Lifestyle Subdivision - Projects
“We were told we could not subdivide – Surveying Services helped us get it done and saved us a lot of money”
Steve and Kirstie Magowan, Te Puna
The Background -
Steve and Kirstie Magowan have a 2.4 hectare lifestyle avocado orchard in the Te Puna Lifestyle Zone. The property had direct access to State Highway 2, a common feature along the highway west of Tauranga. The bottom area of the property was a small ‘frost pocket’ resulting in low avocado productivity. The original idea was to subdivide off a few rural lifestyle lots, for a higher value end use and to release capital from this poor producing area of the property. An approach was made to another surveyor. The response – it cannot be done, as the Magowan property is within the affected area of the proposed upgrade of the Tauranga to Waihi road Corridor, the Tauranga Northern Link project.
A few months later, following an advertisement promoting Surveying Services the ‘rural subdivision experts’, Steve made the call to their office. Within a few hours Brent Trail, the Managing Director, was on the phone offering to come out and listen to Steve and Kirstie about the challenges facing their subdivision project. That initial meeting was the beginning of the Magowan / Surveying Services story …
Timeline and Results …
- Stage One - Research, November 2015
- Stage Two - Agreed approach, April 2016
- Stage Three - 2 Lot Subdivision Resource Consent granted August 2016
- Stage Four - 12 Lot Subdivision Resource Consent granted May 2018
- Purchase of 5 hectare NZTA block completed - July 2018
- 12 Rural Lifestyle blocks marketed by Bayley’s
State Highway 2 west of Tauranga is known locally as the killer highway! One cause of the high traffic accidents is direct driveway access to a very busy road. Planning is underway for a major upgrade to the Tauranga to Waihi Corridor - the Tauranga Northern Link (TNL). In recent years, one response by New Zealand Transport Agency (NZTA), to manage highway risk, was to be very tough on subdivisions adding any more access to SH2. The Magowan property is affected by this NZTA project. It lies close to the proposed Minden Interchange and has had land taken for construction. In addition, revisions to the Western Bay of Plenty District Plan placed a limit on the number of additional lots (sections) able to be established prior to construction of the TNL. Each road intersection was allowed a limited number of additional lots. Also, the rezoning required each subdivider to purchase Transferrable Development Rights [TDRs] based on one for each new lot created.
Stage One – Challenges, Strategy and Results
There were four parties: Western Bay District Council, NZ Transport Agency, Bay of Plenty Regional Council and the Magowans represented by Surveying Services. Confidentiality between the parties was essential as the negotiations unfolded. By being experts in the local subdivision market and given the latitude to execute the strategy, Brent Trail was able to help the Magowans navigate what can be a regulatory nightmare. Examples of negotiating strategies are:
- It was clear from the outset that NZTA would restrict the number of sections accessing the highway, and there was no alternative access. Originally several lots were applied for but that number was traded off in the process to win concessions and a consent eventually for two new lots. A minimum of two lots was the end game and had to be agreed before significant investment was made.
- There were a low number of lots available in the area under the District Plan. As such, a lot allocation negotiation was successfully completed by Brent Trail prior to the Magowan’s spending large sums on the application process – the Magowans knew they were going to get their lots from the pool before proceeding further!
- Council agreed to accept the application whilst negotiations were completed with NZTA and other required information was finalised.
- The District Plan had a ‘Structure Plan Road’ in the area of the 2-lot subdivision. The Structure Plan Road was to provide Minden Interchange access to the rural properties on the south side of SH2 including the Magowan property. Negotiations provided a gifting of 2,290 square metres of land from the Magowans for that future vehicle and walking access – a concession to make the overall plan work. As a result, Council agreed to requiring only one Transferable Development Right for the 2-lot subdivision instead of two, saving thousands of dollars.
- Another concession from NZTA and Council was achieved: ‘No required upgrade to the right-of-way from SH2 to the new lots’. It was agreed that this was only temporary access until the Structure Plan Road was constructed – again a significant cost saving.
Stage Two – Challenges, Strategy and Results
The next Stage was a 12-lot subdivision of 5 hectares on adjacent surplus land purchased from NZTA. Examples of negotiating strategies and outcomes are:
- The Magowans were negotiating the purchase of the land from NZTA to convert the land from kiwifruit to an avocado orchard. The Structure Plan Road inconveniently cut the property into two. The idea of the “buy and subdivide” was devised early in the process by Brent Trail as he learned of the NZTA land purchase negotiation.
- Realising the Structure Plan Road for NZTA and Council was a key negotiating lever to capture the value created through the subdivision process. Surveying Services attended meetings with both NZTA and Western Bay Council, coordinated Structure Plan Road design and managed geotechnical, contamination reporting and other risks on behalf of the Magowans.
- An application was made very early in the process [mid-2016] in order to secure a further 12 lots from the then dwindling pool of future sections allocated to this area, leaving only two available. To manage the risk of losing the allocation, care was taken to steadily keep the subdivision application progressing with Council as the purchase negotiations were completed with NZTA.
- The required Contamination Assessment was completed in the most cost-effective way possible, avoiding and eventually excluding from the subdivision some of the land likely to cause issues. This strategy may have saved the Magowans many thousands of dollars on the next Stage of the project.
- As a concession, the Magowans took on the cost of the Structure Plan Road design and Surveying Services managed that process. Once again, it was a negotiation on grades, location and Transferable Development Rights credits. Two additional credits were negotiated, again saving tens of thousands of dollars.
- Throughout the process confidentiality was essential. The Stage Two process took over two years to complete, due to the extended ‘on again off again’ negotiations with NZTA to purchase the land. The end result was a non-notified application without formal neighbour’s consent for the subdivision – both contributing to considerable savings in terms of costs and risks to the process.
This is where it all ends up – sell 12 lots and we have a very successful project!