, we were Australasia’s fastest-growing city. We still are. But we have been struggling to fully grasp the change of leadership and management focus needed to get in front of Auckland’s big issues and accelerating growth curve. Instead, we have spent our first five years stuck in

Auckland is an outstanding city in which to live, work and locate a business, but there are vital things missing that need fixing for our long-term success, writes Michael Barnett

It needs to be an Auckland story told at a human level.

Michael Barnett

doing things largely as we did under the legacy council model.

Still missing is a joined-up planning and investment strategy that brings urban and transport projects together. Still missing is a clear plan that reflects the scale of Auckland’s infrastructure requirements, especially transport and housing.

Still missing is a platform giving confidence to the private sector that Wellington and Auckland politicians and officials agree on the scope and

size of the growth-related issues Auckland faces.

There is work needed by local and central government to cut red tape and make regulatory changes needed to help Auckland’s growth rather than hold it back and add to its cost.

Despite the city’s rapid population growth, Auckland has significant skill shortages in sectors as diverse as construction, truck-driving and ICT. Still missing is a responsive, coordinated immigration and skills training policy able to quickly address Auckland’s immediate and medium-term employment needs.

Five years ago we said we would address Auckland’s huge youth unemployment issues. Can we honestly say we have got on top of this — or might we note that the effort has gone in, but the result is diluted by too many good intentions not brought to fruition or scale?

And still missing from council is a clear-sighted and creative policy to ease the burden on its 550,000 ratepayers for funding the city’s growth.

In an environment of low inflation, it is unacceptable — or as I have said elsewhere “lazy” — to impose a 9 per cent rate increase, let alone expect them to fund growth-related improvements that all 1.5 million citizens benefit from.

And missing from day one has been a suitable support policy and

manual spelling out what the city’s 21 local boards could and should be doing.

Auckland’s local boards are larger than many of New Zealand’s provincial cities and towns, yet the message I am receiving from across the city is that most feel under-resourced, ignored or if not abandoned by the council organisation.

Right or wrong, what this tells me is that we have some way yet to go to tell the story of the new Auckland in a way that gives Aucklanders an informed understanding of what really is happening to their city.

What has improved, what’s missing and what the consequences of Auckland growth will be to their local area — it needs to be an Auckland story told at a human level.

Nowhere is the need for an informed story on Auckland’s growth issues greater than in the debate over whether the city should expand outwards beyond the current urbanrural boundary or intensify and build up, with more multi-level apartment buildings.

Council’s just-announced review of assets and alternative revenue sources is a sign that it is, at last, starting to listen to its community.

The work to identify around 100 special housing areas should help fast-track around 47,000 new houses, or about 10 per cent of what is

needed, if the Auckland Plan is to be believed. As impressive as this progress is, it is still the case that the construction of new houses is failing to keep up with demand from the influx of migrants and young Auckland families seeking their first home.

Yet despite all this, the 1.5 million Aucklanders and the many new citizens arriving every day are saying that there is nowhere else they would rather live.

Auckland is a fast-growing city, I suggest, because of what it offers. Not only is it an exciting city and a diverse, creative one with good education. But overwhelmingly, Auckland is an attractive and outstanding city to live and work in because it offers a network of harbours, beaches and parks and mild climate supporting an unrivalled outdoor and familycentred lifestyle.

And Auckland business overall is booming. It is generating around 36 per cent of New Zealand’s GDP. With two legs of New Zealand’s threespeed economy showing signs of stalling — the traditional reliance on agriculture, especially dairy exports and signs that the Christchurch rebuild is over its peak — reliance on Auckland to add value to the New Zealand economy in the years ahead will increase.

Yes, from where I sit Auckland provides an exciting, attractive lifestyle. There is nowhere I would rather be. But because what is missing reflects problems of our own making, they are things that only we can fix.

And we owe it to ourselves to do so. ● Michael Barnett is chief executive of the Auckland Chamber of Commerce

D11

Project Auckland

Waking the quiet giant Peter Thompson of Barfoot and Thompson talks to Bill Bennett about changes in Auckland’s housing market

B

arfoot and Thompson managing director Peter Thompson says Auckland’s rapid growth is putting pressure on housing and infrastructure. ”By 2025 one-in-three New Zealanders will call Auckland home.”

The population is expanding faster than officials expected. Thompson says five years ago mayor Len Brown issued figures projecting growth until 2030.

“The actual growth has been ahead of those numbers in every one of the past five years and there’s no indication that it will slow down. Auckland has become an international city; like other international cities it attracts people from elsewhere in the home country and from overseas.

“Net immigration is running a high levels and the city is where most migrants start out. We’ve woken a quiet giant.”

Rapid growth has already changed the property market so much that someone from a generation ago might struggle to recognise the today’s real estate scene. This isn’t just about house prices. Thompson says 25 years ago the most desirable and sought-after property was the family home set on a quarter-acre block.

There are few of these in the city today. Many of the quarter-acre blocks that sold then now house two or three homes.

There are lifestyle changes.

Thompson says in the days of the quarter-acre block, people had time to maintain the property and the grounds. That took time and energy.

Today, thanks to larger mortgages, house owners work extra hours, even take second jobs, to pay for their

People increasingly prefer to live near where they work, preferably within walking distance.

Peter Thompson

homes. The last thing they want is to mow lawns in the few hours they are not working. Nor do most people want to spend hours commuting to distant subdivisions on crowded roads.

“The trend over the last 25 years has seen a shift towards apartments.

In the 1990s a first wave of apartments was built in and around the CBD. They were largely high-rise buildings with small dwellings — mainly one or two bedrooms for renters or for young people starting on the property ladder.

“Now we are seeing the development of low-rise apartment buildings, maybe six floors and they are spreading to the city fringe and beyond. In

some cases, they have more bedrooms and internal space — increasingly they might include an office so that people can work from home.

“There are now developments along the Great North Rd ridge and in transport hubs like New Lynn and Albany with more to follow,” he says.

As well as apartments there are new developments with terraces and other styles of more intensive housing than we have seen in the past.

Thompson says its not just young people and transient renters who are choosing these properties.

“We sell many to first home buyers, but there are now more upmarket complexes with facilities. They may be built above restaurants and shops;

they may have gyms or swimming pools. People increasingly prefer to live near where they work, preferably within walking distance.”

The projects under way in the Wynyard Quarter are typical of this trend. “Auckland Council has been promoting development in the area.

There are plans for a new hotel and arts centres.

“It will be a mix of residential, business and retail along with facilities and open spaces where children will be able to play. It’s going to create an interesting hub and will show what Auckland’s future may look like.”

Though Wynyard Quarter is close to the city centre, that’s not the only place where intensive developments are under way.

“If you go to the large McLennan Park site at Papakura, or Hobsonville, you’ll find developments with a mix of properties for first home buyers as well as more upmarket properties for the better-off. There are new schools and other facilities. This is important, we need to work to build communities with a mix of people. Some good work has been done on community building in the new intensive Talbot Park development at Glenn Innes.”

