Horowhenua District Council - Property Strategy
November 2015
Overview
Council holds a significant property portfolio of approximately 550 properties that have a
total rateable value (land and buildings) of approximately $101 Million (2014).
The reason Council holds property is to enable it to deliver services as defined in the Local
Government, and Amendment Acts of 2002 and 2012 respectively. In particular the
overriding purpose of local government is defined in Section 10 of the LGA. This places an
obligation on all local authorities “
to meet the current and future needs of communities for
good quality local infrastructure, local public services, and performance of regulatory
functions in a way that is the most cost effective for households and businesses.”
In the LGA “good quality” is defined and measured as:
Efficient; and
Effective; and
Appropriate to present and future circumstances.
From a strategic point of view the LGA defines the overall outcomes that need to be
achieved by Councils. Many Council property obligations are then explicitly defined by
statute, regulation and or policy. In determining how Council should undertake its property
function it is impossible to depart from the stipulations dictated by this overarching
framework.
Having established that Council must deliver a number of services as a result of regulatory
and legislative imperatives it is important to note the majority of them require land-based
assets and infrastructure. Consequently local authorities must by reason of their function,
hold and maintain assets whether as owners; lessees; or in some other form e.g. as
stakeholders in trusts, partnerships etc.
The purpose of this strategy is to provide an overarching framework which assists
Horowhenua District Council in future decision making with regard to its property asset.
Property Drivers
The range of services Council’s deliver are many and varied and as such the property asset is
diverse including:
Infrastructural property, for example roads and water/ wastewater facilities;
1
Land, buildings and facilities held for community purposes, for example halls, cultural
hubs (“Te Takere”) cemeteries and libraries;
Recreation and reserves land and facilities;
General business premises including offices and depots;
Residential housing units;
Properties held for community good that may be leased to voluntary or community
providers and;
Miscellaneous assets such as endowment land and forestry blocks.
Property Function
Council’s property team manages the purchase; sale; rental; and leasing of Council property
both commercially and to community and voluntary organisations. It also manages routine
scheduled and reactive maintenance across all activities which include fire compliance and
Building Warrant of Fitness works required to meet legislative and regulatory compliance.
The portfolio includes commercial; recreational; residential; and infra-structural buildings.
The current cost of maintaining Council’s non-core asset for the next ten years is estimated
to be $2,884,000 this does not include interest payments; insurance; or overheads.
Similarly the current estimate to undertake seismic strengthening and deferred
maintenance on non-core Council property is estimated at $4,393,840 over the next 10
years.
This expenditure may be of a significant magnitude when set against the economic return
realised from lease or use of the asset which may be of a ‘peppercorn’ nature or at 1% of
land value (per annum). To minimise debt and maximise ‘bang for buck’ and ensure a good
return on investment1 there is a need to rationalise Council’s asset where necessary. The
Property Strategy will enable that process.
The need for a Property Strategy
There are a range of ways that dictate how Council’s acquire assets including as indicated
above the need to fulfil the requirements of primary legislation; to give effect to those
objectives identified by the community in Long Term planning; restructure/reorganisation of
Territorial authorities (TA’s); endowments; covenants; bequests; failure / bankruptcy of
community organisations to name but a few.
1 A subsequent piece of work that will arise from the Property Strategy is the Community
Assistance Policy that will provide a commercial and community leasing framework.
2
As indicated Council can acquire assets in a number of ways and there is as a result a need
to have a formal process to test whether an acquisition, or indeed the ongoing maintenance
and management of an existing one, is in the strategic interest of Council and the
community it serves.
Similarly there is a need to have a formal process to dispose of assets should they be
redundant after renewal; legislative change; or lack of community use. Consequently there
is a necessity to measure the strategic value of an asset to the organisation and community
by way of ensuring Council only owns, maintains, and/or manages those assets that have
strategic relevance; relate to core business; or add value in another form. This approach will
ensure that Council achieves the best possible return on its property asset and will minimise
costs associated with maintaining or renewing it.
A number of properties have previously been identified for sale via Council resolution
arising from the meeting of Horowhenua District Council on 05.08.2009 these are indicated
in Appendix 1. Efforts will continue to dispose of them under the terms of the existing
resolution. However there are a number of other properties that need to be considered for
disposal and the Property Strategy will provide a framework to determine those assets that
should be acquired; held; and potentially disposed of by Council.
