Post Earthquake, Christchurch Landowners Run Roughshod Over by the Crown

When the blueprint for the future Christchurch was announced with great fanfare by the Minister of all things ground shaking, Gerry Brownlee back in August, there was much made of the fact that there were a handful of key projects that were seen as of strategic importance in the rebuild – these projects included the convention center, the stadium, the sports center etc.

We have the dubious distinction that our commercial property (read it’s sorry tale here) is situated within the precinct penciled down for the new stadium. We resigned ourselves to the fact that our land would be lost to us, but were buoyed by the stated intention to quickly and fairly manage the land acquisition process and were happy that the body tasked with managing the process, CCDU, was making comments about potential land swaps for effected parties. We dutifully gave CCDU all the required information about our property within the week of the announcement of the blueprint. And then we waited. And waited.

It’s taken three months and this week we received notification that the Crown has obtained a valuation on our land and that valuation would mark the starting point for a negotiation about land purchase. We raised the potential of a land swap and where told that there was virtually zero chance of this occurring and the mention of this when the blueprint announced was something of a “pipedream”.

First some context – our land has a Government valuation of $480 per square meter. This dates back to 2007 and obviously in the years since, land prices have appreciated markedly. Add to this the fact that immediately following the announcement of the blueprint, and the fact that it included a huge reduction in buildable land, that basic economics created a reduced supply/increased demand loop and that land prices have risen correspondingly. Therefore one would expect that valuations would take this into account, and that the price offered would, to a greater or lesser extent, allow landowners to replace their lost land with something comparable.

Alas not, the Crown’s assessment, based on a allegedly thorough valuation, was set at $433 per meter. Less than the value back in 2007. Far less than the price for comparable properties selling in the current market and, most importantly, less than we’re going to have to spend to get a replacement piece of land anywhere similar.

But here’s where it gets interesting. The Crown contracted valuers Colliers and Telfer Young to perform all the valuations. As would be expected, we requested from CCDU’s agent a copy of the valuation. Strangely we were told that:

Unfortunately we are not allowed to hand out the Crown valuations. The reasoning behind this is that we have made an offer at market value (based on the Crowns valuation) and it is up to the property owners to provide evidence contrary to that of the crown if they disagree

This is highly unusual – in usual negotiations, be they rental or buy and sell ones, both parties have access to valuations and hence negotiations can happen in an open and transparent manner. In this case that is not the process and the Crown, despite its stated intention to act fairly, honorably and flexibly with landowners, would seem to be taking the role of commercially-driven land banker, while at the same time sheltering under the protection of an unprecedented piece of legislation which puts all the power in their hands.

I discussed this fact with some independent valuers working in the Christchurch market and was told that the rumor among them was that the independent valuations the Crown has obtained are actually higher than the offers being presented, and that the Crown is going in with low offers to give itself some negotiating room. No one would go on-record saying this, people are shaking in fear at the power that CCDU and CERA are wielding in this city. What we have here then is a situation where the crown is demonstrably acting in a prejudicial manner that is designed to minimize the amount they have to pay for land. In other words, the Crown is using subterfuge to duplicitously rob land owners of fair value for their land, and in doing so, is furthering its intention to make an economic windfall from the future sale of acquired land.

There’s another aspect to all of this and that is the suggestion that the Crown is intending to acquire land, ostensibly with the aim of most effectively ensuring the consistent and coherent rebuild of the city but that in fact it is finding ways to roll up land at an artificially deflated price and to later sell that land at inflated prices. Under the terms of the Public Works Act, affected landowners must be offered first right of refusal to re-acquire the land should the stated project go ahead. There is no clarity as to whether this will occur in this event – CCDU has been largely silent on this first-right of refusal in the event that the stated projects don’t occur and this increases the perception amongst landowners that this is an opportunistic way for the Crown to profit at the expense of those in Christchurch who have already suffered so much over the past couple of years.

Alas, yet again, it would seem that something is rotten in the state of Christchurch.

5 Comments
  • First stop is the OIA. Then the Ombudsman when they turn you down. Since they’re guaranteed to turn you down, you can have your Ombudsman appeal letter pre-written to send out….

  • There’s a certain irony in the stated purpose of ‘The Frame’ land buy up and the market price for land in the central city.

    The CCDU have stated on numerous occasions that the number one challenge above anything else when developing the Blueprint was the ‘oversupply of land’ in the city. IE they wanted to prop up land prices of other owners in the CBD over others.

    Don Miskell said at one of the CCDU Blueprint meetings that they proposed some small parks, and the CCDU economists came back and said it had to be much, much bigger. Hence ‘The Frame’ was born.

    So they got their wish, inflated land prices, but now they don’t want to pay the true market value to those who’s land they need to acquire to make this whole bullshit scheme ‘work’.

    Then they try and pass the whole frame concept off as a response to the share an idea consultation, because people said they wanted a ‘green’ city. Idiots.

  • “…economic windfall from the future sale of acquired land…” – is this in 10 years time when everyones forgotten its swamp?

  • As I listen to the objections by Christchurch residents what I am reminded of are the events that took place in Thailand after the 2004 tsunami there. Thailand’s politicians just as New Zealand politicians were very eager to evict the people and have them hand over their land – they were also sceptical of the hollow Government promises. In response to the Government offers they gathered together hundreds of people and engaged in land “reinvasions”. The residents of the Ban Tung Wah Village in the Phang Nga province encircled their wrecked village with rope, in a symbolic gesture to mark their land ownership. The entire community camped out and it became difficult for authorities to chase them away, especially given the intense media attention being focused on tsunami rehabilitation. In hindsight their community leaders say that their success is that people negotiated for their land rights from a position of occupation, some have dubbed the practice “negotiating with your hands”.

    Christchurch you will have to be more proactive and creative if you want to protect your interests. You have my support!

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