The Honourable Eugenie Sage
10 July 2020
Dear Minister,
Re: Government endorsement of Kapiti Island ‘Gateway’ proposal
Introduction
I write concerning your endorsement of the Kapiti Gateway Project. This project will provide a transit bio-security facility for visitors to Kapiti Island. Kapiti Coast District Council is seeking Provincial Growth Fund funding on the basis that it will create jobs and grow the economy. It has a ballpark cost estimate of $4.46 million¹. The economic growth will be driven by a purported increase in island visitor numbers soaring to 58,000 per annum.
Your endorsement was seen by the proponents as pivotal, particularly in light of the project not reaching break-even for 6 years. At the Council meeting of 28 May the Mayor emphasised the importance of your support in getting PGF funding. Outlined here are the areas of concern.
Government and the business case
- Encouraging a “Loss leader”
KCDC identified early on the almost insurmountable problems with trying to prove there was a legitimate business case to put up to the PGF. All of this was redacted when it came to filing the application, but should have been equally apparent to any competent Government advisor. Two memo’s put it succinctly:
- “The business case is a toughie, because from the Council’s perspective, it is a long-term “loss-leader”.
- “The difficult thing is justifying the expense. Not just the infrastructure but the ongoing costs. Council will have to fund the depreciation, the running costs and maintenance. That cannot be justified without a serious step change in the growth of visitors…. Without growth of this kind the Gateway could remain nice to have- which is likely to be judged as unaffordable in these times”.
Your perceived endorsement of encouraging visitor numbers to Kapiti Island to increase 300% enabled KCDC to present a business case that the project was feasible. Upon what statutory power or other ground did you exercise your decision to support this project identified as, a long-term “loss-leader”?
2. Government encourages PGF to fund projects requiring substantial Ratepayer subsidy
As a Cabinet member your support of this particular project indicates the Government considers projects that need ratepayers subsidy as meeting the PGF’s business case requirements. The details are in Annexure 1. KCDC’s documents show, even on a “best case” scenario the Gateway will not be self- funding for at least 6 years — 6 years of ratepayer subsidy.
3. 5 real jobs lost and 2 ticket issuer jobs gained
There are 2 boat operators. One operator, Eco (who carried over 6,000 of 15,000 passengers last year) supports a Gateway but opposes the Mayor’s ‘Taj Mahal’. The cost of using the bio security building will be $21 per passenger. Eco has said the extra $21 fee for using the checking room will kill his company as Eco’s customers will not be able to afford this in addition to the boat ticket price.
4. Phantom economic benefits to Kapiti²
You letter implicitly supports the argument there is a major economic benefit to the Kapiti Coast. Despite the fact that the Paraparaumu Beach Business Association, the alleged beneficiaries, are entirely against this particular project.
Please supply the economic studies and data you have that justified your opposing the facts as seen by the business community you project as being the beneficiaries of the project. Your Mr Mace will know these include moteliers, B&B owners, café owners and a Kapiti Island tourism operator. They really want to know what you know that they apparently, despite years of hands-on experience, do not.
Increased bio-security safety
You say the project will increase bio-security. How can that be, when for 35 years the current system has worked perfectly, without a single breach? How more perfect can bio-security be than 100%? You avow “Current biosecurity activities are unlikely to be sufficient to fully protect the island from future biosecurity risks…”.
Please supply the information upon which you relied to support this pivotal contention.
Matters you may not have known — relevant to a change of decision
Proceeding on the assumption the Government is concerned that the citizens in the “team of 5 million” get equal and fair treatment, and the total denial to interested team members of their pre-existing (prior to Covid-19) rights, you are requested to reconsider your support for the project, taking into account these relevant factors.
Consultation on this specific project
The KCDC report at paragraph 68 says, “Neighbouring residents of the site, contacted in earlier stages of the project …”. This is incorrect. The 5 homeowners / property owners directly affected have made written statements saying they were never contacted.
- DOC supporting loss of open space on Reserve land — favours food and beverage outlets.
Not only is the main building a commercial activity building you, as Minister are supporting 2 pods (Containers) for commercial use providing food and beverage.
These further reducie open space on reserve land. This runs counter to the principles in the Reserves Act which you administer. S.3 specifies that reserve land is to be preserved and managed “ for the benefit and enjoyment of the public”. Where access is subject to a fee, that excludes all non -paying members of the public. Reserve land is for free public access.
I look forward to your urgent reply.
Yours faithfully,
C.B. Ruthe LLB
1. KCDC is providing the land and the ongoing expenses. None will be met by either DOC, or the boat companies using the facility.
2. The economic benefit case KCDC relies on is predicated on “40% of visitors to Kapiti Island staying a night and if every person paid $200 a night (that is $400.00 for a couple). That is $1.2 million back into the local economy, p.a.”. A search on the Internet reveals there is no visitor accommodation at Paraparaumu Beach costing $400 per night for a couple: the range is $125–$150.
