FITZROY GOLF CLUB AND SURROUNDS - TECHNICAL REPORT OVERVIEW
ON THE PROCESS FOR REVOCATION AND DISPOSAL OF PUBLIC RESERVE
LEASED BY THE COUNCIL TO THE FITZROY GOLF CLUB INCORPORATED
A. PURPOSE
The purpose of this report is to outline the process for the revocation of the reserve
reservation over public recreation reserve for disposal which is leased by the Council to
the Fitzroy Golf Club, to provide facts on the potential for the sale of that land (or part /
revenue, for consideration as part of the Council’s current 2012 Activity Review.
B. DETAIL OF FITZROY GOLF CLUB LEASE
1. Lease
Original unregistered Lease dated 14 June 1983 (for a term of 21 years from 1 July
1981 expired 30/6/2002) with a conditional right of renewal for a further term of 21
years at annual fixed rental of $2,400.
Lease renewed for another 21 year term by Deed of Variation in 2002, subject to new
rental, and obligations relating to health and safety duties under the Health and Safety
in Employment Act 1992 and 1995 Regulations, but otherwise on existing terms in
original lease.
2. Authority
Issued pursuant to the provisions of Section 54(1) of the Reserves Act 1977 (subject
to ministerial consent). Should also include the First Schedule to the Act.
3. Lessor:
New Plymouth District Council as the body corporate under the Local Government
Act 1974 (Note that this should be more correctly recited as the Council as the
administering body under the Reserves Act 1977).
4. Lessee:
The Fitzroy Golf Club Incorporated (an incorporated Society).
5. Current Lease Term
21 years from 1 July 2002. Expires 30 June 2023.
6. Conditional Right of the Club to a Renewal Lease.
Clause 24 provides that if the Council is satisfied that there is sufficient need for the
continued operation of the Fitzroy Golf Club then the Club shall have the right or
option (to be exercised in writing to the Council ) to give at least six months’ notice
prior to the expiration of the term of the lease to take and accept renewal of the term
created for the renewal period from the expiration of the term created at a rental to be
agreed upon and failing agreement to be determined by a single arbitrator or in the
case the parties cannot agree upon the appointment of such an arbitrator, then by two
arbitrators one to be appointed by each party and an umpire selected by the two
arbitrators, provided the rental shall not be less than the rental pertaining immediately
prior to expiry of the said term, otherwise upon and subject to the same conditions as
are herein contained excepting the present right of renewal.
Document name: Review of Revocation and Disposal Process of Recreation Reserve - Fitzroy Golf Club
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Document Number: 1366252
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7. Annual Rental from Term commencement 1 July 2002
Rental set at beginning of the term $7,500 plus GST. Current Rent is $8,293 plus
GST.
8. Rental Reviews
Clause 21 provides for rental reviews based on the aggregated Consumer Price Index
movement that has taken place over the three year period immediately preceding the
review date.
9. Purpose of Lease
The lease requires the land to be used as a golf course for the playing of golf and the
buildings thereon will be used as club rooms in connection therewith.
10. Rates
Clause 20 provides for the Club to pay rates levied. However a note on files indicates
that the Cub will not be charged rates on the land.
11. Buildings and Structures on the Land
Clause 7 provides that the Club remove buildings or structures on the land if required
by the Council three calendar months from the date expiration or determination of the
lease, but that if such removal is not affected within the specified date, the buildings
and structures erected by the Club shall become absolute property of the Council.
Clause 8 provides that the Club shall not demolish or remove the original Club house
or any other buildings erected or alter or make additions or erect new buildings or
structures without the prior consent of the Council.
Clause 25 provides that the Club will not be entitled to compensation for any
improvements effected by it, unless the Council exercises its discretion and decides to
pay the Club the value of such improvements.
12. Other Conditions
Clause 11 - Club not to carry out acts which may cause sand drift or remove lupin on
the foreshore without prior written consent of the Council.
Clause 27 provides for dispute arbitration under the Arbitration Act.