In September 2014 Council officers engaged the Property Group to undertake a strategic
review of Council’s asset portfolio with a view to informing the production of a property
strategy. To assist in the decision making process the Property Group suggested the Council
split its asset into core and non-core assets. Essentially those properties that have been
designated as core or strategic need to be maintained in a state ‘fit for purpose’ and
renewals funded. This does not mean those properties classified as non-core will necessarily
be disposed of but does mean they need to be assessed for organisational and community
benefit.
The Property Strategy provides a process that facilitates this evaluation against a series of
10 key criteria those being.
Strategic relevance – has the property been identified as being strategically
relevant?
Core business – does the property contribute to the core business of Council?
Location – is the property in the correct location?
Sufficiency – is the property sufficient for delivering the service?
Functionality/Utility – is the property in a good state of repair and ‘fit for purpose’?
Utilisation – is the property well-utilised/accessible for its purpose?
Provision – is the property the only one of its kind or are other options available?
Cost efficiency – is the property cost effective?
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Return on investment – does the property provide a good ROI?
Cost – what is the cost of maintaining the property in a state fit for purpose?
Following evaluation against the matrix, but prior to potential disposal a report relating to
those properties failing to meet the minimum criterion will be brought in front of Council for
direction. Should disposal be confirmed those properties to be disposed of will be subject to
an individual marketing / disposal strategy designed to maximise return on the particular
asset.
Furthermore if following evaluation recommendations are required regarding future
investment in an asset, these will be presented to Council and recommended to form the
Long Term Plan 2018-2028.
What defines core and strategic properties?
Notwithstanding the current range of assets, it is important at this point to pose the
question. ‘
What property assets need to be held by Council to enable it to fully meet its
regulatory and legislative obligations, both as defined in the LGA and as expressed in the
wishes of its local communities?’
Under Section 14 of the LGA Council has an obligation as a local authority to act in
accordance with a number of principles many of these have relevance for Council’s property
functions for example, the obligations for Council.
To conduct its business in an open transparent, and democratically accountable
manner;
To make itself aware of, and have regard to, community views;
To undertake commercial transactions in accordance with sound business practices;
and
To ensure prudent stewardship and the efficient and effective use of resources.
The LTP defines the activities that Council has committed to undertake and the associated
outcomes it has agreed with the community (community outcomes). In particular the
following matters are relevant.
1.
The LTP outlines a key set of objectives for individual and community benefit from a
range of real property assets.
2.
Councils Investment Policy proposes a hierarchy of priorities that directly relate to
how real assets should be held that being to:
i. Minimise the risk of loss
ii. Ensure planned expenditures are not hindered by a lack of funds
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iii. Maximise returns from investment.
3.
Council’s Significance Policy, which is part of the LTP and is a requirement of Section
90 of the Act, defines which assets are considered to be Strategic Assets.
Table 1: Strategic Assets drawn from Strategic Asset Review (Property Group, Sep
2014)
Service Area
Asset
Recreation
Public cemeteries
Land transport
Roading system as a whole
Water supply
Water supply system as a whole
Wastewater disposal
Waste water drainage system as a whole
Solid waste disposal
Hokio landfill
Libraries
Levin library – Te Takere
Property
Pensioner flats as a whole
Storm-water
Each storm-water drainage system as a whole
Property Classifications
Officers have reviewed the initial list provided by the Property Group and have made some
revisions most obviously this has been the movement of Civic Buildings from non-core to
core and none-core on the basis of its emergency management function.
It is important to note at this point that property classified as core provision may not remain
so following changes in regulation; legislation; Council’s strategic priorities; or some other
driver including exposure to the acquisition and disposal matrix facilitated by the Property
Strategy. Similarly what might be classed as non-core currently could become core as a
result of the same drivers.
It is also important to understand that a classification of non-core does not automatically
mean that the relevant property/facility should or can be disposed of as a range of other
factors come into play. For instance though endowment land might be classified as non-core
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it may not be possible to dispose of it legally or without significant additional legal costs. In
this regard it may not be feasible to dispose of some classifications of land at all. Similar
provisions relate to gazetted land under the Reserves Act, and will also apply to those areas
fulfilling important roles in delivering HDC’s service related outcomes established by the LTP
and other strategic Council documents.
