Out of Scope
From:
Graeme Broderick <[email address]>
Sent:
Friday, 14 June 2024 4:09 PM
To:
Clive Manley
Subject:
RE: CONFIDENTIAl: Recovery of costs Teitei Drive, Ohakune Housing Development
Sensitivity:
Confidential
Kia ora Clive,
Thank you for your time recently to discuss the recovery of Council costs.
Kāinga Ora was invited to partner with Council and Ngati Rangi to deliver much needed housing for the
Ohakune community. We entered the partnership in good faith and acknowledge that the intention was
for the project to be cost neutral for all parties on delivery of the outcomes.
We value the collaboration and partnership we have built with Council, however, as we discussed, Kāinga
Ora has no liability to cover Council’s costs, and regretfully it is not in a position to cover these costs.
Ngā mihi
Graeme
Graeme Broderick
Regional Director
Mobile: s 9(2)(a)
Taranaki Whanganui Manawatu
Email: [email address]
under the Official Information Act 1982
Freephone: 0800 801 601 | Kāinga Ora - Homes and Communities
PO Box 248 Palmerston North 4440 | New Zealand Government | www.kaingaora.govt.nz
Released
From: Clive Manley <[email address]>
Sent: Thursday, May 9, 2024 9:37 AM
To: Graeme Broderick <[email address]>
Cc: [email address]; Quentin Speers <[email address]>; Melissa Jackson
<[email address]>
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Subject: CONFIDENTIAl: Recovery of costs Teitei Drive, Ohakune Housing Development
Sensitivity: Confidential
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Graeme Broderick
Regional Director
Taranaki Whanganui Manawatu
Kāinga Ora
PO BOX 248 Palmerston North 4440
Email: [email address]
1982
RE: CONFIDENTIAL Teitei Drive Housing Development - Recovery of Costs
Act
Kia ora Graeme
As we had previously discussed, I am now approaching you to assist the Council in recovering costs that it has
incurred during the period that it worked and partnered with Kāinga Ora to advance public, market rental and
affordable housing at Teitei Drive, Ohakune.
As you are aware, the Council’s original application for funding of $5.2M for the developm
Information ent of 44 housing lots at
Teitei Drive was not approved in late 2020 by Crown Infrastructure Partners (CIP). Rather, CIP subsequently entered
a Funding Agreement directly with Kāinga Ora on the basis that Kāinga Ora would work with RDC and Ngāti Rangi on
the Teitei Drive housing development. These Agreements (between Kāinga Ora and MHUD; and RDC and Kāinga
Ora) were not signed until 4 April 2023. However, ongoing partnering, due diligence and business case studies were
undertaken throughout 2021-2023 to enable government and Ministers to have confidence in the Teitei Drive
Official
housing project and enter into Formal Agreements.
the
As you will appreciate the Council has engaged planning, engineering and legal consultants throughout this time so
that it could assist Kāinga Ora, the Council and Ngāti Rangi to meet mutual and shared goals of providing
more social and affordable housing in Ohakune. Work undertaken by Council’s consultants, in particular Ree
Anderson Consulting Ltd, Morrison Low, and Le Pine and Co has included:
under
2021-22. Workshops, meetings and site visits with Kāinga Ora and Ngāti Rangi to confirm possible
partnering arrangements, meetings with PwC, the provision of information from previous due diligence,
provision of advice and information on Council infrastructure, building and resource consent data, reports
to council/committee
2022-23. Meetings, site visits, review Developemnt Partner Agreements; liaison, reports to committees
2023-24 Attendance at DPM (Development Partner Meetings) and site visits, review of documentation such
Released
as Project Plan, advice on previous due diligence, review of technical reports including consenting
documents and provide feedback, responding to LGOIMA requests liaison on Council infrastructure,
reports to council/committee
The total consultancy and legal costs for this work over the last 3.5 years is $268,158.60. A copy of the excel
spreadsheet that itemises these costs for each financial year is attached.
It was acknowledged as the Teitei Drive project advanced, and as part of the due diligence process between CIP
and Kāinga Ora that some of the Council costs were not going to be covered by the CIP funding, in particular the
costs to Council of engaging consultants to participate in the development of the proposal and the partnering
process. It was then agreed with Kāinga Ora that Council’s land at Teitei Drive (effectively 1.6 hectares for the Super
Lot and creation 44 lots) would not now be given as a local share but would be sold to Kāinga Ora. This was included
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in the Sale and Development Agreement between RDC and Kāinga Ora. The sale of the land for an agreed s 9(2)(j)
+ gst (if any) would then cover costs incurred by the Council. At the same time, the sale of the subject land and
payment was not expected until mid 2025 (following the completion of milestones as per the Sale and Development
Agreement).
As Kāinga Ora has now withdrawn from the Project, the sale of 1.6 ha of Council land at Teitei Drive to Kāinga
Ora will not proceed and it means that Council has incurred costs that it thought would be recoverable. Council
always entered into arrangements on the basis of the project being cost neutral as per its original CIP funding
application.
As we discussed, my request is that costs incurred by Council be reimbursed by Kāinga Ora. It is accepted that work
with Kāinga Ora commenced in January 2021 and concluded in February 2024, following the announcement
of Kāinga Ora to withdraw from the project. It is also acknowledged that the proposed sale of the approximately 1.6
ha of land at Teitei Drive would not have been completed for another year and that a portion of the s 9(2)(j) would
be available for work undertaken by consultants to Council from March 2024-June 2025 if the project were
proceeding. I therefore propose seeking reimbursement from Kāinga Ora to cover costs to date incurred since
January 2021.
1982
I ask that you consider this request. I am very happy to discuss and look forward to resolving this matter with you.
Act
Many thanks..
I look forward to hearing from you soon.
Kind regards,
Clive Manley
Information
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Clive Manley
Chief Executive
Ruapehu District Council
Official
Ruapehu District Council | Private Bag 1001 | Taumarunui 3946 | New Zealand
the
Phone: 07 895 8188 ext: s | Fax: 07 895 3256 | Mobile: s 9(2)(a)
email: [email address] | RDC website: www.ruapehudc.govt.nz
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