13. Limited Condition on Council Resumption of the Leased Land
Clause 22 provides that upon reasonable notice being given, the Council shall be
entitled to resume possession of part or parts of the land along the foreshore during
the term without payment of any kind and without reduction of rental provided
however that the Council shall not resume possession of any part or parts where such
resumption will affect the greens or fairways or the efficient operation of the said land
as a golf course.
Document name: Review of Revocation and Disposal Process of Recreation Reserve - Fitzroy Golf Club
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14. Schedule of Land listed in lease
(Note No Area specified in lease - not separately surveyed)
Legal
Full
Computer
Status
Underlying
Remarks
Description
Title
Freehold
Reversionary
Area -
Register
Reserve Title
not lease
Ownership *
area
Lots 1 to 11 DP
2.4838
TN160/110
Recreation
NPDC
Classified for recreation
1910
Reserve
reserve purposes by NZ
Gazette 1989 page 868
Lots 16 and 17
0.4250
52/21 (now
Recreation
NPDC
Declared recreation Reserve
DP 1910
TNH3/1208)
Reserve
and deemed Classified for
that purpose by NZ Gazette
1989 page 868
Lots 5 and 6 DP
0.1610
TN 160/34
Primarily
NPDC
No record of classification of
6496
pleasure
this reserve for recreation
ground and
reserve purposes
secondly for
recreation
ground
Lot D, DP 1100
2.6165
90/154
Recreation
NPDC
Classified for recreation
Reserve
Reserve by NZ Gazette 2011
forming part
page 4243
of Peringa
Park
Lots 73 to 77
1.7219
147/234
Recreation
NPDC
Classified for recreation by NZ
DP 2094
Reserve
Gazette 2011 page 4243
forming part
of Peringa
Park
Part Lot F DP
1.3661
145/85 (now
Recreation
NPDC
Classified for recreation by NZ
1100
CFR
Reserve to
Gazette 2011 page 4243
557504)
form part of
Peringa Park
Part Lot 1 DP
1.2523
TN 148/57
Recreation
NPDC
Classified for recreation by NZ
5985 (and
(correctly
Reserve to
Gazette 2011 page 4243
Section 202
should be
form part of
Fitzroy District
TN148/157
Peringa Park
Part Section 159 6.1215
TN 188/77
Recreation
NPDC
Classified for recreation by NZ
Hua District SO
(now CFR
Reserve to
Gazette 2011 page 4243
8607 (and Part
557167)
form part of
Lot 2 DP 5985)
Peringa Park
Part Section 159 20.8939
TN 192/78
Not Public
NPDC
Used as park ( see Approved
MR (Lot 2 DP
Reserve -
Coastal Reserves Management
5664 and Lot 1
held for a
Plan) but not a reserve subject
DP 8987 and
local public
to the Reserves Act 1977,so is
Part Section 159
work for
not subject to the revocation
Hua District)
“public
process for disposal purposes.
abattoir)
Part Section 159 2.6092
TN 191/67
Recreation
NPDC
Classified for recreation by NZ
Hua District SO
Reserve to
Gazette 2011 page 4243
8617
form part of
Peringa Park
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Part Section
5.3621
TN 133/85
Recreation
NPDC
Declared recreation Reserve
17B Block SO
Reserve
and deemed Classified for that
6926
purpose by NZ Gazette 1989
page 868 and 1989 page 1812
Pukeweka 17A
24.9135
TN 105/81
Recreation
NPDC
Declared recreation Reserve
Block (SO
(now
Reserve
and deemed Classified for that
5817)
TNH3/1030)
purpose by NZ Gazette 1989
page 868
•
Note that as standard practice to any revocation, the Council ownership would be subject to further scrutiny to confirm Council
underlying reserve ownership. The cost of this work , and securing reports on the need to any offer of land to former owners
depending on the number of titled land parcels decided upon for disposal would be up to $20,000.
C. RESERVES ACT 1977
1. Statutory Provisions to Revoke the Reservation over Public Reserve under
Reserves Act 1977
The recreation reserve held by the Council is vested “in trust” in the Council as the
local authority administering body under the Reserves Act 1977.
