Waterfront Auckland (Auckland Waterfront Development Agency Limited)

Statement of Intent

for the period from 1 July 2013 to 30 June 2016

Adopted by Waterfront Auckland Board on 26 June 2013

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Tamaki – kainga nga ika me nga wheua katoa!

Auckland – where the fish are so succulent you can eat them bones and all!

This proverb alludes to the once abundant and sought after marine resources of Auckland’s waterfront. It signals Waterfront Auckland’s desire to create a sustainable waterfront providing for the current and future generations of Aucklanders. A place all Aucklanders can access the Waitemata Harbour for recreation, business or cultural practices.

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Waterfront Auckland Statement of Intent for the period from Project Title 1 July 2013 to 30 June 2016 U:\CCO\Waterfront Development Agency\Finance\SOI and AP File Name / Path extract\2013-2016 SOI\2013.06.25 SOI 2013-2016 - FINAL.docx Version No. 5.0 Status Final Document Author Aimee Comer

History

Version Issue Date Author Notes / Changes 1.0 13.12.12 A. Comer 2.0 19.02.13 A. Comer Board feedback incorporated 3.0 28.02.13 A. Comer Further Board feedback incorporated 4.0 19.06.13 A. Comer Shareholder feedback incorporated 5.0 25.06.13 A. Comer Final Board amendments incorporated

Document Review

Name Signature Date Stephen Rainbow (GM Strategy) 17.06.2013 John Dalzell (CEO) 19.02.2013 Waterfront Auckland Board 26.02.2013 Auckland Council CCO Monitoring Unit 30.04.2013

Document Approval

Name Signature Date John Dalzell 24.06.2013 Waterfront Auckland Board 26.06.2013

Glossary

Abbreviation / Term Description ACIL Auckland Council Investments Limited ACPL Auckland Council Property Limited AP Auckland Plan AT Auckland Transport Auckland Tourism, Events & Economic ATEED Development Limited

Glossary cont’d

Abbreviation / Term Description CCO Council Controlled Organisation CCMP City Centre Master Plan CEO Chief Executive Officer FRS Financial Reporting Standards IMSB Independent Maori Statutory Board LOE Letter of Expectation LTP Long-term Plan MRP Maori Responsiveness Plan NZTA New Zealand Transport Agency RFA Regional Facilities Auckland SD Strategic Direction SEG Shareholder Expectation Guide SOI Statement of Intent Watercare Watercare Services Limited Auckland Waterfront Development Agency Waterfront Auckland Limited

Contents

1. Executive Summary ...... 6 2. Introduction ...... 9 3. Strategic Direction ...... 11 4. Nature and Scope of Activities ...... 14 5. Performance Measurement and Reporting ...... 21 6. Approach to Governance ...... 34 7 Organisational Health, Capability and Risk Management ...... 39 8 Accounting Policies ...... 42

Attachments

Attachment 1: Waterfront Auckland Public Charter Attachment 2: Area of Ownership and Influence Attachment 3: Contribution to Council Objectives Attachment 4: Performance Measures Attachment 5: Assets Attachment 6: Description of Strategic Projects Attachment 7: Map of Strategic Projects Attachment 8: Contribution to Maori Outcomes Attachment 9: Accounting Policies

1. Executive Summary

Introduction

1.1. Waterfront Auckland is an Auckland Council Controlled Organisation (CCO) set up to develop the Auckland waterfront as a location specific development agency.

1.2. Waterfront Auckland leads the delivery of the revitalisation of the waterfront as a key destination and location for businesses, residents and visitors; and assists Auckland Council in uniting the waterfront with the city centre. These actions assist in the development of central Auckland as a creative and vibrant world city.

1.3. Waterfront Auckland has a mix of commercial and public good objectives and receives revenue from a variety of sources. It has service delivery functions as well as being an owner and operator of commercial assets.

1.4. This Statement of Intent (SOI) describes the accountability of the Waterfront Auckland Board of Directors to its Shareholder, Auckland Council, for the period from 1 July 2013 to 30 June 2016. It sets out the nature and scope of our activities, the strategic direction, and projects that will be delivered over the next three years. It also shows how Waterfront Auckland proposes to measure its performance in contributing to Auckland Council’s strategic directions as specified in the Auckland Plan.

Key strategic aspects highlighted

1.5. In support of the Auckland Plan objectives, and to achieve the vision for Auckland’s waterfront while promoting a balance of sustainability, resiliency and productivity, a Waterfront Plan has been developed. In this plan, Waterfront Auckland sets out five goals, being the creation of a:

 Public waterfront;  Smart-working waterfront;  Connected waterfront;  Liveable waterfront; and  Blue-green waterfront.

1.6. Strategies for delivering these goals are contained in the Waterfront Plan and form the basis for the strategic content of this SOI.

1.7. These goals are supported by three business objectives: to be a successful business managed with strong commercial disciplines to ensure corporate sustainability; an innovative, sustainable organisation with highly skilled staff and efficient robust business systems; and to demonstrate excellence in customer service provision.

1.8. In essence, Waterfront Auckland’s primary strategic aims during the SOI period are to:

a) Leverage public sector investment to attract private sector equity participation that will drive sustainable growth and development, ensuring that all investment attraction initiatives are co-ordinated with the wider Council group; and

b) Implement ‘key building blocks’ that will drive transformational change on the waterfront. These include:

 Public projects – including the waterfront walkway and cycleway (Westhaven Promenade), the Shed 10 events and cruise facility, Daldy and Halsey Street upgrades, and construction of new urban realms in Wynyard Quarter; and

 Marina and Commercial Property projects - continued development of Wynyard Quarter Central Precinct with the Innovation hub, Westhaven Marine Centre, and residential and hotel development which, together with improved facilities at Westhaven Marina, will provide a showcase of innovative sustainable development and vibrant inner city living.