Thompson says technology is starting to have an impact on the way people view housing. Increasingly people shuttle between working in offices and working from home.

There’s an increasing demand for homes with an extra bedroom that can be used as a home office or even a specially designed work space.

Auckland’s emergence as an international city has seen it flower with more and better entertainment and cultural activities. This along with the

development of other facilities has triggered a secondary housing market trend. Auckland isn’t just attracting new residents; it is making it harder for existing ones to leave.

Thompson says in the past many older homeowners would sell up in the city then move back to their original home regions, perhaps banking the difference in house prices for a retirement nest egg along the way.

“We’re finding that is happening less. More people are choosing to stay in Auckland for longer.

“I’ve noticed some older people have moved away from Auckland, perhaps to a quiet town on the coast, then realise that after the excitement of Auckland it is too sleepy. They miss their flat whites and the city buzz.

“By the time they realise this, it is too late to return to Auckland because price have moved up. My advice for people thinking of such a move is to go and rent first, keep their Auckland property until they are sure they won’t move back.”

The ageing population is another aspect of the same trend. By 2025 more than half of all New Zealanders will be over 45. At the same time, fewer people now choose to retire at 65. They may not work full time, but they will work longer. “We don’t really know yet what this will mean for the property market, but we think it means fewer people will be downsizing and they will put off moving to retirement-style accommodation,” says Thompson. “On the other hand, they could choose to move to apartments. In many cases they will prefer to stay in the suburbs and areas where they already have friends and connections.”

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nzherald.co.nz | The New Zealand Herald | Friday, October 30, 2015

Project Auckland

A course in home economics Forging political consensus on the housing affordability challenge is an elusive task at best, reports Alexander Speirs

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uilding and Housing Minister Nick Smith is adamant the steep increase in section prices over the past two decades, as much as fivefold in Auckland, is the core issue to resolve if young New Zealanders are to have a fair chance at home ownership.

“Every rule that limits lot sizes, designates special character areas, requires minimum balcony apartment sizes or minimum heights and which requires extra design features beyond the Building Act comes at a price.”

But Smith’s prescription does not go far enough for his political opponents.

They say though new housing supply remains the most important factor, there needs to be action on the demand side of the equation.

Among the suggestions is banning foreign investment in existing homes (as Australia does) but allowing it in new homes to increase the overall supply.

Taxes or stamp duties on foreign investment to discourage foreign speculators and land bankers are also suggested.

Labour’s housing spokesman Phil Twyford says Australia’s policies have been successful, channelling $30 billion of offshore investments into new builds — particularly apartments in Sydney and Melbourne — in the past 12 months. By restricting the purchase of existing housing stocks, funds which were previously earmarked to inflate the price of existing supply have instead been used to make a material impact on newly available housing supply.

National’s Nikki Kaye, MP for Central Auckland, reckons the Opposition’s criticism is misplaced: “There are a range of mechanisms we’re pulling — there are tax changes that are being put through, we are poring over Crown land to see what can be freed up there and I think that the new Urban Development Authority in Auckland is going to be a key enabler.”

But, says Kaye, it is naive to think there is a single, silver bullet solution to cooling off demand or addressing housing supply issues in Auckland.

“That’s where the political debate lies — who is able to best demonstrate on the numbers that they can get there. As the MP for Auckland Central, from my perspective while it s clear that there will be some foreign interests coming into the market, they’re not the major issue when it comes to housing affordability.”

“Central and local government are going to have to get much better aligned and that is a strong theme

Phil Goff: In his own words: Labour’s Phil Goff has been tipped to run for the Auckland Mayoralty.

Commission says councils should ● Make greater use of existing tools to fund growth such as targeted rates ● Price infrastructure to recover costs from those who benefit ● Better manage infrastructure and allow growth to occur where spare capacity exists ● Adopt rating systems that encourage the efficient use of land ● Ensure land use restrictions pass robust cost benefit tests ● Ensure CCOs are aligned with plans for growth Government should: ● Remove barriers to the use of charges such as road tolls and congestion charges ● Remove rates exemptions on some Crown-owned land ● Remove barriers to contracting for water services ● Create an inventory of Crownowned land ● Improve the RMA — e.g. limited notification of site-specific plan changes ● Provide greater and betterquality guidance to assist councils with cost benefit analysis within the report. These decisions can’t all be left to local government, we need to be clear where there are ridiculous rules in place, figure out how to tackle them and get to where we need to be as a city.”

The Using Land for Housing report points to “overly restrictive” urban

limits as increasing both land and housing prices. Urban limits can impose restrictions like large minimum lot sizes in rural areas and urban fringe zones, which push out costbenefit tests for developers.

The Greens reckon the solution is to improve densification in existing areas, not to continue to sprawl outwards.

“The report clearly recognises what others have been saying for years, which is that the most affordable and efficient way to solve the Auckland housing crisis is highquality, medium density housing along key bus, train and ferry routes,” says Green MP Julie Anne Genter.

“There is a fantastic opportunity for councils to enable smart, high-quality, medium density housing close to where people work. Central government must also support those changes with much greater investment in frequent buses and trains to create a more affordable and liveable city — which is what Aucklanders clearly want.”

But Twyford says merely improving density regulations is wishful thinking. “There’s no question that given Auckland’s population growth trajectory and given what is currently a structural shortfall in housing — a deficit in the number of dwellings that is getting worse — that it must grow both out and up.”

Funding infrastructure has been a key sticking point in the past for greenfield developments. The report notes that costs associated with urban infrastructure are rising and councils are struggling to adequately finance new sites, particularly with

public backlash against rate-hikes to finance them.

The commission has recommended that councils consider repayment options for development contributions that allow the initial costs to be recovered over a longer period of time.

One method proposed is the introduction of targeted rates to fund infrastructure, which would enable local governments to pay using bond funding accessible through the Local Government Funding Agency. It says that if infrastructure is funded through 30-year local government bonds, development could be paid for over the lifetime of the infrastructure and not tagged on to the price of the house. This finances the infrastructure required at a lower rate, spreads the payments out and ensures contributions are fully recovered.

“If we were to reform the way we re-finance infrastructure, we could make a major difference in just a few steps,” says Twyford.

“When linking a new development to the network at the moment, some of the costs are charged to the developer in levies, but the bulk of it ends up being passed on to the end buyer and tacked on to the price of the house and subsequently the mortgage of that house.

“What that does is pump up the price of the new house and it gets capitalised into the market value of all houses across the market. It’s an incredibly inefficient way to do things, it creates a barrier to home ownership and means infrastructure costs are funded at commercial banking rates on people’s mortgages.”

“House price inflation, unaffordability and demand supply issues have to be addressed collectively — one leads to the other.

“The failure of supply to keep up with demand means that we do have an utterly unacceptable level of house price inflation in Auckland and that in turn creates unaffordability.