Section 24(1) (b) of the Reserves Act 1977, provides that pursuant to a resolution of
the local authority, it considers for any reason to be stated in the resolution that the
reservation of the whole or part of the land as reserve should be revoked, then the
Minister (of Conservation) at his discretion may by notice in the Gazette revoke the
reservation of the whole or part of the land as reserve.
2. Public Notice Requirements under Reserves Act 1977
Subsection (2) (a) of Section 24(1) provides that the administering body (the Council)
after consulting the Commissioner (Director General of Conservation) shall
(mandatory) publicly notify the proposed revocation of the reservation specifying the
reasons.
Note that the Council also has to take into account its statutory duty to consult with
the community in its decision making under the Local Government Act 2002
(Sections 78, 81 to 83, 91 and 93) and in terms of its Consultation Policy P09-001.
3. Right of Objection
Subsection (2) (b) of Section 24(1) provides that every person claiming to be affected
by the proposal to revocation shall have a right of objection and may at any time
within one month after the date of the first publication of the notice of the proposal,
give notice in writing of his objections to the proposed revocation to the Principal
Administrative Officer or shall forward a copy of all such objections with a copy of
the resolution of the administering body (the Council) in relation to those objections,
after the administering body (the Council) has considered those objections.
Note that any person who does not lodge an objection shall be deemed to have
assented to the revocation.
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4. Iwi Consultation under Reserves Act 1977
Section 4 of the Conservation Act binds the Reserves Act, and the need to undertake
iwi consultation on the revocation, alongside its obligations under the Local
Government Act 2002 and Consultation Policy.
5. Consideration of Revocation by the Minister of Conservation
Subsection (2) (e) of Section 24(1) provides that the Minister (his delegate) shall as
soon as practicable consider the proposed revocation and all objections received
thereto and in the case of objections made to the administering body (the Council) the
resolution of the administering body (the Council) and attitude of the administering
body.
The Minister shall have power to receive such submissions and make inquiries as he
thinks fit on the proposal. The Minister may follow such procedure as he determines.
6. Approval to Reserve Revocation
Gazettal of the Revocation over the whole or part of the recreation reserves would
result in the uplifting of the “reserves trust and reservation” over the reserve and
provide the Council as the body corporate under the Local Government Act 2002,
with a freehold reversionary title (subject to any legal interests thereon).
Note that if only part of the reserve land title is involved, subdivision resource consent
would be required in terms of the rules in the Council’s operative District Plan and the
Resource Management, to enable new titles to issue over subsequent allotments on
deposit of the Land Transfer Plan for gazettal purposes.
7. Subsequent Council Disposal of the Land - Council Sales Policy
Any disposal of the land at current market value would then be in accord with Council
Policy Approval of Properties for Sale and Method of Sale P05 -019.
That policy would require the Council to investigate if there was any requirement to
offer the land back to the former owners or successors under Section 40 of the Public
Works Act 1981 or an exemption prevails not requiring an offer back.
Any offer back at current market value, to any former owner or successors in title
would be open for a 40 day period. If the “off market” offer is declined, the Council
can then decide how it wishes to market the sale of property.
8. Approved 2006 Council Coastal Reserves Management Plan
The Council approved a Management Plan for its Coastal Reserves pursuant to
Section 41 of the Reserves Act 1977, to which management regime it is bound, which
was subject to a robust public/iwi consultation/submission process.
Chapter 5.27 covers Peringa Park including Lake Rotomau and includes the leased 18
hole Fitzroy Golf Course reserve land.
Under Objectives 5.27.3 the plan provides “To provide opportunities for large scale
outdoor recreational activities, such as golfing close to New Plymouth”.
Under Policies 5.27.4, the plan provides in respect of the golf course area:
Document name: Review of Revocation and Disposal Process of Recreation Reserve - Fitzroy Golf Club
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“(k) The existing use of the reserve land as a golf course is recognised.”
“(i) If formalised use of this area ceases at some time in the future, the area will be
reverted to public open space and used for the purposes of casual and organised
outdoor recreation.”