Table 2: Property Classifications drawn from Strategic Asset Review (Property Group, Sep
2014)
High Level
Category of Property
Reason for Classification
assessment
Core
Drainage & Sewage
Core
Core infrastructure
LTP LOS. Currently LA’s are
Cemeteries
Core
the only organisations that
can provide burial grounds
Public Swimming pools
Core
LTP levels of service
Public Health Act and levels
Public Toilets
Core
of service relating to the LTP
Solid Waste
Core
Core infrastructure
Core & non-core
Car parking
Core & non-core LTP Levels of Service
Community Halls
Core & non-core LTP Levels of Service
Community Centres Sports &
LTP Levels of Service
Core & non-core
Cultural
Some required for cost-
Depots
Core & non-core effective operation of
services.
Libraries (including Te Takere)
Core & non-core LTP LOS. No other provider
Miscellaneous properties
Core & non-core LOS (variable)
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Reserves & Parks
Core & non-core LTP Level of service
Road reserve and walkways
Core & non-core LTP levels of service
Office space is not core but
Civic Buildings
Core & non-core emergency management is.
None- core
Commercial buildings and Land
Non-core
Not core business
Endowment
Non-core
Not core business
Forestry
Non-core
Not core business
Motor Camps
Non-core
Not core business
Pensioner Flats
Non-core
Not core business
Rental Houses
Non-core
Not core business
Focal Point
Non-core
Not core business
Rural Leases
Non-core
Not core business
Subdivision
Non-core
Not core business
Overview of Horowhenua District Councils Property Holdings
Based on the above information it is possible to identify an approximate value for the assets
in each of the three broad property categories. However it is important to note that the
analysis should only be used as a high level indication of those properties in each category
and their possible value. The values included in the assessment were sourced from draft
valuation numbers based on IPSAS 16 and 17 valuations as at June 2014. The values are
rounded to the nearest $1,000.
Table 3: Summary of HDC property holdings by classification.
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Category of Property
Combined Value
Core properties
$22,768,000
Categories containing both core and non-core
$50,991,000
properties
Non-core properties
$27,782,000
Total
$101,541,000
It can be seen from the above summary that approximately 27% of Council’s property
portfolio may not be delivering in respect of its strategic plan or community outcomes, with
a further 50% that may or may not be contributing to its outcomes. Considering Council’s
desire to maximise its return on assets and reduce debt there is a pressing need to
rationalise its property portfolio.
Summary
Council by reason of the services it provides and legislation, particularly the Local
Government Act, needs to hold and maintain property. The property portfolio held by
Council is significant at about $101,541,000 (IPSAS 16 & 17 valuations). Whilst Council holds
a significant property portfolio there is a need to ensure it meets the Councils Investment
Policy that being to:
a.
Minimise the risk of loss
b.
Ensure planned expenditures are not hindered by a lack of funds
c.
Maximise returns from investment.
Initial evaluations suggest that 27% of Council’s property asset may not be delivering on its
outcomes and a further 50% may or may not be delivering on those outcomes. In addition
HDC’s property holdings and maintenance thereof, together with the services delivered
from those premises will have a significant effect both on debt and the level of rates
contributions.
The requirement under the provisions of the Local Government Act (Amendment) that
requires Council “
to meet the current and future needs of communities for good quality local
infrastructure, local public services, and performance of regulatory functions in a way that is
the most cost effective for households and businesses” infers that Council should assess
what assets and property need to be held to deliver ‘good-quality’ infrastructure and
services. To achieve this in a ‘cost-effective’ manner it is obligatory on Council to develop a
policy to determine those properties crucial to delivering its infrastructure and services, and
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potentially divest itself of those not contributing to its outcomes, or doing so in an
uneconomic way.
Proposed Property Strategy Evaluation Process
In order to provide some transparency in determining whether a non-core property asset
should be retained or disposed of it is necessary to
(a) determine the strategic value of the property (Appendix 2: Property Disposal Decision
Matrix), and
(b) assess it according to a standard set of criterion (Appendix 3: Criteria for Land
Acquisition or Disposal).
It is via this process that the relative benefits of retaining the property can be measured.