1.9. Under this SOI, Waterfront Auckland contributes to Auckland Council objectives through a number of strategic initiatives and projects.

Performance measurement and reporting

1.10. Non-Financial and Financial Performance Measurements are detailed in Section 5. This section also contains funding assumptions. Operational public space activities are funded by grants from Auckland Council. Public space capital works are funded through equity investment by Council. Commercial property and marina operational activities will be funded through commercial income with any shortfall covered by debt funding. Cash surpluses generated from commercial operational activities not used to reduce debt or fund capital works for commercial activities, over a threshold to be agreed annually, may be returned to the shareholder. Overheads will be allocated across each of the three areas mentioned.

1.11. The Council has set the expected rate of return on investment (ROI) on commercial waterfront activities and marinas at 8% p.a. The target takes account of Council's reasonable expectation of the returns achievable from the commercial property investment portfolio. The Council and Waterfront Auckland will work together to review the allocation and treatment of commercial property that is taken into account in the calculation of the ROI performance against the target set during 2012/2013.

1.12. The budgets for the next three years, as approved by Auckland Council, have indicative ROI values significantly below the expected ROI level of 8%. This reflects the current nature of the commercial portfolio vested in Waterfront Auckland, the timeline for scheduled developments and the loss of income associated with the redevelopment phase of existing tenanted areas. All new development schemes have a threshold ROI of 8% post completion, unless specifically authorised by Board and Council to be lower, due to intervention or other public interest initiatives.

1.13. Capital expenditure and financial forecasts are also contained in Section 5. Waterfront Auckland intends to distribute to Auckland Council funds from commercial activities that are surplus to requirement. We do not envisage making such a distribution within the period of this SOI.

1.14. The commercial value of the shareholder’s investment in Waterfront Auckland as at 30 June 2012 was $375.8 million.

1.15. Reporting to Auckland Council consists of an annual SOI, Annual Report, Half Year Report, Quarterly Reports, and additional information as required by Council.

Governance and other matters

1.16. The Waterfront Auckland Board is committed to high standards of governance and business behaviour. Governance matters are canvassed in Section 6 and cover such issues as representation, public meetings, management of strategic assets and the relationship with Auckland Council, other CCOs and stakeholders.

1.17. Risk mitigation strategies are outlined in Section 7. Note that waterfront land is a key strategic asset and the freehold interest is to be retained in public ownership. However, there are a range of commercial mechanisms to share risk and reward with the private sector. We will proactively investigate the best structure for attracting private sector equity participation across the waterfront portfolio.

1.18. We commit to maintaining a healthy and resilient organisation. Organisational Health and Capability matters are contained in Section 7 while Section 8 covers our Accounting Policies.

2. Introduction

Purpose and scope of SOI

2.1. This SOI is presented by Waterfront Auckland in accordance with the requirements of Section 64(1) of the Local Government Act 2002.

2.2. This SOI covers our operations for a period of twelve months from 1 July 2013 to 30 June 2014 in detail and the following two years to 30 June 2016 in outline.

2.3. This SOI is a public and statutory expression of Waterfront Auckland’s accountability to its shareholder, Auckland Council. It is against this document that the Board will report to Auckland Council and be held accountable. The SOI contains measures against which the performance of Waterfront Auckland can be assessed in a transparent manner.

2.4. Waterfront Auckland is not a service provider of those activities set out in Clause 9 of Appendix 8 of the Local Government Act 2002 other than as a facilitator for the installation of infrastructural works including water supply; sewerage; storm-water drainage; flood protection and the provision of roads and footpaths which will, on completion, be maintained and serviced by Auckland Council and its related CCOs.

Who we are and what we do

2.5. Waterfront Auckland, as an environmental leader, will enhance the waterfront as a more beautiful destination rich in public open spaces and activities that support successful and innovative businesses and celebrate the city's unique sea-faring and waka culture and identity.

2.6. In keeping with Auckland Council’s vision, Waterfront Auckland leads the delivery of the revitalisation of the waterfront as a key destination and location for businesses, residents and visitors; and assists Auckland Council in uniting the waterfront with the city centre. These actions assist in the development of central Auckland as a creative and vibrant world city.

2.7. Waterfront Auckland develops and maintains waterfront assets comprising public spaces, marina assets (including water-space assets) and commercial property.

2.8. Waterfront Auckland has a mix of commercial and public good objectives and receives revenue from a variety of sources. It has service delivery functions as well as being an owner and operator of commercial assets.

2.9. Waterfront Auckland has developed a Public Charter, which communicates our vision, mission, philosophy, principles and objectives (refer Attachment 1).

2.10. Our Goals for the waterfront are outlined in Section 3. These are supported by three business objectives, which shape our operation: to be a successful business managed under strong commercial and financial disciplines; to be a highly innovative, sustainable organisation with skilled staff supported by efficient and robust business systems; and to demonstrate excellence in operational areas with a major customer service provision (e.g. marina operations, rental and lease operations, car parking).