“(m) Future landscape planning will investigate the provision of access across and
around the golf course in consideration of safety and impacts on the use of the area as
a golf course.”
Note that the Council can review its Management Plan at any time and is required to
keep its plan under continuous review (Section 41(4)) so the plan can be adapted to
changing circumstances. Note a plan change would result in public/iwi
consultation/submission process and would follow the same statutory process for the
initial approved plan.
D. FREEHOLD LAND - NOT PUBLIC RESERVE
1. Computer Freehold Register TN192/78 - Not Public Reserve
This land is held by the Council in an estate in fee simple (freehold) for the purpose of
“public abattoir” and would therefore fall with the ambit of a local public work for
that purpose as defined in the Public Works Act 1981.
It would not therefore be dealt with a revocation under the Reserves Act 1977, noting
that this land forming Lake Rotomanu and lake margins is managed as reserve in
terms of the Approved 2006 Coastal Reserves Management Plan.
2. Disposal/Retention of Public Abattoir Freehold
Any disposal would require the Council to initiate disposal through public/iwi
consultation/consider submission or objection and then declare the land (or part)
surplus to requirements which would then trigger consideration of the offer back
requirements under Section 40 of the Public Works Act 1981. Thereafter the Council
could sell the land in terms of its Sales Policy.
However, as this land comprises principally Lake Rotomanu, and land buffer margins
around the lake and riparian strip along the Waiwhakaiho River, no disposal of the
land would be contemplated as it would need to be retained for recreation purposes.
3. Disposal of Adjoining Stopped Road
Those areas of unformed legal road comprising Record Street (part may be used as
golf course) and Weka Street (unless required to be formed as part of any subdivision)
could be stopped under the Local Government Act 1974 subject to public notice,
objections and/or any subsequent Environment Court decision.
On stopping the Council would secure a freehold title for disposal purposes.
Document name: Review of Revocation and Disposal Process of Recreation Reserve - Fitzroy Golf Club
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E. PLANNING
1. District Plan Notations
Planning Maps B27 record the reserve (Peringa Park/Golf Club area) as open space A,
B and C as delineated, with volcanic hazard 3 overlay and H1 (coastal hazard)
overlays.
Any disposal of the land would require review/investigation in terms of any plan
change to say residential.
2. Recreation and Open Space Strategy
The Council is about to begin the development of a Recreation and Open Space
Strategy which has the objectives of –
1. To develop recreation and open space outcomes including consideration of –
• The recreation, sport and leisure needs of the community and emerging trends.
• High performance sport needs.
• Connectivity and use of open space for community accessibility.
• Regional biodiversity objectives.
• Local identity and sense of place amenity.
2. To define levels of service for open space and recreation facility provision.
3. To identify options for acquisition of land that has a high potential to meet
community recreational needs or is required through level of service provision.
4. To develop criteria for de-acquisition and identify priorities for de-acquisition of
land and facilities that offer limited opportunities or public benefit.
5. To identify opportunities for improving and enhancing recreation opportunities,
including (but not limited to) opportunities for bridle trails, mountain bike tracks
and a dog park (as identified during the 2009-19 Community Plan consultation
process).
This strategy is due to be available as a draft for consultation in late 2013 and adopted
in early 2014. This strategy will assist the Council in determining if there is sufficient
need to continue with the land as a golf course or if de-acquisition should occur.
F. VALUATION
Rating Value - as at 1 September 2010
Capital Value
$ 4,280,000
Land Value
$ 3,584,000
Value of improvements
(including value of greens
and course infrastructure ) $ 696,000
Document name: Review of Revocation and Disposal Process of Recreation Reserve - Fitzroy Golf Club
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Based on 38.55 hectares the current land value equates to $93,000/ha, and has been
discounted to take into account the recreational use and zoning. Normal discount is
around 30-50% which would indicate a ‘Market Value’ of around $5-$7,000,000.
($130-$180,000/ha).
The most recent sale of a larger seafront block is 6.18 hectares, adjoining Hickford
Park that the NP Golf Club sold to the Links developers for $1.5m or $243,000/ha, in
2009.