“Right now, we’re at the peak of unaffordability — not just for first home buyers — but actually for a whole lot of people in Auckland, which is resulting in declining home ownership.

“Inevitably, with a city the size of Auckland, we are gong to have intensification.

“Maybe in the downtown areas you can build upwards , but most other areas are going to be limited. That means we need to look outside of the central city area too, along those arterial routes and transport hubs.

“Ironically, the major regional development policy that the Government seems to be pursuing is to make Auckland so unaffordable and so congested that people have to look elsewhere to live — but that’s not the best way of dealing with the problem.

“What we have to do is grow upwards and outwards, because excluding either alternative is going to put further pressure on the availability of land, the price of land and the overall cost of housing. Letting the Government intervene isn’t necessarily going to fix this.

“If central government is going to override local government in the area that local government is always most involved; local planning, then don’t stop with the Super City. Just accrue all powers to Wellington.

“I don’t think Wellington always knows what is best for other areas. Wellington perspectives can vary from Auckland perspectives, so you need to be extraordinarily careful in allowing Government to override rather than developing a proper partnership between Central and Local Government.”

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Project Auckland

MPs sceptical on statutory powers

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he most contentious recommendations from the Productivity Commission are around granting new statutory powers for central Government.

In the past, central Government has generally opted not to become directly involved in planning, except in response to emergencies or specific issues. The Productivity Commission’s report explained that may have been to the detriment of New Zealand’s best interests.

“Because decision-making about whether to accommodate growth is made at the local level, this can result in a lower level or a slower pace of growth than would be optimal from the perspective of the national economy.

“The decisions that a city council makes about its growth may be at odds with the interests of central government in increasing the wellbeing of New Zealanders that would arise from a city of a larger size.

“The constitutional and institutional arrangements in New Zealand strengthen the role of local government in the planning and development system relative to other countries. As a result, any misalignment of incentives between local and national interests may be more pronounced in New Zealand than elsewhere.”

The commission proposed new laws in the same vein as the Special Housing Areas legislation; granting new authority, powers and land use rules for local urban development authorities.

For qualifying developments — those “having the potential to deliver significant numbers of dwellings” — a

You have to be really careful about granting new powers.

We always need to take a collaborative approach.

Phil Goff

Nikki Kaye

Many of the councillors lost their bottle in the final stages of the draft plan process.

Phil Twyford

It is really important that the National Government isn’t given more new powers to override local democracy.

Julie Anne Genter

more common and streamlined approach should be made available, including restricting requirements around public notification.

Wider criteria and clearer rules for the use of compulsory acquisition powers were also proposed, with the commission finding that the ability of local authorities at present was both limited and complex.

“The commission’s view is that the activity of locally established UDAs should be supported by the availability of compulsory acquisition powers

in some circumstances, and that such powers are justifiable to overcome holdout problems in urban regeneration given the wider public interest in access to housing.”

Reaction from politicians to being granted new powers to take on a more active role in planning and potentially override local bodies seemed lukewarm however, with a clear preference for finding ways to work together in the first instance.

“My default position is that we always need to take a collaborative

approach, because unless you have all of the politicians on the same page, there’s always going to be a whole lot of local opposition,” explained Nikki Kaye, MP for Central Auckland.

“If you look at where the Government has been successful in special housing areas, it’s been Dr Nick Smith getting in a room with a mayor and the other councillors and determining where it makes sense to work together.

“The reality is that we’re going to have two million people in the city

of Auckland in the not too distant future.

“We can’t have a situation where central and local Government aren’t on the same page regarding where this land needs to be spread out and what the rules for doing it are.

“I don’t care so much what the mechanism is, but ultimately we’ve got to have a united front on bringing up these pieces of land.

“Whether that means more powers, that’s a conversation we still need to have with caucus and cabinet.”

Labour housing spokesperson Phil Twyford said in an ideal world, central government would not have to intervene in local government affairs — but Auckland in particular was leaving them no choice.

“But Auckland Council’s draft Unitary Plan failed to sufficiently move the planning rules. Many of the councillors lost their bottle in the final stages of the draft plan process and were basically rolled by a small number of nimbys.”

Phil Goff, tipped by many to be the next to lead the Super City, was more cautious than his Labour colleague.

“I think you have to be really careful about granting new powers. The Super City was created in Auckland, consisting of a third of the population, with the view of a partnership with Central Government,” said Goff.

Green MP Julie Anne Genter was steadfast in her assertion that central Government not be given increased statutory powers. “It is really important that the National Government isn’t given more new powers to override local democracy like they did in Canterbury after the earthquakes.”

Voice of Auckland business Support the business organisation that advocates for the best platform off which your business can succeed. www.aucklandchamber.co.nz

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nzherald.co.nz | The New Zealand Herald | Friday, October 30, 2015

Project Auckland

Collaboration brings good results Auckland and New Zealand can learn lessons from Britain about managing large urban developments, writes Greg Hall

Power from the roads

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What if the roads we use to navigate our city could at the same time be used to provide it with power?

That’s the sort of technology that has Fulton Hogan’s Robert Jones excited, and it’s easy to see why.

Solaroad is a Netherlands company in the business of what they call “energy harvesting”. The concept is one that converts sunlight on road surface into electricity — an “inexhaustible source of green power”.

It’s done through use of tempered glass panels, covered in non-slip coating and each containing a solar cell. At 1cm thick, the panels are laid on top of a bed of concrete, and combine to make a long energyproducing network.

The implications of the technology are huge: in a world where electric vehicle use is picking up steam, these innovations pave the way for roads

he co-operation and collaboration that went into the Nine Elms London regeneration project can also set the tone for future Auckland development, says Fulton Hogan chief executive, Robert Jones.

He has just returned from a visit to Britain and seeing how they handled their growth and urban development was an eye-opener.

“It was pleasing to see the cooperation and collaboration between the private industry and public sector — both local and national governments,” says Jones.

“They’ve come to realise in the UK that without this sort of collaboration, things can’t get done. Whether it was the Nine Elms Project or the work we saw in Manchester, the fear seemed to have gone out of the private and public sectors working together.

“It was a realisation that both can achieve good outcomes. It’s not all about business making big bucks. It’s how you can leverage off good business practices in the public sector and get some real progress in areas in the country that need regeneration,” he says.

The £15 billion Nine Elms London project was assigned a senior politician – or ``chief unblocker’’ as Jones calls him – to look at the obstacles and decide how the government can help clear the roadblocks.

“There was a recognition from the London borough and the national

It’s not all about business making big bucks. It’s how you can leverage off good business practices in the public sector.

Robert Jones

government that this project was good for the city, good for the economy and therefore we should all get behind it and throw some real political weight behind it,” Jones says.

“There are lessons there for Auckland, Wellington and Christchurch.”

Jones questions why it takes so long for New Zealand to follow overseas innovations. ``Why does it take 15 years for us to catch up?”