2.11. The Waterfront Plan, which was endorsed by Auckland Council in June 2012, builds on planning and consultation undertaken over many years, and sets out the 30 year strategy for the waterfront. The vision and goals are aligned with the Auckland Plan and have been confirmed by Council and the public. Achieving these goals involves a careful balancing of public and commercial objectives.

2.12. There is overwhelming public support for new public spaces on the waterfront as well as a strong desire from Council to continue to build on recent award winning achievements. The challenge is to leverage progress to date and sustain momentum post the 2011 Rugby World Cup by implementing the next phase of development as set out in the Waterfront Plan.

2.13. The implementation of the Waterfront Plan projects during the period of this SOI will deliver on these expectations by enabling a continuation of the transformational change on Auckland’s waterfront. Waterfront Auckland will leverage public sector investment to create an appropriate investment structure attracting private sector equity participation that will drive sustainable and rewarding growth and deliver a waterfront that Aucklanders can be proud of.

Area of ownership and influence

2.14. Waterfront Auckland has an:

(a) Area of Influence: a mandated area of influence stretching from the Harbour Bridge Park in the west to Teal Park in the east and as far inland as the original shoreline of 1840; and

(b) Area of Ownership: direct control and management rights over land, infrastructure and facilities within a smaller area of the waterfront

both as shown on the plan in Attachment 2.

2.15. Waterfront Auckland has two primary roles:

a) To plan, facilitate and advocate the highest quality urban development outcomes in its area of influence, and

b) To plan, manage, operate and develop land, water and public assets within its area of ownership.

2.16. Waterfront Auckland is the lead CCO to execute and implement projects in the Area of Ownership, in full co-operation with all relevant CCOs and other parties. In the Area of Influence Waterfront Auckland will cooperatively collaborate with Auckland Council (including the Waitemata Local Board), all relevant CCOs and other parties to execute and implement agreed projects.

2.17. Waterfront Auckland acknowledges that the experience for the public should be seamlessly integrated between the CCO and Auckland Council ensuring a consistent approach to service delivery. Responsive and seamless customer service will be a priority for Waterfront Auckland.

3. Strategic Direction

Shareholders purpose of CCO

3.1. Auckland Council’s general purpose for CCOs is to maximise returns from council- owned commercial assets, achieve strategic goals, and efficiently deliver core council services. The commercial structure of the CCOs helps achieve focus, efficiency, and the application of commercial acumen to the delivery of public sector outcomes.

3.2. Waterfront Auckland is considered a strategic entity by Auckland Council in its Shareholder Expectation Guide for CCOs as it was established to achieve strategic goals as set out in 3.1 above.

Auckland Plan

3.3. The Council’s vision for Auckland, as set out in the Auckland Plan, is to be the world’s most liveable city; which means that by 2040 Auckland will be:

 A fair, safe and healthy Auckland;  A green Auckland;  An Auckland of prosperity and opportunity;  A well connected and accessible Auckland;  A beautiful Auckland that is loved by its people;  A culturally rich and creative Auckland  A Maori identity that is Auckland’s point of difference in the world.

3.4. The Auckland Plan identifies 13 strategic directions to help Auckland achieve this vision. Waterfront Auckland’s contribution to these strategic directions is outlined in paragraphs 3.9 – 3.11 below.

Waterfront Plan

3.5. The Waterfront vision, as set out in the Waterfront Plan, is for a world class destination that excites the senses and celebrates our sea loving pacific culture and maritime history. It supports commercially successful and innovative businesses and is a place for all people, an area rich in character and activities that link people to the city and the sea.

3.6. To contribute to the Auckland Plan objectives, and achieve the vision for Auckland’s waterfront while promoting a balance of sustainability, resiliency and productivity in our activities and projects, the Waterfront Plan sets out five goals for Auckland’s waterfront. These are:

 A public waterfront: A place for all Aucklanders and visitors to Auckland, a destination that is recognised for its outstanding design and architecture, natural environmental quality, public spaces, recreational opportunities, facilities and events; a place where we protect/enhance and express our cultural heritage and history, and celebrate our great achievements as a city and nation.

 A smart-working waterfront: Attracts high value innovative, creative and green businesses and investment that increases jobs and achieves a significant lift in productivity, a place for authentic and gritty waterfront activities: the marine and fishing industries, water transport and port activities.

 A connected waterfront: A place that is highly accessible, and easy to move around in, where people and communities feel connected to the wider city, harbour and beyond by improved pedestrian and cycling linkages, fast, frequent

and low-impact passenger transit, state-of-the-art telecommunications and through supportive community and business networks.

 A blue-green waterfront: a resilient place where integrated systems and innovative approaches are taken to enhance the marine and natural eco- systems, conserve natural resources, minimise environmental impacts, reduce waste, build responsibly and respond to climate change.

 A liveable waterfront: the location of leading sustainable urban transformation in Auckland; the most liveable New Zealand central city community; a vibrant mix of residents, workers, visitors and activities. A welcoming and resilient neighbourhood that is safe, diverse and attractive, with plentiful open space and access to local services and facilities.