Sections adjoining the coast have a rating valuation at $550,000-$650,000. Closer to
town they are up to $1.0m. Sections overlooking the golf course in Rophia Street are
valued at $250,000, however recent sales have been in the order of $350,000 upwards.
G. CONCLUSION - SUMMARY OF LIMITATIONS ON DISPOSAL
a) The Council’s ability of being able to claw back the whole or part of the Fitzroy Golf
Club Lease area for disposal purposes. The lease provides for the option for the Club
to seek a right of renewal for a further term of 21 years from expiry of the current lease
on 30 June 2023, but that is subject to “
the Council being satisfied there is sufficient
need for the continued operation of the Fitzroy Golf Club”. On the basis that the Club
would want to continue its operation, the Council would need essentially to negotiate a
voluntary surrender of the lease or buy the Golf Club lease out or relocate the club’s
course to other land.
NOTE there may be some very limited ability to look at the revocation and saleability
of those areas of reserve/land not under lease by the Golf Club, if not required for
reserve.
b) Public opposition to the proposed revocation for disposal purpose following public
notice/iwi consultation calling for objections under the Reserves Act/Local
Government Act 2002. In addition direct objection that would likely arise from the
Golf Club and or members.
c) The need to secure the consent of the Minister of Conservation’s delegate consent. The
Department of Conservation will take into account public objection and require the
Council to prove that the land is currently not required for reserve or for future
generations on the basis that adequate recreation reserve is available. That will likely
require a comprehensive study and report by the Council on available recreation
reserve to demonstrate that the land proposed for revocation is not required for reserve.
Note the land owned by the Council for Abattoir purposes is not affected by any
revocation and disposal can be dealt with more freely by the Council.
d) A study of planning zoning requirements/limitations on land use to ensure that there
are no planning impediments that would limit securing the maximum sale price for the
land for its intended end use.
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H. CONCLUSION - SUMMARY OF OPTIONS FOR DISPOSAL
a) Buy out the Golf Club lease and on-sell to third party.
Their current rent is $8,293 per annum. The ‘market rent’ is estimated at $17,325 per
annum ($450/ha). The Fitzroy Golf Club has around 300 members with an annual
subscription of $475, indicating an income from subscriptions of $143,000. Thus they
would be unlikely to sustain any major increase in rent between now and 2023.
The lessee’s interest is made up of:
• The net present value of the rent savings for the next 11 years.
• An allowance for the chance that the lease could be renewed.
• The value of the Golf Club’s improvements.
The Property Team estimate the lessee’s interest at $850,000 - but a range of between
$800,000-$1,000,000 is the likely amount the Fitzroy Golf Club could hold out for
during a negotiation process.
The Council could then on-sell to a third party – Developer, OTS, JV partner, at a
market value of between $5m-$7m.
b) Sell lessor’s interest to Golf Club
The Council could approach the Club to purchase the Council’s lessor’s interest. A
market value of between $5m-$7m is indicated, however in this instance a discount of
between 30-50% to take into account that the land could only be utilised for a golf
course would reduce the market estimate to $2.5m-$3.5m at the lower end.
However, this is unlikely on an affordability basis – a mortgage of $3.5m at 6%
requires annual payment of $210,000 interest only. The Golf Club would have to sell
part of the land to fund the purchase which would be problematic.
c) Investigate what portions of the property could be practically excised from the main
lease and developed or sold for residential use ie. stopped road in Record Street and
Weka Street.
There may or may not be parcels of land that fit this category. Sections could be
expected to start at $350,000 sale price. However the disposal issues are still apparent.
I. CONCLUSION
Based on the fact that the Fitzroy Golf Club, has
1. A secure lease tenure until 30 June 2023.
2. A right to exercise renewal of its lease on expiry of the current term on the same
terms and conditions subject to a new rental for the new term.
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3. The assumption that the Club is likely to wish to continue on with its lease into the
foreseeable future provided its operation continues to be viable.
4. The lease for golf course purposes is a legitimate open space activity on recreation
reserve.