Should the evaluation suggest the asset be a candidate for disposal the feasibility factors will
be evaluated via the
Feasibility Factors in Property Disposal (Appendix 4) and it will be
disposed in line with the
Property Disposal Process (Appendix 5). Alternatively should there
be good reason to acquire the property it will be done so via the
Property Acquisition
Process (Appendix 6).
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APPENDIX 1: Properties Identified for Sale via Council Resolution (05.08.2015)
Location
Legal Description
Status
Group 1 Properties
82 Oxford Street Levin
Lot 33 DP 2175
HDC
Strip on Johnston Street, Foxton
Sec 652 Town of Foxton
Sold
Main Street Service Lane, Foxton
Lot 2 DP459341
HDC
Depot House, Hokio Beach Rd.
Lot 2 DP48902
HDC
Former drainage reserve Trafalgar St.
Lot 42 DP 18132
HDC
Adjacent to Boys Brigade, Foxton Beach
Lot 695 DP18833
HDC
Durham car-park, Levin
Lot 2 DP 348886
Sold
Group 2 properties
Albert Road (ex tip site), Tokomaru
Lot 3 DP 318638
Sold
Unformed part of Brown Street ,
Sec 3 SO 36234
HDC
Shannon
Unformed part of Brown Street ,
Sec 11 SO 36234
HDC
Shannon South
Part of Buckley Rd, Shannon
Sec 25 Blk XV Robinson
HDC
SD
Part of Buckley Rd, Shannon
Sec 29 Blk XV Robinson
HDC
SD
Part of Buckley Rd, Shannon
Sec 30 Blk XV Robinson
HDC
SD
Part of George St, Shannon
Sec 9 SO 36234
HDC
Part of George St, Shannon
Sec 10 SO 36234
HDC
27 Futter St, Foxton
Lot 12 DP 1779
Sold
72, Cambridge Street Industrial Site
Lot 2 DP361271
HDC
Tararua Road Industrial, Levin
Lot 2 DP308918
HDC
8 Montgomery Street (leasehold land)
Sec 6 Blk Xiv, Levin
Sold
APPENDIX 2: Property Disposal Decision Matrix
Deal with Section 40 PW Act
Has the property undergone a change
YES
implications before taking any
of use from a public work to a non-
further action
public work purpose, for which
Section 40 PW Act implications will
need to be addressed?
NO
Is the property currently being held
and utilised for a core
YES
purpose/activity?
NO
Does the property meet all criteria?
1. Strategic
Is the property being held for
2. Core
future use for a core
3. Location
YES
purpose/activity? (Landbanking
4. Sufficiency
YES
for a core purpose/activity)
5. Functionality/utility
6. Utilisation
7. Provision
8. Cost effective
9. Return on investment
NO
10.
Cost
NO
Is the property being held to initiate
YES
development in the future (Land-
banking to initiate future
Can the property be practically and
development)
economically modified to meet the
YES
Include upgrade, subdivision or
YES
RETAIN THE PROPERTY
essential performance criteria, and is
other modification in the Activity
Is there an approved landbanking
this the best option?
Plan
strategy for the property and, if
NO
NO
held for a core activity is the need for
future land identified in the Activity
Plan?
NO
YES
YES
NO
Is it necessary to secure a
Is the approved landbanking
NO
Is the property required by Council for
replacement property before the
strategy still valid?
another use?
property (or part) could be
disposed of?
YES
NO
YES
NO
For properties that have been
Are there future opportunities that
YES
NO
landbanked to initiate future
mean the property should not be
Retain until replacement has
YES
development, would the sale of all or
YES
declared surplus?
been secured
part of the property to a private party
(subject to appropriate
covenants) achieve the purpose for
NO
NO
which it is being held?
RETAIN THE PROPERTY.
NO
Is it practically; legall NO
y; s
ocially;
NO
NO
environmentally; culturally
CANDIDATE FOR DISPOSAL
And economically feasible to
dispose of the property?
YES
RETAIN the property under a
CANDIDATE FOR DISPOSAL
regime to optimise returns and
minimise holding costs
APPENDIX 3: Criteria for Land Acquisition or Disposal
Measures/Scores
Criterion
STRATEGIC RELEVANCE:
10 - The property is required to meet Council’s strategic
priorities.