Key strategic directions

3.7. Strategies for achieving these five goals for the waterfront are set out in the Waterfront Plan.

3.8. In summary, Waterfront Auckland’s strategies for the SOI period fall into two areas:

(a) Securing appropriate private sector participation – the strategy is to leverage public sector investment and the legacy of the Rugby World Cup to attract private sector equity participation and continue the transformational change on Auckland’s waterfront that will drive sustainable and rewarding growth. Waterfront Auckland has prepared a Waterfront Plan Implementation Strategy and will work with advisors and the wider Council group to go to market for developers / investors during the 2013 calendar year; and

(b) Implementing key building blocks - that will be fundamental to achieving transformational change on the waterfront. These include:

LTP Public Projects, including:

 Queens Wharf – jointly owned by Central Government and Waterfront Auckland. Current Waterfront Auckland projects/initiatives include completion of the Shed 10 events and cruise facility, ensuring the effective operation of the Cloud, events and activation activities, and potential expansion of the ferry terminal in conjunction with Auckland Transport.

 Westhaven Promenade – walkway and cycleway that will link Westhaven with Wynyard Quarter significantly extending continuous public access along the waterfront

 Adaptive re-use of character buildings including the former John Lysaght building in Pakenham Street

 Wynyard Quarter public works – construction of new urban realms including Daldy and Halsey Street upgrades, parks and plazas, and contamination remediation of public spaces.

Marina Projects

 Westhaven Marina development to expand infrastructure and commercial opportunities, increase water depth to accommodate larger vessels, and improve public amenity for this important public and recreational facility which is enjoyed by both Aucklanders and visiting yachts from around the globe.

Commercial Property Projects

 Wynyard Quarter Central Precinct – Wynyard Quarter is being described as New Zealand’s launching pad for business going offshore. It is proposed to accommodate the Innovation hub focusing on developing technologies in the ICT and creative sectors and with strong linkages to marine innovation. Marine investment in the Wynyard Quarter is a Council priority to facilitate development of a super-yacht commissioning and refit yard. Planned residential and hotel development, together with resilient infrastructure and high quality design will make the Wynyard Quarter a showcase of innovative sustainable development and vibrant inner city living.

 The proposed Innovation hub is a strategic development sponsored by ATEED, Waterfront Auckland, Auckland Council and the Ministry of Science and Innovation, with the goal of co-locating a mix of firms from the ICT and digital media sectors, R&D and business incubation services. A precinct hub, located on the land bounded by Beaumont, Madden, Halsey and Pakenham Streets, using several heritage buildings as a base, will activate the cluster showcasing innovation, new technologies and products. Initial funding for both ATEED and Waterfront Auckland has been included in Council’s LTP.

 Westhaven Marine Centre – a marine industry cluster on the western side of Westhaven Marina, comprising a mix of office, retail and possibly residential premises (all marine related). This project will also include a portion of the Westhaven Promenade immediately adjacent to the site.

A range of other projects as signalled in the Waterfront Plan will also be undertaken.

Contribution to Auckland Council objectives

3.9. Tables 7-9 in Attachment 3 provide a more specific overview of how Waterfront Auckland will contribute to Auckland Council’s strategic directions as set out in the Auckland Plan, as well as the relevant LTP priorities and Local Board priorities as set out in the Letter of Expectation 2012/2013.

3.10. Tables 7-9 differentiate between (a) the areas in which Waterfront Auckland will be responsible for leading and delivering, and (b) the areas in which we will collaborate with Auckland Council (including other CCOs, Local Boards, and the IMSB) to contribute to Auckland Council’s objectives. Note: This differentiation between leading and collaborating is differentiated by project management accountability and does not necessarily align with the delineation between Waterfront Auckland’s ‘Areas of Ownership’ and ‘Areas of Influence’.

3.11. Tables 7-9 have been prepared with reference to Attachment 4 Performance Measures (discussed in Section 5), which contains further details on how Waterfront Auckland will contribute to these Auckland Council strategic directions as well as the link between outputs (projects) and outcomes through the impacts that the outputs are anticipated to achieve.

4. Nature and Scope of Activities

Area of ownership and Influence

4.1. Waterfront Auckland has a mandated Area of Influence, as well as control and management rights over its Waterfront Area of Ownership (as explained in Section 2 and shown in Attachment 2).

Assets

4.2. Waterfront Auckland’s assets include commercial property, marina assets (including waterspace assets) and public spaces as shown in the graph below and detailed in Attachment 5. Auckland Council, as shareholder, is the ultimate owner of these assets.

Figure 1: Waterfront assets as per 30 June 2012 Annual Report

Marina 15% Property 57% Public spaces 28%

4.3. Land tenure in the Area of Ownership is mixed and includes significant land subject to leasehold interests (terminating leases) and freehold property. Ownership of waterspace, marina assets and wharf and sea wall assets is complex and in various instances involves separate trusts, companies and limited tenures.

4.4. Other major assets owned by Auckland Council or its organisations are of strong interest to the functions and goals of Waterfront Auckland – these include:

 Ports of Auckland  Downtown Ferry Terminal  Britomart Transport Centre  Downtown car park  Viaduct Events Centre and the Voyager Museum  Designated roads and public reserves  Marine Rescue Centre  The Landing (Orakei)  Orakei Wharf, Devonport Wharf  Hobsonville marine development.

Activities

4.5. In implementing the Waterfront Plan, and developing and maintaining waterfront assets, Waterfront Auckland engages in three key activity areas. These are listed below and summarised in Table 1:

 Public initiatives;  Marina operations; and  Commercial property initiatives.

4.6. Auckland Council sets the priorities for public projects, and funds Waterfront Auckland’s public infrastructure works. Auckland Council requires Waterfront Auckland to act in a commercial way to achieve a targeted 8% return on investment on commercial property activities and marina operations, and this has a direct impact on Auckland Council’s financial performance.

