Nearly $800k spent on controversial Shelly Bay development

10:56 am on 22 August 2019

Wellington City Council has spent nearly $800,000 of ratepayers money trying to get the Shelley Bay redevelopment off the ground.

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Figures obtained by RNZ through an Official Information Act request show the council has spent the money on consultancy fees, legal costs and resource consents for the stalled project.

However, the council admits the true cost so far is likely to be more than $800,000, as that does not include internal costs, or money spent on independent commissioners.

Nearly half of the money accounted for went towards the legal battle over the Resource Consent, which was initially granted in April 2017, but was quashed by the Court of Appeal in December.

City Councillor David Lee said by rushing the resource consent through under the Special Housing Areas Act, the council bypassed public consultation, which turned out to be a big waste of money.

"I don't think it should've been classed as a Special Housing Area in the first place, and that would avoid a lot of these costs," he said.

He said the purpose of the Act was to create more affordable housing.

"What level of affordable housing are we going to get from a place like Shelly Bay. There is no affordable housing component in a development like this, and that's why I really have issue with using this legislation to basically bypass public process."

More than $300,000 went into legal costs, which includes the development, judicial review, and the court of appeal. $20,000 was spent on the resource consent, and then reconsideration costs. And the council was forced to pay another $30,000 court costs to the lobby group Enterprise Miramar, which successfully challenged the resource consent in the Court of Appeal.

Its chairman Thomas Wutzler said, from the beginning, he's been frustrated that the council have not been prepared to engage with the community.

"We didn't take them to court lightly," he said. "We wrote to them well in advance several years earlier, and we go not response. We then wrote again, we then got a lawyer to write to them out of frustration. Nobody was given the opportunity to comment on the project at all from the beginning."

Another $400,000 has been spent on development consultants.

The council has since handed over the authority of issuing the resource consent to three independent commissioners, who are expected to present their findings later this year.

What they are costing has yet to be revealed.

But the Mayor of Wellington, Justin Lester, said the amount of money that has been spent is not unusual for a development on this scale, and legal costs with any development are to be expected.

"They are relatively consistent with other legal action we've had to face as a city," he said. "This is the process we face when you're going through developments like this.

"This is a judicial process that is followed, and these costs, while unfortunate, that's someone's democratic right, that's their legal right, and the council has to defend those claims when they are contested."

The council currently has an agreement with Shelly Bay Ltd - the company managing the development - that they will each pay $10m in infrastructure costs.

For the council, this is a capped sum of money, that will go towards improving roads, seawalls and sewerage, as well as redeveloping public parks.

But the near $800,000 that has already been spent is over and above that.

As is the proposed forthcoming review into the Shelly Bay development, which is predicted to cost around $180,000.

The council will today vote on the terms of reference for that review.

But that review can't go ahead until the commissioners report their findings.

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