He is not only talking about the style of growth management in Britain, but also the technology that is being developed overseas and can greatly assist in making infrastructure development as efficient as possible.

Developments like solar LED lighting meshed with asphalt paving for smart traffic management can help a city get the most out of its infrastructure, says Jones.

“There’s so much noise around how technology is going to change transportation usage and management.

“It’s hard to see what it’s going to look like in five years, let alone 10 or 15 years. It’s moving so fast and we’re struggling with it.”

Nonetheless, he says technology is one area where New Zealand doesn’t need to be the first mover.

“My view is we go and look at what’s being done elsewhere in the world. Let’s not try to be a leader, but let’s be a follower.”

This pragmatic view is based on what Jones sees as a lack of research and development tax breaks in New Zealand.

The Government clearly recognised this problem when it recently announced a plan to double the amount of private sector investment in research and development by 2025. The plan isn’t focused on tax breaks, much to the chagrin of the business community.

Auckland is going through a strong

City Rail Link.

growth spurt with several big development projects coming together at once. Jones says ``unfortunately, we aren’t doing as good a job handling it as our British counterparts.

“What we need to see is more coordination between the agencies on what’s coming to market and when.

This is not well managed at the moment — in fact, in some instances, they’re not even talking to one another.”

New Zealand’s ability to deal with the growth is also being hampered by a shortage of skilled labour, particu-

that charge your vehicles at the same time they’re driving on them.

Another design firm in the Netherlands, Studio Roosegaarde, has partnered with Dutch infrastructure giant Heijmans to pursue similar technology.

They’ve latched on to the idea of car-charging road surfaces, but are looking more broadly. For instance, they’re looking at the use of dynamic paint on the surface of roads which lights up and becomes transparent again depending on surface conditions. The marking will warn users of slippery road surfaces.

In addition, they’ve proposed fitting roads with interactive lighting, which will activate as traffic moves through and then turn itself off when traffic passes. This, the company says, will be a sustainable and cost-saving alternative for road-lighting. larly in Auckland. But Fulton Hogan has mostly escaped this.

“We’re in a better position than most because we’ve got more than 4000 employees around the country in 15 different branches,” says Jones.

“We don’t have the same issues around resources that others do. ``Having said that, for the first time in the last 12 months, we engaged labour from the Philippines down in Christchurch — and there’s no doubt that Christchurch is going to be a draw on the labour in the next few years.”

What is the CRL? The City Rail Link is Auckland’s number one transport priority.

That is good news for our city, which is growing by more than 25,000 people each year. Auckland needs a really good transport system to move people around faster and more easily.

What it means for Aucklanders

The City Rail Link is part of the bigger picture for Auckland. It will shape our city and grow our economy, making Auckland a better place for us all to live.

What are the benefits of the CRL? • More than double the number of trains • The rail network will be able to carry at least 50% more people than today. can go through Britomart Station.

When is the CRL happening?

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• These works will take about three and a half years.

• Early works in the downtown area will start mid 2016.

• The main works from Wyndham St to Mt Eden are forecast to start in 2018.

There’s work to be done, so plan ahead.

There’s a big job ahead in building the CRL and traffic in the central city will be affected so it’s time to think about changing the way you come into the city; take the bus, train or ferry, walk, try carpooling, or get on your bike.

To keep up to date with what’s happening with the CRL build, visit AT.govt.nz/CRL or facebook.com/cityraillink

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• Work starts under Albert Street late 2015.

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• Journey times will be cut by up to half. • More shared space and a peoplefriendly city.

• A train will turn up at most stations • Better connections with buses and every five to ten minutes during ferries. peak hours.

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Project Auckland

Building a new world city

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uckland Council established an ambitious and resourceful 10-year economic development strategy to make the city vibrant, innovative and business friendly, and attract businesses, investors and visitors.

The council’s economic growth agency, Auckland Tourism, Events and Economic Development (Ateed), has set clear goals and pathways to meet the 2012-22 strategy’s targets of increasing regional exports, real GDP and productivity, and enhancing the prosperity of all Aucklanders.

Ateed is focused on creating a culture of innovation and entrepreneurship in the city, attracting talent and building a skilled local workforce, and assisting companies to export more.

For the year ending March 2015, Auckland’s GDP growth increased to 3.7 per cent, driven by strong investment, spending and employment as increased international net migration boosts demand.

Patrick McVeigh, Ateed’s general manager business, innovation and skills, says that through amalgamation, Auckland changed its position globally, becoming increasingly recognised as a “new world city” characterised as mid-sized, high quality of life and offering good educational options and being safe and secure for residents and businesses.

“We are not looking at becoming the next New York, London or San Francisco but we are competing with the likes of Barcelona, Vancouver, Brisbane and San Diego in terms of our offer to residents, visitors and businesses.

“As Auckland continues to grow, we need to have a talent and investment attraction proposition and an outward focus on trade through building two-way relationships and establishing connections. Our quality of life is a key attractor for talent, which will be one of the future determinants of economic success for cities,” says McVeigh.

During its first five years, Ateed has managed the establishment of the GridAKL innovation precinct which now houses 16 fast-growing technology companies in the Wynyard Quarter and is about to open stage two.

GridAKL reached capacity within four months of opening in the Polperro Building in May 2014 and the resident businesses will be moving nearby into the refurbished John Lysaght Building on the corner of Halsey St and Pakenham St West in December.

Polperro will be demolished for apartments, as outlined in the Wynyard Quarter masterplan.

Lysaght almost doubles the space for innovation-based businesses and will provide room for new companies as well as the existing tenants. Ateed is also working with Precinct Properties and Panuku Development Auckland on further expansion of GridAKL, including the development of a new building, called Innovation 5A, in Madden St. McVeigh says the initial plan was to build the brand, identity and community around GridAKL and then unlock the next stages of development as part of the broader Wynyard Quarter regeneration. “We have established a thriving community with GridAKL hosting events, networking functions, start-up weekends and the national Lightning Lab accelerator programme.

GridAKL concentrates on smart, globally-focussed ICT and digital media companies which can attract investors and joint venture partners from overseas. By 2020 the precinct will likely grow to 24,000 sq m of coworking space, incubators and accelerators set in a broader commercial district of 48,000 sq m.

A wide range of technology companies will work closely together

More innovation, skills and trade are the priorities for economic development agency Ateed as it works towards significantly growing the Auckland economy, writes Graham Skellern

The refurbished Lysaght Building will house more innovative ICT and digital businesses in the GridAKL precinct.