Table 1: Waterfront Auckland Key Activity Areas

Service area Sub-activities Area of Ownership Area of Influence

Public initiatives  Plan, develop and manage  Co-operatively collaborate with waterfront public works in an Auckland Council and other This service ensures integrated and balanced CCOs / parties to execute and the high quality manner in coordination with implement agreed public standard of the city centre and other areas projects within Waterfront development of the connected to the waterfront Auckland’s Area of Influence waterfront which is e.g. Quay Street, other roads, accessible to all  Manage the clean-up of Princes Wharf, Quay Park, Aucklanders, whilst contaminated waterfront land Tamaki Drive maintaining its working waterfront  Project manage the delivery of character and public realm assets i.e. functions, cultural streetscapes, public space, heritage, and history transport, and buildings By creating an  Project manage key public international standard initiatives such as the public realm private development of Queens Wharf sector developments  Public space asset will be more likely to management and renewal be facilitated, successful and sustainable producing appropriate returns within acceptable risk parameters

Marina operations  Provide marinas and moorings  Manage marinas and public for a wide range of vessel boat ramp at Okahu Bay Within Waterfront types including recreational Landing Auckland ownership yachts and power boats, we can: liveaboards and houseboats,  Operate a haul-out facility at

trailerable boats, super yachts the Landing in Orakei  Ensure that and charter boats at Aucklanders and  Host international marine Westhaven, Viaduct Harbour visitors can enjoy events e.g. Volvo, Louis and Hobson West long term public Vuitton, Americas Cup access to the water  Provide a public boat ramp at and surrounding Westhaven areas  Enhance public realm around

Service area Sub-activities Area of Ownership Area of Influence  Manage and Westhaven and Wynyard develop marina Quarter assets and  Manage marina operations wharves within including berth rentals, current legal marketing and sales restraints.  Provide berths for the fishing industry at Halsey and North wharfs  Own and operate marina seabed occupation rights  Asset maintenance, renewal and development

Commercial  Secure investment and  Strategic investments in area property initiatives facilitate private sector of influence development of Waterfront This service optimises Auckland land, buildings and financial returns by waterspace assets for managing Waterfront commercial return Auckland assets in a commercially feasible  Coordinate private sector and sustainable developments with the manner and delivering development of the public long term value to realm stakeholders whilst ensuring the social,  Ensuring rectification of environmental, contaminated land economic, and  Project management and cultural wellbeing of delivery of Waterfront people and Auckland private works communities projects  Property management of Waterfront Auckland's asset portfolio (i.e. leasehold and freehold land holdings, commercial property, and wharves); includes acquisition, valuation, divestment, licence, lease and rental management  Asset management and maintenance of Waterfront Auckland's commercial property portfolio assets  Develop, maintain and lease of car parks within Waterfront Auckland's area of ownership

Note: These activities will be delivered in a manner consistent with the Waterfront Plan. In addition to these specific activities, Waterfront Auckland will carry out an advocacy role as outlined in the Waterfront Plan.

4.7. Overarching these activities is the need to plan for Auckland's waterfront as a high quality urban transformation project. This includes:

 Planning and activation of the waterfront area, including plans to deliver integrated transport, design, architectural, environmental and economic outcomes, and spaces for the residents and visitors to enjoy social, cultural and recreational pursuits;

 Facilitating sustainable city building and urban development in the waterfront specific area of ownership that delivers wider council strategic direction and sustainability objectives;

 Planning and influencing high quality architecture resulting in high quality project initiatives;

 Facilitating new urban residential and business communities, creating a special sense of place and character;

 Facilitating and developing attractors, interim uses, activation and programmes that stimulate visits to the waterfront;

 Attracting and connecting neighbours and a wide range of Aucklanders and visitors;

 Attracting innovative high growth businesses, and a collaborative business neighbourhood that stimulates the Auckland economy;

 Managing stakeholder relationships and communications, project and property marketing, sponsorship and activities; and

 Positively influencing waterfront development in the Waterfront Area of Influence.

Core Competencies

4.8. In order to deliver the strategies and the desired results in the key activity areas, Waterfront Auckland has established and is continuing to develop a range of core competencies; and organises its teams around these. They are:

 Strategy and communications;  Development;  Property and asset management;  Marina operations; and  Finance and business support.

Strategic projects

4.9. In the period of this SOI, in undertaking these activities, Waterfront Auckland will contribute to Auckland Council’s objectives through the delivery of a number of strategic initiatives and projects.

4.10. The strategic initiatives and projects as funded in the LTP, and revised per the Annual Plan 2013/2014, are set out in Table 2 below. Only projects that commence during the SOI period are included. A description of these projects is contained in Attachment 6 as per the “Note” column and the locations of these projects are shown in Attachment 7. Further details are contained in Table 5, Section 5 which sets out the amount and timing of the capital expenditure for each.