I find it just incredible that the writer, who appears to have availed himself of every single piece of information about the proposed Gateway facility is still unwilling to put pen to paper and admit publicly that he knows the Gateway will be far more than just a ticket selling base for Kapiti Island departures and overnight stays. ADD diving excursions, dolphin and whale watching, seal colony visits, canoe trips, educational science trips offshore/ a functioning bio-security facility, an environmental classroom for school trips/ a community space for learning about our history and iwi with changing exhibitions, a base to rent electric bikes, a hub for Kapiti visitor information, a venue for hire and with comfortable spaces for the whole community to come and enjoy live audio feeds of the birdsong. Like the libraries and pools the council provides, the value of all the above to the community is not something ever only just measured in $$$. I really look forward to bringing my all extended family to the Gateway.
Well said.
This council has a long record of diverting ratepayers money to nonsensical and wastfull projects. When will they ever learn that money doesn’t grow on trees.
Councillor Elliott, all of the things you mention are of no interest to those people whose income has been slashed so they now have no discretionary income to spend on any of those activities of which you speak. Notwithstanding the fact that at some point this project may have some merit, it is clear that at this point in time the people paying for it neither want it nor want their money spent on such a grandiose building. The Council is there to represent the ratepayers and from every survey I have seen on this proposal, there is overwhelming opposition to this project. All I want to see is the Council take heed of ratepayers and shelve this project until a later stage when we can see just what an impact Covid 19 has on tourism, cos I’m pretty sure the numbers projected in the case put to the PGF are way off base!
The KCDC as always has the opinion that there is always an open door, as far as the financial situation of Kapiti is concerned, and does anything but sticking to the Basics that the Council has been empowered by the Ratepayers to Manage those important items of general Concern. and not issues of total nondescript as far as the Majority of it’s Community is concerned, that is to hit their pockets, especially at times like this, when we do not know what is waiting for us around the next corner or whenever!!!
To address your very valid comments above, I completely understand the need for affordability for residents, especially at this time. The council has been driven by a prudent and affordable strategy for the past 7 years and it is planned to continue on the same path as plans to fund $100M of underground pipe replacements in a few decades have to be made.
This project (funded over the next 3 years LTP, not this years) balances that need with the need to boost post-covid economic recovery, with the one-off opportunity for 50/50 Govt funding of this strategic investment and does NOT ‘break the financial strategy’.
This project has taken 28 years to get to this stage, and at $2.3M initial cost to ratepayers is a fifth of any previous Gateway proposal cost, (approx $15M). Previous councils prior to 2013 were horrific spenders (4 major projects over 3 years) and for the past 7 years, the past two councils have reversed this and been prudently accelerating paying down debt and not investing in new capital projects.
* FACT – The Gateway will be able to self generate at least 6 ongoing self funding income sources and staff costs are in the existing budget and will be re allocated from the now closed i-site.
In the past 6 years, I have been a part of decisions to fix the Te Atiawa Courts, fix the Otaki Pool building, rather than spend on brand new. This has been just good common sense. After finishing a recent audit, the whole council now has the best information, it has ever had, on the condition of all halls etc to prioritise ongoing maintenance.
The two glaring exceptions to the ongoing plan of caring for the public buildings is the Waikanae Library and Te Newhunga building, councillors simply were not advised of the extent of their degradation. Alongside our community, we were and remain very upset about this omission of information that went on for years. Council has last month budgeted to fund for remedial work on Te Newhunga, scheduled to start now alongside work on the long term needs, and begin feasibility work for a replacement library facility this year.
NZ is poised to be one of the top worldwide tourism destinations in the world post-covid. And we can not ignore the fact that the island is a unique and popular world class eco-tourism destination already, we need a functioning bio-security facility to care for it for the future.
The Gateway project is a well planned project, well thought out, with complete consultation and engagement over the past 5 years which is why it has been on the long term plan for three years. With pending PGF funding, building it remains in line with the prudent financial strategy of council to keep paying down debt into the future.
Meantime, there are mixed views out there in the community, I am listening to all of them. Many many people thoroughly support it, (and we are well aware many of them are publicly abused for saying so). Although they are not as vocal as the ‘ hate group’.
The council has to consider ALL opinions on this and the needs of the whole district.
But it’s not do or die, and the island departure activity and visitor attraction hub can easily be moved to other viable sites on the Kapiti coast to bring economic activity to other business communities, for example, the Raumati Beach Pool building and Marine Gardens site, which would be operationally ideal. It is a viable alternative if the Paraparaumu Beach community don’t want this investment for their area.
I am keen to hear from more of the Paraparaumu Beach business owners who support this strategic investment for Paraparaumu Beach to enhance their own businesses and future livelihoods.
Either way, either site, the Gateway is just common sense, it will bring more $$$ into the districts economy and be a fantastic educational community space, it is for you too, not just visitors.
It is not –
a vanity project,
overly expensive,
It is very much needed
and if the PGF funding application is successful and the project still doesn’t go ahead….it will be the third time in 28 years, a few very disgruntled neighbours have completely thwarted the chance to provide any semblance of a bio-security facility for the island in 28 years. As a longtime resident who has watched this happen over and over, and our Islands abundant flora and fauna remain at risk every single day, that would be a complete shame.