Growing the economy Visitor/tourism sector 2015 29.2m $5.31b 15.3m

Visitor nights Visitor spend Number of visitors

2014 27.7m $4.77b 14.6m

2013 26.7m $3.45b 13.7m

2014 $46.3m 298,000

20213 $39.1m 290,000

World class major events Portfolio* return Visitor nights

2015 $73.1m 390,000

*Portfolio included Dick Smith NRL Auckland Nines rugby league, ITM 500 Auckland V8 Supercars, ICC Cricket World Cup 2015, Volvo Ocean Race Stopover, Lantern, Diwali and Pasifika festivals

International education 2015 $1.75b

Value of student spend (Education NZ)

Patrick McVeigh 2014 $1.45b

2013 $1.65b

Innovation and Entrepreneurship Percentage of businesses innovating Tenancies at GridAKL precinct Callaghan innovation R&D grants NZTE Development vouchers Actively managed businesses

2015 75% 15 $3.59m $1.82m 884

2014 n/a 9 $4.66m $1.8m 842

2013 n/a $3.6m $1.72m n/a

R&D grants and Capability vouchers delivered through the Government’s Regional Business Partner Network. Ateed’s business and enterprise team is meeting 100 companies per month; not all businesses get vouchers but are linked to helpful resources and people. The NZTE funding is a set amount.

Attracting business and investment Establishment or expansion of multi-nationals Total GDP contribution of deals* Value of investment deals* *Including screen transactions

2015 2014 6 5 $604m $49m $265m $266m

2013 2 n/a n/a

sharing ideas and solutions. The precinct neighbours will include Microsoft, Vodafone, KPMG, Air New Zealand, Fonterra and Datacom.

McVeigh says supporting innovation-based businesses and industries is core to Auckland’s economic growth. “Characterised by their deep involvement with research and development and STEM (science, technology, engineering, and math), technology-led businesses and industries typically grow faster, export quicker and create higher paid, higher value jobs.”

He says there are 21,000 innovation-based companies in Auckland representing 12 per cent of the business population. They employ 93,000 people, 12 per cent of the Auckland workforce, and contribute $10.5 billion GDP, 13 per cent of the regional economy. Innovation-based businesses produce 8 per cent higher GDP per company and 15 per cent higher productivity than the Auckland average.

Auckland’s future economic success requires the city to provide

opportunities for all its residents. At present there are about 23,000 young Aucklanders (15-24 years) not in employment or training and Ateed is determined to play its part in improving this figure.

Ateed is a partner in the wider council’s Youth Connections programme and is helping to improve access to work by matching young people with employers.

“We have more than 30 businesses signed up for the Youth Employer Pledge partnership and another 30 in the pipeline,” says McVeigh.

“A growing economy needs skills and talent and our young people are a source of future competitive advantage.

“There is a clear willingness of employers to provide these opportunities and it’s also clear that young people are looking for work. Together with Youth Connections and our local boards, we have run two Job Fests in the last 12 months that saw registrations from 5000 young people and 100 employers.”

McVeigh says there is a global war for talented workers, particularly in technology, and Ateed’s skills and employment programme is focused on developing a pipeline of local talent for future workforce needs and addressing the current shortfall.

He says there is a shortage of workers in the ICT and technology, tourism and hospitality, construction and engineering, and food and beverage (technologists).

“We have partnered with central government and its agencies in raising the profile of Auckland as a place for talent to live and work — both digitally (Innovation Island’s campaign) and through in-market activities in the UK and Australia.

“Auckland is the first region to sign a formal partnership agreement with Immigration New Zealand, which commits us to working together to attract more skilled talent and investment into Auckland,” McVeigh says.

Ateed is also focused on building the capability of businesses and setting them on a journey to exporting.

Ateed is part of the Government’s Regional Business Partner Network and has facilitated nearly $12 million worth of Callaghan Innovation research and development grants and more than $5 million worth of NZTE capability development vouchers over the past three financial years.

The FoodBowl, a state-of-the-art processing plant near the Auckland airport and jointly owned by Ateed and Callaghan Innovation, offers food and beverage firms the opportunity to trial advanced processing techniques and produce new products for exporting and diversification.

The Tripartite Economic Alliance between Auckland, Guangzhou and Los Angeles has given local companies a unique opportunity to build relationships and develop easier access to the lucrative Chinese and United States markets for their goods and services.

Ateed has forged a new relationship with Guangzhou-based incubator InnoHub, paving the way for a $20m investment in Auckland companies and giving them greater exposure in the Asia and Pacific Rim markets.

“All these avenues lead to Auckland having a more export-oriented economy,” says McVeigh. “We are not going to get rich selling to ourselves and we need to be globally focused.

We need to leverage the trade agreements and access new markets, building effective two-way trading relationships.

“The advanced industries where the innovation is taking place — such as ICT, screen and digital, food and beverage, high-value manufacturing, biotechnology and health technology — provide the best opportunity to increase exports and add value to the regional economy,” he says.

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nzherald.co.nz | The New Zealand Herald | Friday, October 30, 2015

Project Auckland

New model will bust congestion Lester Levy reflects on five years of the new Auckland, and transport in particular

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onfronting reality is essential in maintaining a forwardlooking, strategic approach to meet the Auckland challenges in front of us. Five years into the Super City, many large projects and initiatives which languished have now been delivered or are well under way.

Projects of international scale and complexity, such as the introduction of a new public transport ticketing system (AT HOP) and the new electric trains with their associated infrastructure, have been delivered and are already revealing their worth through record patronage on trains, buses and ferries.

It is important to clarify that it is not all about public transport. It has been said that Auckland Transport has placed too high a priority on public transport in recent times.

The reality is that as a board and organisation, Auckland Transport is agnostic about the mode of transport solution and exclusively places the emphasis and priority on the most evidence informed solutions to Auckland’s number one issue — which is congestion.

Five years ago the incredible rate of population growth that Auckland is now experiencing was not anticipated. In this context, Auckland Transport’s role is to completely remodel an historically under-invested transport system during this time of unprecedented growth, which will take time, sustained investment, and bold and very committed leadership.

In many ways Auckland has become a victim of its own success with its growth fuelled by the desire of people to live and invest in the most prosperous region in the country.

We have to acknowledge that real and substantive change will not happen without some degree of individual inconvenience and sometimes even downright disappointment.

One of the world’s leading transport experts, Jarrett Walker, clarifies that bold initiatives require courage and commitment. We must strongly resist the urge to change our approach whenever there is any element of public disquiet about rational and legitimate change in order to facilitate essential transport solutions.

A current example is the removal of on-road car parking in order to introduce new bus lanes to expedite bus transit times. This in no way means ignoring genuine complaints or criticism, but the fact is we cannot please all of the people all of the time because what is in the greater public interest is not going to be in everyone’s personal interest. As Walker says: “Too often we defer to a small group of intensely interested people and as a result, we sometimes end up with transit investments that don’t really do what we expect or that have bad side effects that should have been foreseen.”

Turning our attention to transformational shifts, which will ensure that Auckland’s prosperity continues, we need to look at ourselves in a global context. London and Paris are dedi-

cating budgets to their metro systems (public transport) that exceed Auckland’s entire GDP. Although the scale of investment in Auckland is not at that level, Auckland and New Zealand ratepayers are already making significant (and greatly appreciated) funding available to assist in completing transport projects which will ultimately address unacceptable levels of congestion in Auckland.