Table 2: Confirmed Strategic Projects

Key: Planning Delivery

Project Note 2013/14 2014/15 2015/16 2017-23 Public Daldy / Halsey Streets and Linear Park 1 Pakenham Street 2 Madden Plaza 3 Madden / Jellicoe Western Edge 4 West Edge Promenade & Park 5 Point Park 6 Contamination remediation public spaces 7 Predevelopment expenditure 8 Jellicoe Plaza 9 Tram connection to Britomart 10 Teal Park 11 Central Wharves Public Works (Quay Street) 12 Waitemata Plaza landscaping upgrade 13 Westhaven Promenade 14 Marina Operations Westhaven Marina operations asset renewal 15 Wynyard Quarter Marine Precinct Superyacht Refit 16 Marina development 17 Commercial Property Commercial property asset renewals 18 Innovation Precinct Stage 1 Site 38/38A 19 Westhaven Marine Centre Stage 1 (Platform 2) 20 Wynyard Quarter Central Area private works 21

4.11. Other key work-streams during the SOI period that will facilitate the successful implementation of our goals for the waterfront and these strategic projects as well as future developments in the waterfront area include:

Table 3: Key work-streams

Work-stream 2013/2014 2014/2015 2015/2016

Wynyard Central Precinct Plan (Reference Design / Integrated Development Plan / Sustainable  Development Framework)

Central Precinct Design Guidelines and Sustainability Standards 

Wynyard Quarter Residential Strategy  Wynyard Central Retail Plan  Selection of preferred development partners for Wynyard Central  

Transport Strategy  Culture and Heritage Action Plan   Neighbourhood development and community infrastructure plan  

Harbour Bridge Park feasibility study  Westhaven Marine Centre Masterplan  Queens Wharf Masterplan  Harbour Edge co-ordination and integration  

Work-stream 2013/2014 2014/2015 2015/2016

Agree solution for light rail extension to Britomart  Viaduct Harbour surge project (including Hobson Wharf maintenance) 

Signage (way-finding and interpretive)  Waterfront Public Art Plan   Place making programme for Westhaven and Wynyard Central  

Refresh of Sustainable Development Framework  Maori Responsiveness Plan – action plan  Sustainability and climate change – ongoing detailed investigations (including Precinct Renewable Energy Scheme feasibility, Climate Change Risk    Assessment) and sustainable reporting

These work-streams will be undertaken in close collaboration with all relevant stakeholders.

Collaboration and implementation of projects

4.12. The parties recognise the importance of Waterfront Auckland as a place based agency responsible for planning and project delivery of its objectives. To that intent:

Waterfront Area of Ownership - Confirmed Strategic Public Projects

4.13. Waterfront Auckland will have lead responsibility for delivering its Confirmed Strategic Public Projects within the Waterfront Area of Ownership.

4.14. Waterfront Auckland will work closely with the key Auckland waterfront stakeholders in delivering its strategic public projects including Auckland Council (comprising CCOs, Local Boards and the IMSB). In this regard, Waterfront Auckland will seek to enter into service level agreements with Council’s CCOs detailing the principles and protocols for communication and collaboration and will prepare and execute a Local Board Engagement plan that will provide an overarching framework to guide engagement between Waterfront Auckland and Local Boards.

4.15. Waterfront Auckland will provide the Auckland Council Governing Body (and where relevant Auckland Council’s CCOs, Local Boards and the IMSB) with as much notice as possible of, as well as the opportunity to comment on and have input into, policy, strategy, design, asset and service plans, development and operational budgets, development programmes and other matters.

Waterfront Area of Influence Projects

4.16. Waterfront Auckland has a shared interest in the standard and quality of development, nature and timing of investment in the Waterfront Area of Influence.

4.17. Waterfront Auckland will co-operatively collaborate with Auckland Council, its CCOs and other Waterfront stakeholders to implement the delivery of agreed projects within the Waterfront Area of Influence.

4.18. The City Centre Master Plan will interface with Waterfront Auckland’s Area of Ownership and Influence. The parties will work together to ensure that the City Centre Master Plan and the Waterfront Plan integrate seamlessly.

Link between outputs and outcomes

Refer Attachment 4 which shows the link between outputs (projects) and outcomes through the impact that the outputs are anticipated to achieve.

5. Performance Measurement and Reporting

5.1. A comprehensive set of strategic-level performance measures has been developed that respond to the key areas of shareholder interest and the relationship with Waterfront Auckland as a CCO. The performance measures are grouped under the following headings to provide Auckland Council with a clear overview of Waterfront Auckland’s performance:

1. Waterfront Plan implementation 2. Customer satisfaction 3. Accountability 4. Strategic investment/success in leveraging private investment 5. Project delivery 6. Financial performance

Measures for 4, 5, and 6 are provided in Table 6 (Financial Performance Measures).

Non-financial performance

5.2. The performance measures for the SOI period are set out in detail in Attachment 4 and describe how Waterfront Auckland will contribute to Auckland Council Strategic Directions as well as the link between outputs, impacts and outcomes.

5.3. The summary table below includes the output measures for outcomes over which Waterfront Auckland has a strong influence and is responsible for leading and delivering. Attachment 4 includes other strategic indicators for outcomes which Waterfront Auckland will contribute to but cannot be held responsible for as many other parties are involved (shown in italics).

5.4. Implementation of the Waterfront Plan is a key focus of Waterfront Auckland. Progress towards implementation of the Waterfront Plan will be monitored and reported on regularly. The indicators are included in the Waterfront Plan (which was approved by Auckland Council in June 2012).

5.5. Measurement of the economic benefits of key projects such as cruise and superyacht facilities cannot be undertaken annually as it is technically demanding and costly to perform. Benefit analysis will be commissioned at the appropriate time in collaboration with Auckland Council (ATEED / Economic Development / Research Investigations and Monitoring Unit).

5.6. In reporting quarterly to the shareholder, updates will be provided on progress made on each of the projects outlined in Table 2.

