Agenda of Investment and Property Subcommittee

Investment and Property Subcommittee

24 November 2021

Investment and Property Subcommittee Agenda

Meeting to be held Remotely

36 Water Street, Whangārei

on Wednesday 24 November 2021, commencing at 1.00pm

Recommendations contained in the agenda are NOT decisions of the meeting. Please refer to minutes for resolutions.

MEMBERSHIP OF THE Investment and Property Subcommittee

Chairperson, NRC Councillor, Rick Stolwerk

Ex-Officio Penny Smart	Councillor Justin Blaikie	Councillor Colin Kitchen
Councillor Jack Craw	Councillor Terry Archer	Independent Consultant Jonathan Eriksen
Independent Audit & Risk Advisor Danny Tuato'o	Independent Advisor Stuart Henderson

KARAKIA / WHAKATAU

RĪMITI (ITEM) Page

1.0 Ngā Mahi Whakapai/Housekeeping

2.0 Ngā Whakapahā/apologies

3.0 Ngā Whakapuakanga/declarations of conflicts of interest

4.0 Ngā Whakaae Miniti (Confirmation of Minutes)

4.1 Confirmation of Minutes - Investment and Property Subcommittee 29 September 2021 4

5.0 Receipt of Action Sheet

5.1 Receipt of Investment and Property Subcommittee Action Sheet 9

6.0 Reports

6.1 Changes to Property Management Plan and Investment Policy 13

7.0 Kaupapa ā Roto (Business with the Public Excluded) 17

7.1 Confirmation of Confidential Minutes - Investment and Property Subcommittee meeting 29 September 2021

7.2 Introduction of Pencarrow VI Fund into the Long-Term Fund Investment Fund

7.3 Investment strategy for the proceeds from the sale of the Kensington Development

7.4 Update on Council’s Current Property Redevelopments

7.5 Sale of an Industrial Area Property

Investment and Property Subcommittee item: 6.1

24 November 2021

TITLE:	Changes to Property Management Plan and Investment Policy
From:	Bruce Howse, Pou Taumatua – Group Manager Corporate Services
Authorised by Group Manager/s:	Bruce Howse, Pou Taumatua – Group Manager Corporate Services, on 10 November 2021

Executive summary/Whakarāpopototanga

Council has been approached by community groups seeking support to purchase property for public ecological, recreational or amenity benefits. Recent examples include Kauri Mountain and Ngunguru Sandspit. Council does not have a specific policy on purchase of property for these purposes, although the Property Management Plan contains a reference to purchase of property for ‘environmental improvement of the region’. Purchase of property for these purposes is not explicitly aligned with the levels of service contained in the Long Term Plan 2021-2031 .

Changes are recommended to the Property Management Plan and Investment Policy to clarify Council’s position on the purchase of property for environmental purposes.

The recommended changes are summarised as:

· Council also owns or acquires property for reasons other than gaining a return on investment. This includes property purchases to achieve flood mitigation, strategic, operational / service delivery and economic development objectives.

· Council does not acquire property for the purpose of providing public ecological, recreational or amenity benefits on the basis that these outcomes are provided by other agencies with specific functions related to providing these services.

Recommendation(s)

1. That the report ‘Changes to Property Management Plan and Investment Policy’ by Bruce Howse, Pou Taumatua – Group Manager Corporate Services and dated 28 October 2021, be received.

2. That the subcommittee endorse the changes to the Property Management Plan and Investment Policy as described in this report and recommend to Council the adoption of the changes.

Options

No.

Option

Advantages

Disadvantages

Makes the recommended changes to the Property Management Plan and Investment Policy.

More closely aligns the plan and policy with the levels of service contained in the Long Term Plan 2021-2031.

Clarifies Council’s objectives for property purchase.

Saves resources on engaging with stakeholders that approach council to purchase property that is outside the plan and policy scope.

Limits the scope of what council will acquire property for. However, the scope exclusion is not a core function of council, and neither is the scope exclusion closely aligned with the levels of service contained in the Long Term Plan 2021-2031.

However, Council can at any time in the future review the Property Management Plan and Investment Policy settings.

Do not make the recommended changes to the Property Management Plan and Investment Policy.

No policy limitations on the purpose for which council can purchase property.

Council’s policy for property purchase lacks clarity.

The staff’s recommended option is 1.

Considerations

1. Environmental Impact

Nil.

2. Community views

The community has not been consulted on this issue and their views are unknown.

3. Māori impact statement

Māori have not been consulted on this issue and their views are unknown.

4. Financial implications

Nil.

5. Implementation issues

Nil.

6. Significance and engagement

In relation to section 79 of the Local Government Act 2002, this decision is considered to be of low significance when assessed against council’s significance and engagement policy because it is part of council’s day to day activities. This does not mean that this matter is not of significance to tangata whenua and/or individual communities, but that council is able to make decisions relating to this matter without undertaking further consultation or engagement.

7. Policy, risk management and legislative compliance

The recommendations contained in this paper are consistent with policy and legislative requirements.

The risk associated with the recommendations contained on this paper is considered immaterial, noting that Council can at any time in the future review the Property Management Plan and Investment Policy settings.

Background/Tuhinga

Council has been approached by community groups seeking support to purchase property for public ecological, recreational or amenity benefits. Recent examples include Kauri Mountain and Ngunguru Sandspit. Council does not have a specific policy on purchase of property for these purposes, although the Property Management Plan contains a reference to purchase for ‘environmental improvement of the region’. Purchase of property for these purposes is not explicitly aligned with the levels of service contained in the Long Term Plan 2021-2031.

Changes are recommended to the Property Management Plan and Investment Policy to clarify Council’s position on the purchase of property for these purposes.