Over the next 12 to 18 months, the Government, Auckland Council, New Zealand Transport Agency (NZTA) and Auckland Transport are working on the Auckland Transport Alignment Project, which for the first time will set in place an agreed long-term programme for the development of transport in the city.

This alignment is critical if we are to keep ahead of the growth curve that has the potential to hold the region back in so many ways. This

approach will be a test of how intelligently we can accelerate improvements in an environment of both constrained resources and a rapidly increasing population.

Alignment goes beyond simply agreeing a long-term plan for transport in Auckland. It requires a mindset of placing reliance on evidence over rhetoric, confronting reality about how transformational transport infrastructure will be funded and, perhaps more than anything, be resolved.

As the alignment project unfolds, Auckland Transport continues to work with the NZTA on projects to join up disparate sections of the strategic road network, such as linking the Northwestern and Northern Motorways at Constellation Drive, improving access to Auckland Airport, AMETI and the East-West connection.

These are examples of an overall

network solution approach for all modes rather than just having a collection of projects that are planned and delivered separately.

The next generation of major projects being planned or under way (City Rail Link, a connected cycle network, more frequent bus services, light rail, integrated ticketing and major roading projects such as Albany Highway and AMETI) will be critical.

They will help Auckland lift its game and overcome its growing pains to meet employment demand, retain talent, support urban development, enable freight and distribution competitiveness, and quite simply enhance Auckland as a great place to work and live.

Today we stand at the cusp of a transport revolution, similar to that at the beginning of the 20th Century when tar sealed roads, the motor vehicle and electricity became part of everyday life.

We are on the threshold of another technology-led revolution — a switch to alternative fuels, large-scale car sharing schemes and the application of advanced intelligent transport systems including autonomous vehicles.

All of our planning needs to be undertaken with a close eye on how Auckland can adopt these exciting disruptive transport innovations.

In concluding, I would like to acknowledge our partners and key stakeholders in the transport system, in particular the Government, NZTA and Auckland Council who work closely with us on prioritising and funding the work that needs to be done if Auckland is to truly be a city on the move. ● Dr Lester Levy is the Chairman of Auckland Transport

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D17

Project Auckland

Redevelopment on its way

W

ith the Wynyard Quarter regeneration well under way, the recentlyformed Panuku Development Auckland is setting its sights on a new urban redevelopment project.

Possible locations for redevelopment include Manukau, Otahuhu, Onehunga, Newmarket, Northcote, Takapuna, Mt Eden Station, Avondale and Henderson.

The shortlist of the nine locations for Panuku to consider transforming was presented to Auckland Council’s development committee by the Urban Location Analysis Project team.

Panuku chief executive John Dalzell says the shortlisting process is comprehensive. “There’s quite a lot of preparatory work for understanding each of the locations — what work has been done, where the engagement with the community is at, understanding what the community wants, and then looking at how we can get a bit creative with everything.

“One of the things we’ve really focused on is understanding where the market is at these locations and to what extent there might be some landholdings of a contiguous nature, either held by council or someone else.

“It’s when we focus on the ‘someone else’ that we start to think about the concept of alliances,” he says. “We ask: how can we create those partnerships or alliances to actually make sure that we can fully optimise everything that is available to us in selecting those locations.”

Panuku was formed early last month through the merger of two council controlled organisations, Waterfront Auckland and Auckland Council Property Limited.

The name Panuku means “move

Greg Hall talks to chief executive John Dalzell about how the new Panuku Development Auckland organisation will move forward

on” or “move forward”, which provides a very clear focus for the new organisation. Panuku will work with iwi, central government and both the not-for-profit and the private sectors to leverage council land and give the growing Auckland region some exciting projects.

Dalzell says Panuku has structured its operations into three categories: Support, Unlock and Transform.

“Within these three categories, what we’re really looking to do is truly unlock the potential of urban regeneration,” he says. “We’re taking a very strategic approach in terms of how

we build up value out of not only the existing council assets that we’ve got responsibility for, but using those three different categories to help identify opportunities for development.”

The Support arm involves working with organisations such as local boards to help guide them in achieving the goals set by the 30-year Auckland Plan — such as urban intensification.

The Unlock arm will help create development opportunities for third parties, as well as for council. Panuku sees its role as a facilitator, using its

relationships to help remove obstacles and make things move more smoothly. The development work done in Hobsonville Point is an example of this approach.

The meat of Panuku’s efforts is the Transform arm, looking for the next Wynyard Quarter and waterfront projects.

The organisation’s Type 1 redevelopment programme focuses on the large-scale, long-term residential and commercial developments that deliver one specific goal in the Auckland Plan: the radical improvement of urban living quality.

Panuku is all about moving forward. But reflecting on the first five years of the Super City, Dalzell says: “I think I’d characterise the last five years as being pleasantly surprised.

It’s definitely a much better operating environment than what existed in the past — one of the most defining things is the way the chief executives now work together.

“There still may be little things we can do to improve the operating environment, but we should pause for a little bit just to think about us having come a long way,” he says.

As for the future, Dalzell has some stern words for Auckland city.

“We shouldn’t be afraid to actually tackle head on some of the big issues,” he says.

“The success of the next three to five years will be defined on how effectively — collectively — all of us approach these issues, and whether we are prepared to change. To change people we are going to have to find a common ground.”

Panuku rates highly on sustainability Panuku Development Auckland is getting high praise for its approach to sustainable infrastructure development.

Panuku’s work on Wynyard Quarter’s Madden and Pakenham West Rd upgrade earned an “Excellent” rating under the Infrastructure Sustainability Council of Australia’s rating scheme, including a perfect score in the Urban and Landscape Design theme.

The development team’s focus on connecting continuous and active waterfront precincts, establishing diverse public spaces, creating an appropriate building height, scale and form, and promoting sustainable transport and urbanism all contributed to the top marks.

On top of that, the project managed to reduce their construction carbon emissions by 27 per cent and their materials environmental footprint by 18 per cent.

Panuku’s interim chief executive John Dalzell says “the value to the organisation has been in having an independent body scrutinise how Panuku is delivering on its sustainability commitments. We believe we have set the benchmark for other New Zealand organisations to step up to.”

The Infrastructure Sustainability Council of Australia’s rating scheme, launched in 2012, rates the sustainability performance of infrastructure assets across the planning, design, construction and operation phases of development.

Holistic approach to unlocking urban potential Working together will achieve quicker results, says Bill Loutit

Auckland is on the verge of progressing a number of major urban transformation and infrastructure projects.

However, unlocking the potential of these projects requires a holistic approach.

The key is for Auckland Council, Council Controlled Organisations (CCOs), Government, community and business to work together. If this can be done results can be achieved quickly and without increasing council debt.

An understanding of the available levers is crucial Every urban transformation or infrastructure project will involve most if not all of the elements shown in the diagram.