Table 4: Summary of non-financial performance measures and targets1

Performance 2011/2012 Target Target Target Target measure (2012/13) (2013/2014) (2014/2015) (2015/2016) Waterfront Progress on Qualitative Qualitative Qualitative Qualitative Qualitative Plan waterfront plan reporting reporting reporting reporting reporting Implementation implementation Hectares of 16.5 ha 17.2 18.0 ha 18.0 ha 18.0 ha public open space on waterfront (LTP) Number of 1.325 million Maintain or Maintain or Maintain or Maintain or annual visitors (est) improve improve improve improve to the waterfront (LTP) Number of 3,460 4,900 5,020 6,120 7,220 employees working in Wynyard Quarter (LTP) Floor space for 22,071 m2 No change No change 25,792 m2 No change marine industry in Wynyard Quarter including marine retail Percentage of Locals 83% n/a Locals 85% n/a To be Aucklanders Other (measured Other (measured developed who visit the city Aucklanders every Aucklanders every second centre 41%, second year) 43% year) waterfront at least once a (May 2012 month2 survey)

Distance of 1.75 km No change 2.02 km 4.02km No change continuous (+0.27km) (+2km) waterfront promenade Percentage of Qualitative 100% 100% 100% 100% WA-led new (against developments Sustainable where Developmen sustainable t design Framework)) principles as clearly evident as key part of design and build Customer Public Visitors 81% n/a Visitors 81% n/a To be satisfaction satisfaction with Locals 54% (measured Locals 56% (measured developed the public Other every Other every second spaces at city second year) year) centre Aucklanders Aucklanders waterfront 37% 39%

1 LTP measures shown in bold. Excludes measures for outcomes that fall outside of the SOI period, many of which are included in the Waterfront Plan, for example residential development.

2 Strategic indicators over which Waterfront Auckland has limited influence (but can contribute to). Full set provided in Attachment 4.

Performance 2011/2012 Target Target Target Target measure (2012/13) (2013/2014) (2014/2015) (2015/2016) Public Visitors 60% n/a Visitors 65% n/a To be satisfaction with Locals 50% (measured Locals 55% (measured developed good variety of Other every Other every second appealing second year) year) events at the Aucklanders Aucklanders waterfront 40% 45% Percentage of 67% >70% >70% >70% >75% marina berth owners satisfied with service provided Accountability All Council 100% 100% 100% 100% 100% accountability requirements are met including submitting quarterly reports and SOIs within given timeframes. Percentage of 100% 100% 100% 100% 100% annual waterfront public works programmes achieved on time and within budget (LTP) Opportunity for Regular Increase Complete Increase Increase Maori/Iwi consultation opportunities Maori achievements achievements involvement in on specific (in terms of Responsiven of MRP of MRP waterfront projects; organisation, ess Plan clearly regular place- (MRP) and demonstrated meetings making, early actions with IMSB design or arising in investment) investment opportunities, improved consultation and placemaking.

Attachment 4 contains the full set of non-financial performance measures.

Audit NZ suggested a change to the measure regarding “satisfaction with marina services” which has been incorporated. Some further rationalisation of measures was also agreed with CCO Monitoring Unit leading to some minor changes to Attachment 4. Waterfront Auckland has participated in workshops arranged by Auckland Council towards improving performance monitoring and will continue to work with Council on this.

Financial performance

5.7. The level of expenditure planned by Waterfront Auckland to fulfil our goals and objectives necessitates significant investment by Auckland Council for the foreseeable future. Waterfront Auckland and Auckland Council, through the LTP and Annual Plan processes, agree the planned funding in a LOE that is issued prior to the beginning of each financial year. The funding is provided by Auckland Council in accordance with the following funding assumptions.

Funding assumptions

5.8. The LTP contains sufficient funding for the public and private projects that the shareholder approved Waterfront Auckland to undertake.

5.9. The Council expects Waterfront Auckland to act commercially wherever possible. However, the overriding objective per the establishment order is waterfront transformation, of which the majority is publically funded.

5.10. The funding assumptions that support the activities and financial performance of Waterfront Auckland as a tax paying entity are as follows:

5.9.1 Public Space

a) Operational public space activities will be funded by grants from Auckland Council.

b) Public space capital works will be funded by equity investment from Auckland Council.

5.9.2 Commercial Activity (Including Marina and Property activity)

a) Operational commercial activity expenditure will be funded through commercial income or through debt in years when commercial income is insufficient to cover expenditure.

b) Capital works for commercial activities will be funded by cash surpluses from operating activities; with any shortfall funded through debt.

c) The Council, as shareholder, is entitled to dividend payments subject to financial performance being sufficient to meet operating costs and the capital repayment profile. Any cash surpluses generated from commercial operational activities not used to reduce debt or fund capital works for commercial activities, over a threshold to be agreed annually, may be returned to the Council for allocation or re-allocation.

d) Westhaven marina berth entitlement units are licensed through two trusts. Trust revenues are derived from annual operating expense charges levied on licensees and interest earned on trust fund balances. These monies may only be applied to trust purposes.

5.9.3 Overheads

a) Overheads will be allocated across each of the three activity areas outlined above and funded accordingly.

5.11. Waterfront Auckland will work closely with Auckland Council to ensure that:

(a) Funding arrangements are both equitable and tax efficient between the parties, and

(b) There is transparency of LTP funding requirements between public and commercial (property and marina) activities.

Capital expenditure budget for SOI period 2013 to 2016

5.12. The capital expenditure budget for the SOI period is set out in Table 5 below (refer Attachment 6 for project descriptions as per the “Note” column). Projects that do not commence within the SOI period are excluded from this table.