Is the function the property will fulfil
identified as a strategic priority for
5 – The property provides the most cost-effective option of
Council, or is subject of a Council
several required to achieve Council’s strategic priorities.
resolution?
1 – The property is one of several options that could meet Council’s
strategic priorities.
CORE BUSINESS:
10 – Core Council business
Is the function the property will fulfil
5 – not core Council business but desirable and no one else is supplying
core Council business?
the service
1 - service could be provided by the private or voluntary sector
LOCATION:
5 - The location is ideal
In terms of the purpose for which the
4 - The location is good to very good
property is held and utilised:
3 – The location is good
2 - The location is acceptable, but could be better
1 - The location is poor. There is only a marginal requirement
for the property asset in this location, and/or the location
causes some dysfunction in the use of the property
(Note that if a property is rejected on the basis of location, it is
assumed that a better location is possible)
SUFFICIENCY:
5 - The site and improvements are large enough and have
sufficient additional land to accommodate future
Is the property sufficiently large to
development (10-20%)
accommodate the service and
facilitate growth as required?
4 - The site and improvements are large enough for the current
purpose
3 - The site and/or the improvements are too small, but this can
be readily accommodated by improvements costing less
than 20% of CV, or acquiring adjacent land.
2 - The site and/or the improvements are too large (>20% than
required).
1 - The site and/or the improvements are too small but this
can be mitigated by improvements costing less than
30% of CV, or acquiring land in close proximity.
Note: “Ideal size” incorporates room for future growth where
applicable
FUNCTIONALITY/UTILITY:
5 - The functional utility of the land and improvements is
estimated to be within 90% of that exhibited by a new asset
Is the property fit for purpose?
designed and built specifically for the purpose
Notes:
4 - The functional utility of the land and improvements is
estimated to be within 75% to 90% of that exhibited by a
“Depreciation” is loss in value
new asset designed and built specifically for the purpose
from any cause. The two main
components are physical
3 - The functional utility of the land and improvements is
depreciation and obsolescence
estimated to be less than 75% of that exhibited by a new
asset designed and built specifically for the purpose, but
“Physical depreciation” is
the asset can still be practically used for the purpose
physical wearing out due
to use and natural forces
2 - Physical depreciation and/or obsolescence is
of such a degree that the usefulness of the asset is moderately
“Obsolescence” is loss in
and noticeably constrained
value from causes other
than physical decay or
1 - Physical decay and/or obsolescence is
wear. It includes
of such a degree that the usefulness of the asset is
functional, economic, legal
significantly constrained
and technological
obsolescence
UTILISATION
5 - At least 95% of the floor area and 85% of the land area are
effectively utilised for the purpose. Or the property
Is the property well-utilised?
exhibits a very high use ratio for its intended purpose.
Note:
4 - At least 85% of the floor area and land area are effectively
utilised for the purpose. Or the property has a high use
Utilisation in this regard means the
ratio for its intended purpose.
property is either (a) well utilised in
terms of physical space, or (b) the
3 - At least 70% of the floor area and land area are effectively
property attracts high use levels.
utilised for the purpose. Or the property has reasonable
use for its intended purpose.
2 - At least 50% of the floor area and land area are effectively
utilised for the purpose. Or the property has low use for
its intended purpose.
1 - Less than 50% of the floor area or land area are
effectively utilised for the purpose. Or the property
is infrequently used in terms of its intended
purpose.
Note: The percentage utilisation estimated can include an
allowance for future growth
PROVISION:
5 – The service fulfils local need there is no other provision locally
Is the property/service already provided 3 – The service/property will need to be provided temporarily but
elsewhere locally by Council or another may be provided by others or from another property longer-term
provider?
1-The service/property is already provided locally or can be provided
locally
COST EFFICIENCY:
5 - No, the function cannot be practically provided in a more
cost-effective manner
Can the function be provided in a
more cost-effective manner, and is
3 - It may be possible to practically provide the function in a
it practical to do so?
more cost-effective manner
1 - Yes, the function can be practically provided in a more cost-
effective manner
RETURN ON INVESTMENT:
5 - The financial return from the property is equal to or exceeds a
Does the function achieve a good return fair market return. Or delivers expected returns in line with
on investment in terms of economic
Council policies.
return or strategic outcomes?