The trick is to understand early in the project which of these elements, or levers, apply and also what the relevant parties might need.

For example, only the council can acquire land or close a road. But doing so may be hugely beneficial to a private sector developer. So land acquisition or road closure could help provide for more development potential and, therefore, lead to further private investment.

The multi-faceted nature of major projects readily provide for these types of scenarios which can in turn encourage private investment.

A new approach can have major benefits We are on the cusp of making this happen because of the positive and

collaborative approach the council and its CCOs are adopting.

Coupled with the creation of Panuku Development Auckland, the new CCO, Auckland has a huge opportunity to take projects forward with a combination of Council and private money. And the opportunities are numerous when projects are viewed in this way. The City Rail Link

Local government Act Roads Decision-making of AC/CCOs Development contributions Annual plan/ LTP/RLTP

can be partially funded by development above train stations and the route itself. Communities can be transformed, as in Panmure and Glen Innes through the Tamaki Redevelopment Company.

The Tamaki Redevelopment Company is a great example of a partnership between national and local government. This will ultimately

Finance Utilise existing relationships Utilise council’s balance sheet Fund with development contributions Agree Concessions

lead to a much more efficient use of under-utilised government social housing with significant private investment. Developments of this type can pay for their own infrastructure and provide affordable social housing.

And, with greater local support, developments like Fletchers Living's community at Three Kings could be

Commercial Documents

Reserves Act

Relationship

Process for land swap Transfer Reserve Status Revoke reserve status

CCOs Business community Government

RMA Designation Resource consents Esplanade reserves Planning documents

Urban renewal/ Infrastructure Objective: faster and with no increase in ratepayer debt

The trick is to understand early in the project which of these elements, or levers, apply.

Bill Loutit

Property Titles Ownership structures Covenants

Public works act

Procurement entity

Section 40 Ongoing public works requirements

PPP / traditional contract

providing much needed housing for Auckland much sooner.

A shift in mindset is needed To take advantage of these opportunities a shift in mindset is needed to map out projects and understand the levers that can be applied to achieve what Auckland needs.

There needs to be political support and co-operation at both the local and national level. Once this is made clear community and business will see the door is open and embrace the opportunities.

We are close but we need to work harder to make it happen. ● Bill Loutit is Head of Resources & Infrastructure, Simpson Grierson

D18

nzherald.co.nz | The New Zealand Herald | Friday, October 30, 2015

Project Auckland

The benefits of going local “T

he way this country is run is broken”, the cabinet minister said in his speech. “It is high time we faced the facts. People feel remote from the decisions that affect them. Cities are held back. There is no incentive to promote local enterprise. It’s time we fixed it.”

If only these words had been spoken in a New Zealand context.

However, they were uttered by George Osborne, the British Chancellor of the Exchequer. Osborne recently unveiled his localism agenda to the Tory party’s conference in Manchester.

Britain’s system of government is highly centralised. So is New Zealand’s. Local governments, both here and in the UK, have little flexibility to control their own affairs. Osborne, in favour of greater localism, is promoting a radical departure from this.

Greater devolution of decisionmaking from central to local government is a bold step — and New Zealand should consider doing the same.

Imagine if New Zealand’s regions had the ability to create specific solutions for their specific needs.

Imagine if Auckland Council were able set itself up as a special economic zone for testing tailored policy changes that could help solve its unique problems.

It is a fresh and innovative suggestion for routing around policy reforms that are otherwise trapped in a political impasse.

And it is something The New Zealand Initiative has just proposed in our new report In the Zone: Creating a toolbox for regional prosperity.

Devolution and subsidiarity are a

Khyaati Acharya and Oliver Hartwich say devolving decision-making will mean more effective policies for Auckland common sense approach to policymaking. Though regional diversity is well-recognised, the Beehive is still too focused on a one-size-fits-all policy for the whole country. But the result is lukewarm policy, which may suit the needs of a few regions, while avoiding complaints from any of them. It is a system where decisionmaking is far removed from those most affected.

How effective can policy be if it is meant to cater for the needs of both rural and urban regions, of both growing and shrinking towns, and of both services hubs and primary sector centres?

The opportunities for an Auckland-wide special economic zone are huge. A good start could involve piloting policy reforms aimed at tackling Auckland’s housing market.

Restricting them to the Auckland region provides an efficient and much less risky solution to a major problem.

The Resource Management Act (RMA) is often cited as major obstacle to housing affordability. It is also a piece of national legislation that is political dynamite. The Government is too risk-averse to touch it in a comprehensive way, save for superficial tinkering. It currently does not have a majority for any radical reforms either.

But red tape and poor policy play major roles in determining house prices. Regulation makes it difficult to release land for development. It also dictates what you can and cannot build on a particular pieces of land.

An Auckland-wide special economic zone could test-bed changes to the RMA. These changes could involve clarifying the importance of housing and urban environments. Auckland could pilot RMAreforms aimed at releasing more land for building more residential properties.

Another suggestion is to experiment with particular changes to the Overseas Investment Act (OIA). In their recent report Using Land for Housing, the Productivity Commission argues the Act is far too costly and time-consuming for foreign investors who want to buy land for building residential properties.

Why not trial a more liberal reform of the OIA within Auckland? Reform the Act to make it easier for foreign investors to purchase land specifically for the purposes of building more houses. It makes no sense to put investors through a regulatory nightmare when they are trying to ease some of the pressure in the housing market.

But it is not just the lack of regionalspecific policy that is a problem.

Giving more responsibility to local councils and encouraging them to make smart decisions also requires better incentives. Ensuring a special economic zone in Auckland is successful needs much better co-ordination between policy objectives and fiscal incentives.

One way of doing this is to improve revenue-sharing between local councils and central government.

This way, if you grow your region’s economy, you will also grow your revenue.

For example, Auckland council might receive a Housing Encouragement Grant for each new house built within the area. This would encourage more residential construction. It would also entice Auckland Council to reduce consenting time and other bureaucratic delays.

The grants would be a straightforward calculation, based on the GST generated by housing construction and sale.

Local government might also get a share of increased revenue created by general extra growth. Ensuring that Auckland Council receives some stake in growth more strongly encourages Auckland to pursue progrowth policies.

For example, Auckland contributed $21.7 billion in taxes to central government in 2014. Suppose Auck-

land experienced an additional 1 per cent growth in economic activity, leading to an increased tax-take worth $217 million. Shared equally between local and central government, $108 million may be small relative to the national budget, but it is a considerable figure for Auckland Council.

This extra revenue could be put towards providing more infrastructure for residential developments. It might also encourage Auckland Council to zone more appropriate areas of residential, retail and industrial space.

These are, of course, just a few suggestions. But the possibilities are huge. Auckland could benefit greatly from being set up as a special economic zone for piloting policy changes. Devolving more power to our local councils and giving them a greater say in setting the right solutions to their problems, could unleash major growth. Devolving more money to local councils gives them a real incentive to make smarter decisions.