5. The provisio that the Council must grant a renewal lease provided it is “satisfied there
is sufficient need for the continued operation of the Golf Club”; and
that the Council would:
6. In effect need to negotiate with the Golf Club to secure release of the land (or part)
and or purchase the lease and or relocate the Club to other land.
7. Undertake public notice/iwi consultation of its intention to seek ministerial consent to
revoke the reserve status over the golf course and consider all objections before
making a final decision.
8. Comply with its statutory obligations under the Local Government Act 2002, and/or
policy considerations.
9. Undertake a comprehensive exercise or obtain an independent report to demonstrate
that there was no need to retain the Golf Club land for continued recreation reserve
purposes either now or into the future, on the grounds that there is sufficient
remaining public reserve available for recreation.
10. Await the outcome of the Recreation and Open Space Strategy planned for adoption
early 2014, as a pre-requisite to the possible need for the continued use of the
recreation reserve for golf course purposes and/or retention of the land for public
reserve.
11. Undertake the hurdle to secure ministerial consent to revocation to remove the
“reservation and trust” from the land on the basis that the Minister’s delegate would
take into account all objections and iwi concerns, and make any enquiry he or she sees
fit, noting that the weight of public objection to the loss of the reserve land/open space
that the Minister’s delegate would likely refuse to give consent.
12. Consider any statutory offer back requirements under Section 40 of the Public Works
Act 1981, to any former owner or successor, unless an exemption applies to an offer
back.
13. Undertake any further public notice to the proposed sale of the land on the open
market in terms of Council Policy on the Approval of Properties and Method of Sale.
14. Undertake the required plan change to rezone the land from Open Space to
Residential in terms of the RMA, submissions and/or any appeal to the Environment
Court.
15. Investigate and consider other more potential viable options for land sale/revenue
purposes based on that land being surplus to current requirements.
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J. RECOMMENDATION
While noting the incumbent high revenue potential held by way of Council equity value
in the rezone/sale of the land leased to the Fitzroy Golf Club, it is
recommended that
because of the burden imposed by the right of renewal terms under the current leasing
regime, the Council’s limitations to deal freely with the land, allied to the restraints in
process imposed by statute under the Reserves Act 1977, Local Government Act 2002
and the Resource Management Act 1991,
that no further action be taken until the
completion of the Parks Recreation and Open Space Strategy. That Strategy is
proposed to be available a draft for consultation in late 2013, and for adoption in early
2014, and will be a pre-requisite in determining if there is sufficient need for the
continued recreational use for golf course purposes and/or retention of the land for
public reserve.
2. In addition to 1 above, notes that, with a period of 2 to 3 years prior to the expiry of the
current Golf Club lease term, the Council will need to consider the continued use and
leasing of the recreation reserve land as part of the lease renewal process.
K. APPENDICES
Appendix A
Recreation Reserve (including Public Abattoir Area).
Appendix B
Fitzroy Golf Club Lease Area.
Appendix C
Planning Maps B26 and B28.
Appendix C
Copy of Fitzroy Golf Club Lease and Variation.
Murray Greig
Jeremy Wichman
Peter Handcock
PROPERTY ASSET TEAM
Anna Crawford
Mark Bruhn
PARKS ASSEST TEAM
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APPENDIX C
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APPENDIX D
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Document name: Review of Revocation and Disposal Process of Recreation Reserve - Fitzroy Golf Club
lease. CM 08 28 01, v04, ID 008568
Document Number: 1366252
32
Document name: Review of Revocation and Disposal Process of Recreation Reserve - Fitzroy Golf Club
lease. CM 08 28 01, v04, ID 008568
Document Number: 1366252
33
Document name: Review of Revocation and Disposal Process of Recreation Reserve - Fitzroy Golf Club
lease. CM 08 28 01, v04, ID 008568
Document Number: 1366252
34
Document name: Review of Revocation and Disposal Process of Recreation Reserve - Fitzroy Golf Club
lease. CM 08 28 01, v04, ID 008568
Document Number: 1366252
35