4 - The financial return from the property is between 90% and
100% of the fair market return or expected returns in line with
Council policies.
3 - The financial return from the property is between 75% and
90% of the fair market return or expected returns in line with
Council’s policies
2 - The financial return from the property is between 50% and
75% of the fair market return or expected returns in line with
Council policies.
1 - The financial return from the property is less than 50% of the
fair market return or expected returns in line with Council
policies.
CAPITAL COSTS:
5 – IEA greater than 67% of NBS; or capital costs are < 6% OF
CV over the next ten years.
What are the capital costs required to
maintain the property in a state fit for
4 – IEA greater than 34% of NBS; or capital costs are between
purpose?
6-10% of CV over the next ten years.
3 – Seismic strengthening to 67% of NBS less than 20% of
CV; or capital costs are between 11-15% of CV over the
next ten years.
2 – Seismic strengthening to 34% of NBS less than 20% of
CV; or capital costs are 16-20% of CV over the next ten
years.
1 – Seismic strengthening to 34% of NBS is less than 30% of
CV; or capital costs are >20% of CV over the next ten years.
Essential Performance Criteria
Properties would fail the retention/acquisition criteria if they show :
1. A cumulative score less than 35
2. Any 2 or more criteria ranking as 1 or less
3. Any 4 or more criteria ranking as 2 or less
Landbanking
Landbanking for future use for
For the property to meet the criteria for landbanking for a
a core activity/purpose
future core activity/purpose, the following needs to apply.
1. The future need for the land/buildings has to be
identified in the relevant activity plan
2. There needs to be an approved landbanking
strategy for the specific property asset, in the
form of a recommendation to landbank the
property, with supporting arguments and
evidence, signed off by the relevant Activity
Manager and approved by the CEO/Council
resolution
3. If the landbanking strategy is more than two years
old, the Activity Manager needs to confirm that it
is still current/valid
Landbanking to initiate future
The basis for this category of landbanking is to secure
development
land to initiate development that will be beneficial for the
community, but which is not otherwise being initiated by
the private sector. It is envisaged that Council’s role in
this form of advance purchase would generally be one of
initiation or facilitation on a case by case (usually short-
term) basis.
For the property to meet the criteria for landbanking to
initiate future development, the following needs to apply.
1. There needs to be an approved landbanking
strategy for the specific property asset, in the
form of a report and recommendation to landbank
the property. As a minimum the report should
contain supporting arguments, evidence and a
risk assessment. The recommendation should be
signed off by the Activity Manager and be
approved by the CEO/Council resolution
2. If the landbanking strategy is more than two years
old, the Activity Manager needs to confirm that it
is still current/valid
For properties that have been landbanked
There may be grounds to release land that
to initiate future development, determining
has been landbanked to initiate future
whether the sale of all or part of the
development, if its sale would achieve the
property to a private party (subject to
purpose for which it is being held.
appropriate covenants) would achieve the
purpose for which it is being held
The test as to whether this applies is to
determine the outcome that best achieves
the “well-beings” described in Section
10(a) of the Local Government Act 2002:
“to promote the social, economic,
environmental and cultural well-being of
communities, in the present and for the
future”
APPENDIX 4: Feasibility Factors in Property Disposal
CANDIDATE
FOR
DISPOSAL
Is it practically,
legally, socially, environmentally,
culturally and economically
feasible to dispose of the
Are there other reasons that
RETAIN the property under a
property (or the surplus part)?
justify disposal
regime to optimise returns and
NO
eg. future sustainability
NO
minimise holding costs
YES
YES
DISPOSE of the property via an
approved disposal strategy
Feasibility Factors in Property Disposal
• Are there are any issues with the underlying status of the land that may constrain or preclude disposal eg. land
subject to the Reserves Act, endowments or trusts?
• If subdivision is necessary to separate the part of the property that is surplus, whether this is legally, practically and
economically feasible?
• Whether the impact of Section 40 of the Public Works Act 1981 constrains the potential disposal?