It is high time we brought policymaking closer to local communities.

Let’s follow the British example and end the love affair with centralised control. Let’s allow local councils to take charge of their own matters.

Abraham Lincoln once said that government should be “of the people, by the people, for the people”. It should also be much closer to the people. ● Khyaati Acharya is a research assistant and the co-author (with Eric Crampton) of In the Zone. Dr Oliver Hartwich is the Executive Director of The New Zealand Initiative.

We’ve got a heart for business.

Championing a successful city centre hotcity.co.nz

D19

Project Auckland

Putting heart into the city Bill Bennett talks to Wellingtonian-turned-Auckland advocate Viv Beck

V

iv Beck still remembers a time when out-of-town visitors to Auckland would struggle to find anything open in the city centre outside normal business hours. That has changed. Today there is always something going on. The city is busy from breakfast until the small hours and all through the weekend.

Now, as chief executive of Heart of the City, Beck’s job is to maintain the momentum. The goal is for a vibrant, exciting centre that visitors and residents expect to find in an international city. She says 24-hour operation is one of the marks of a city on the international map.

Change has been in the air for a generation. Beck says the turning point for her was the 2011 Rugby World Cup. At the time she was working in Wellington and was surprised by the exuberance she found when visiting Auckland. “There was an incredible sense of involvement.

It wasn’t just the tourists in town for the Cup, the locals embraced the event. Everywhere you looked there were flags, not just our flag, but the flags of other nations taking part.

There were people everywhere and something going on all the time.”

Beck singles out the Fan Walk which stretched from Queen St through Myers Park all the way to Eden Park as an example of how the event breathed life into the city.

“It’s been four years since then and what has happened since is incredible. That was the first time Auckland emerged as an international city. It showed the world it had its own attitude and culture.

“That’s important. Being distinct is critical. Most big cities offer the same set of things: they all have shops, hospitality, parks, cultural and sporting venues. What sets one apart from another is the feeling visitors get when they are there. Cities need a heart; they need to touch people’s emotions. That’s what they remember after they leave. Our job is to galvanise that experience,” she says.

Heart of the City is the business association for the central part of Auckland. Beck says her patch is essentially the area between Albert Park and Victoria Park, the harbour and Mayoral Drive. It’s a small area, but the most densely built-up space in New Zealand.

It contains about 10,000 businesses and there are 1200 property owners. Many, but not all, are members of the organisation and the goal is make sure the city centre remains successful. “We aim to create a place

Marketing & Events Restaurant Month (August) ArtWeek in the City (October) Christmas in the City (November/December) 10 Days of Fashion in the City (Feb/March) Heart of the City’s Viv Beck says it is important for Auckland to retain a distinct character..

people want to come to. The business they bring drives economic growth, that’s good for the city, good for the region and good for New Zealand.

After all this part of Auckland is a shop window for the entire country.”

This shop window is most apparent when cruise liners are in town. For many cruise tourists, the heart of Auckland city is their first taste of New Zealand. Beck says cruise activity in town has grown fast. That wouldn’t have happened if people

coming her on previous cruises didn’t have a positive experience.

Much of the organisation’s work revolves around marketing and events. These days that means using social media tools like Facebook.

Beck says Heart of the City Facebook page is popular with users. There’s also a phone app people can use to find out what’s going on in the city.

Though the area is small it contains a number of distinct areas or precincts. Queen St and High St are

mainly shops. There are areas with entertainment and restaurants. Aotea Square is one cultural hub, there’s another around the City Art Gallery.

Heart of the City is also involved in transformational projects designed to build on this. The idea is to create stronger places with a clear identity.

Visible examples are St Patrick’s Square, Fort St and O’Connell St. Change is a constant feature of any vibrant city centre. Auckland is about to go through one of its biggest changes in a generation with the City Rail Link. Beck welcomes the development; she says rail plays a crucial role bringing people into the city centre.

“All the world’s great cities depend on public transport. We know the growth of public transport will help business grow here. People’s behaviour changes when they have the services that suit them.”

However, the building work is likely to be disruptive. Heart of the City will work to communicate what this will mean for members so they can plan for road closures and other disturbances. There’s a need to provide feedback to minimise the effect on businesses. Beck points out there is a macro-picture and a micropicture: “We need to balance what

On the up — city centre facts and figures ● Pedestrian numbers: Foot traffic is a measure of growth in a city centre. Heart of the City has a programme counting traffic at 18 sites. Foot traffic continues to grow year-on-year across the city centre. ● Spending: Spending in the city continues to increase — at the end of September 2015, it was up 8.9 per cent on last year. (Source: MarketView) ● Vacancies: Vacancy rates for commercial and retail space are low. Demand outstrips supply for retail space in the core of the city centre and this is driving new developments.

Prime office vacancy rate is 0.7 per cent down from 2.5 per cent last year.

Retail vacancy rate is 2.5 per cent, this compares with a 20-year average of 4.8 per cent (Source: Colliers International 2015) ● Destination marketing: 1.5 million website visits for the year ending 30 June 2015, up 22 per cent on the previous year. 120,000 Facebook fans, with engagement from 65,000 fans each month. happens now with what’s going to happen in the future. Success will depend on all parties working together”.

Heart of the City plays a role influencing projects funded by the City Centre Targeted Rate, which are transforming the city physically.

There has been significant private investment in the city centre and growth and investment are set to continue. This includes a growing retail offering, new commercial developments, and a wide range of restaurants, events, arts and cultural experiences.

Heart of the City also has relationships with central and local government including Auckland Council, Auckland Transport and the Police, and strategic partnerships for destination marketing with Ateed, NZME, Regional Facilities Auckland, SkyCity, Britomart, Panuku Development Auckland and City Works Depot.

There are strong ties with developers, real estate, security and wellbeing.

Collaboration is important. For example, Heart of the City, along with others, advocated strongly for a longterm port study that takes account of the economic, social, environmental and other impacts of expansion into the Waitemata Harbour.

D20

nzherald.co.nz | The New Zealand Herald | Friday, October 30, 2015

Project Auckland

What now for Wynyard?

Clockwise from far left: 132 Halsey South End (Athfield Architects); 132 Halsey exterior (Athfield Architects); 5a north (Warren & Mahoney); Artisan Lane (Architectus); Wynyard Central (Architectus); Mason Bros (Warren & Mahoney).

SHAPING SPACES FOR AUCKLANDERS TO LOVE

Auckland is growing, and we need to be smart with the space we have.

Panuku Development Auckland has been established to help redevelop parts of our city - and shape spaces for Aucklanders to love. Our name, ‘Panuku’, means ‘to move forward’ and that’s exactly what we’re helping Auckland do.

From small projects that refresh a site or building, to major transformations of town centres or neighbourhoods, we’re working to improve the quality of urban living throughout our city.

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panuku.co.nz