The proposed changes to the Property Management Plan and Investment Policy are shown as strikethroughs (for proposed deleted text) and underlined (for proposed additional text) in the following:

Property Management Plan (Pg 2)

The Property Management Plan provides for the acquisition and disposal of commercial property investments and the pursuance of redevelopment opportunities that can deliver positive financial returns for council and contribute to Investment Strategy objectives. Priorities for investment property are as follows:

• Hold, acquire, sell and redevelop investment properties, with a portfolio perspective, for cash and non-cash returns to Council and the Northland community;

• Hold assets on behalf of the Northland community for the strategic protection, development and economic ~~and environmental~~ improvement of the region;

• Provide a revenue stream to be available to fund Council work programmes and projects;

• Achieve the best possible return subject to the powers and provisions of the LGA, Public Bodies Leases Act 1969 and the Property Law Act 2007;

• Meet statutory obligations in relation to endowment properties.

Property Management Action Plans (Pg 3)

The Property Management Action Plan for each investment property category is as in the appendices:

• Whangarei’s Industrial Area.

• Whangarei’s CBD and Hihiaua Precinct.

• Redevelopments – properties being redeveloped and re-tenanted.

Investment in commercial property across Northland is encouraged. The action plans do not preclude Council from acquiring, disposing or redeveloping investment properties anywhere in Northland.

Council also owns or acquires owner occupied property (property held for council’s service delivery objectives), Mount Tiger Forest, and property investments for flood schemes and to achieve ~~environmental, biosecurity and~~ regional development objectives. These have their own asset management plans. Council does not acquire property for the purpose of providing public ecological, recreational or amenity benefits on the basis that these outcomes are provided by other agencies with specific functions related to providing these services.

Investment Policy

Property

Variable returns on property include rents and lease income, and changes in capital value.

In respect of leasehold land, subject to the powers and provisions conferred under the LGA, Public Bodies Leases Act 1969 and the Property Act 2007, the sale of any ground leases and approval of lease discounts^[1] require council approval.

The council will follow the legal obligations and restrictions on the council in disposing of any endowment property. These are outlined in the LGA, s140-141.

Risks associated with holding investment property are minimised by undertaking regular reviews of the property portfolio to ensure objectives are being met. The council seeks professional advice regarding these investments when appropriate.

Council also owns or acquires property for reasons other than gaining a return on investment. This includes property purchases to achieve flood mitigation, strategic, operational / service delivery and economic development objectives. Council does not acquire property for the purpose of providing public ecological, recreational or amenity benefits on the basis that these outcomes are provided by other agencies with specific functions related to providing these services.

Attachments/Ngā tapirihanga

Nil

Investment and Property Subcommittee ITEM: 7.0

24 November 2021

TITLE:

Business with the Public Excluded

Whakarāpopototanga / Executive Summary

The purpose of this report is to recommend that the public be excluded from the proceedings of this meeting to consider the confidential matters detailed below for the reasons given.

Ngā mahi tūtohutia / Recommendations

1. That the public be excluded from the proceedings of this meeting to consider confidential matters.

2. That the general subject of the matters to be considered whilst the public is excluded, the reasons for passing this resolution in relation to this matter, and the specific grounds under the Local Government Official Information and Meetings Act 1987 for the passing of this resolution, are as follows:

Item No.	Item Issue	Reasons/Grounds
7.1	Confirmation of Confidential Minutes - Investment and Property Subcommittee meeting 29 September 2021	The public conduct of the proceedings would be likely to result in disclosure of information, as stated in the open section of the meeting -.
7.2	Introduction of Pencarrow VI Fund into the Long-Term Fund Investment Fund	The public conduct of the proceedings would be likely to result in disclosure of information, the withholding of which is necessary to enable council to carry out, without prejudice or disadvantage, commercial activities s7(2)(h).
7.3	Investment strategy for the proceeds from the sale of the Kensington Development	The public conduct of the proceedings would be likely to result in disclosure of information, the withholding of which is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information s7(2)(b)(ii).
7.4	Update on Council’s Current Property Redevelopments	The public conduct of the proceedings would be likely to result in disclosure of information, the withholding of which is necessary to enable council to carry out, without prejudice or disadvantage, commercial activities s7(2)(h) and the withholding of which is necessary to enable council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations) s7(2)(i).
7.5	Sale of an Industrial Area Property	The public conduct of the proceedings would be likely to result in disclosure of information, the withholding of which is necessary to enable council to carry out, without prejudice or disadvantage, commercial activities s7(2)(h) and the withholding of which is necessary to enable council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations) s7(2)(i).

3. That the Independent Financial Advisors be permitted to stay during business with the public excluded.

Considerations

1. Options

Not applicable. This is an administrative procedure.

2. Significance and Engagement

This is a procedural matter required by law. Hence when assessed against council policy is deemed to be of low significance.

3. Policy and Legislative Compliance

The report complies with the provisions to exclude the public from the whole or any part of the proceedings of any meeting as detailed in sections 47 and 48 of the Local Government Official Information Act 1987.

4. Other Considerations

Being a purely administrative matter; Community Views, Māori Impact Statement, Financial Implications, and Implementation Issues are not applicable.

[1] Which may be used to incentivise lessees to adopt short rent review periods

TITLE:	Confirmation of Minutes - Investment and Property Subcommittee 29 September 2021
From:	Judith Graham, Corporate Services P/A
Authorised by Group Manager/s:	Bruce Howse, Pou Taumatua – Group Manager Corporate Services, on

TITLE:	Receipt of Investment and Property Subcommittee Action Sheet
From:	Judith Graham, Corporate Services P/A
Authorised by Group Manager/s:	Bruce Howse, Pou Taumatua – Group Manager Corporate Services, on