• Whether it is economic to dispose of the property? The costs of disposal need to be compared with the estimated
sale price plus the net present value of ongoing holding and administrative costs
• Whether there are any other physical matters that may constrain the ability to dispose of the property eg. contamination
• Whether there are any consultation requirements that may constrain the ability to dispose of the property eg.
associated with road stopping and the disposal of strategic assets
• Whether there are any other social, environmental or cultural issues that may constrain the ability to dispose of
the property
APPENDIX 5: The Property Disposal Process
Determine whether consultation is required
under legislation. If so, undertake in an
appropriate manner
If after CAND
any IDA
nec T
es E
sary consultation the
decision is sFOR
till to dispose of the property,
obtain an D
y IrSPOSAL
equired i nternal approvals and
declare the property surplus to requirements
Undert CAND
ake a I
f DA
or TE
mal investigation under
Section 40 o FOR
f the
PW Act 1981 and action
accordi D
ngl I
ySPOSAL
(NB. sp
ecific process defined
elsewhere)
If/when CAND
the pr IDA
ope T
rt E
y is released from the
Section 40 FOR
proc
ess (ie. exempt from offer
back or o D
ffeIrSPOSAL
to forme r owner not accepted)
prepare a strategy for disposal of the
property on the open market. Obtain
approval of the strategy
The pro CAND
cess of IDA
dev T
e E
l
oping the property
disposal strat FOR
egy should include
determining:
DISPOSAL
1. The type(s) and nature of the property
product(s) being offered for sale and
the target market(s)
2. How the property might best be
presented for sale, including physical,
legal, and financial presentation, and
the information to be provided
3. The best method of promotion of the
property to the target market(s)
4. The role of pricing (ie. price or no-price)
and the most appropriate method of sale
5. The process for selecting and appointing
agents - where applicable
Action the approved strategy
Appendix 5: Property Acquisition F l o w c h a r t
1.Identify the Need
Identify the need for the property and the timing of the required purchase
(the need will usually be generated from within the relevant Activity Group)
2. Confirm the Need
Confirm C
( A
A
c N
ti D
vitIDA
y MT
a E
n
ager ) the need for the property, congruence with LTCCP
and/ FO
or R
An
nual Plan, and obtain budget and purchase approval
3. The Brief
Prepare C
( A
P N
rojD
e IDA
ct S T
p E
o
nsor ) property purchase brief to arrange purchase of the
FOR
property
Confirm C
( A
Pr N
o D
pe I
rDA
ty T
M E
a
nager or Acquisition Consultant ) acceptance of the brief
and associat FO
ed i R
n
structions/terms (subject to any necessary modifications), set
up the prD
ojISP
ect O
a SAL
nd a gree a regular reporting regime with the Project Sponsor
4. Purchase Strategy
Develop C
s A
tr N
at D
e I
gDA
y a T
n E
d tactics for purchase of the property (to be progressively
FO
m R
odified as more detailed information is obtained)
5. Due Diligence Investigations
Undertake C
A
pr N
o D
peIrDA
ty T
d E
u
e diligence investigations including:
Physical - phyFO
sic R
a
l inspection and any specialist reports required eg.
geotechnic
D
al I
, SP
ha O
z SAL
ards, condition of buildings and structures, services and
infrastructure, boundaries/survey etc.
Note: There will be overlaps
Legal - Title/tenure, RMA and District Plan requirements, LIM report
between steps 4, 5 and 6
Financial - property income and expenditure
Market - market investigations including obtaining an independent registered
valuation to support the purchase
6. Purchase Negotiations
Negotiate purchase with the Vendor(s) - price, terms and conditions
7. Agreement Documentation
Arrange for draft agreement to be prepared. Agree on final content and wording
8. Execution of Agreement by Vendor
W herever possible, have the agreement
executed by the Vendor first, as an offer to sell to Council. (This may change
subject to the purchase strategy, particularly if the property has already been
listed for sale with an agent)
9. Report and Recommendation,
Prepare report in agreed format with purchase recommendation. Execute
Execution of Agreement by Council
agreement in line with delegated authority procedures following approval of
report
10. Advance Property Management
Enter property in database once agreement is unconditional and ensure ongoing
Actions
management regime is in place. Notify insurer/insurance register
11. Settlement
Complete settlement. Ensure compensation certificate is registered on title for
partial purchases under the PW Act
12. Legalisation
Undertake all relevant legalisation actions eg. gazettal