Table 5: Capital expenditure budget (inflated dollars as per 2012-22 LTP, and revised per the Annual Plan 2013/2014)

Year 2013 / 2014 / 2015 / Project Note 2014 2015 2016 2016-2022 TOTAL $m $m $m $m $m Public Wynyard Quarter Central Precinct public works Daldy / Halsey Streets and Linear Park 1 13.6 6.8 - 20.4 Pakenham Street 2 1.5 3.2 1.3 6.1 Madden Plaza 3 - 0.3 2.8 1.4 4.5 Wynyard Quarter Marine Precinct public works Madden / Jellicoe Western Edge 4 0.9 - 0.9 Wynyard Quarter Headland Precinct public works West Edge Promenade & Park 5 0.6 1.9 1.1 3.6 Point Park 6 1.0 1.0 0.2 3.7 6.0 Wynyard Quarter Development Sites public works Contamination remediation public spaces 7 3.1 1.9 1.6 8.8 15.5 Predevelopment expenditure 8 0.6 0.6 0.6 0.7 2.4 Wynyard Quarter Jellicoe Precinct public works Jellicoe Plaza 9 - 0.6 3.7 4.3 Rest of Waterfront Tram connection to Britomart 10 0.7 7.4 8.0 Teal Park 11 - 0.7 0.7 Central Wharves Public Works (Quay Street) 12 0.5 0.5 Waitemata Plaza landscaping upgrade 13 0.3 0.7 1.0 Westhaven Promenade 14 5.2 5.2 Total Public $m 28.0 25.1 11.4 14.6 79.0 Marina Operations Westhaven Marina operations asset renewal 15 0.2 0.2 0.2 1.3 1.9 Wynyard Quarter Marine Precinct Superyacht Refit 16 - - 4.5 4.5 Marina development 17 4.7 16.4 21.2 Total Marina Operations $m 4.9 16.6 4.7 1.3 27.5 Commercial Property Commercial property asset renewals 18 0.3 0.3 0.3 2.2 3.2 Innovation Precinct Stage 1 Site 38/38A 19 8.9 - 3.7 - 12.6 Westhaven Marine Centre Stage 1 (Platform 2) 20 1.9 1.9 Wynyard Quarter Central Area private works 21 2.5 0.6 2.3 4.8 10.2 Total Commercial Property $m 13.6 0.9 6.3 7.0 27.8 TOTAL FUNDED $m 46.5 42.6 22.4 22.9 134.3

Prospective Financial Statements

5.13. Waterfront Auckland’s budgeted financial performance for the year ended 30 June 2013 and prospective financial performance for the three years to 30 June 2016 is shown below and on pages 27 to 29.

5.14. The only material change from 2012/2013 is the reclassification of Silo Park Marina (and associated revenues and expenditure from the super-yacht re-fit capital project) from Commercial Property Activities to Marina activities.

Waterfront Auckland Group

Prospective summary income statement for the year ended 30 June 2013

Commercial Marina Property Public Activities Activities Activities Total $000 $000 $000 $000 Income Opex funding from Auckland Council - - 8,935 8,935

Revenue from services 13,318 13,679 310 27,307

Total income 13,318 13,679 9,245 36,242

Expenditure Personnel Costs 1,966 2,855 3,428 8,249

Depreciation and amortisation 1,719 1,903 2,876 6,498

Finance costs - 1,912 - 1,912

Other expenditure 8,250 6,918 5,817 20,985

Total operating expenditure 11,935 13,588 12,121 37,644

Surplus/(deficit) before tax 1,383 91 (2,876) (1,402)

Waterfront Auckland Group

Prospective summary income statement for the year ended 30 June 2014

Commercial Marina Property Public Activities Activities Activities Total $000 $000 $000 $000 Income

Opex funding from Auckland Council - - 8,288 8,288

Capex funding from Auckland Council - - 794 794

Revenue from services 15,935 11,725 1,075 28,735

Finance income 131 - - 131

Total income 16,066 11,725 10,157 37,948

Expenditure

Personnel Costs 1,523 2,839 2,766 7,129

Depreciation and amortisation 1,856 3,965 1,246 7,068

Finance costs - 2,036 - 2,036

Other expenditure 9,898 7,336 6,597 23,831

Total operating expenditure 13,277 16,177 10,609 40,063

Surplus/(deficit) before tax 2,789 (4,452) (452) (2,115)

Waterfront Auckland Group

Prospective summary income statement for the year ended 30 June 2015

Commercial Marina Property Public Activities Activities Activities Total $000 $000 $000 $000 Income

Opex funding from Auckland Council - - 8,837 8,837

Capex funding from Auckland Council - - 1,197 1,197

Revenue from services 16,794 11,750 1,103 29,646

Finance income 131 - - 131

Total income 16,925 11,750 11,137 39,812

Expenditure

Personnel Costs 1,561 2,910 2,836 7,307

Depreciation and amortisation 1,855 3,368 1,886 7,109

Finance costs - 2,887 - 2,887

Other expenditure 10,253 7,680 7,104 25,038

Total operating expenditure 13,670 16,846 11,826 42,341

Surplus/(deficit) before tax 3,255 (5,096) (689) (2,529)

Waterfront Auckland Group

Prospective summary income statement for the year ended 30 June 2016

Commercial Marina Property Public Activities Activities Activities Total $000 $000 $000 $000 Income

Opex funding from Auckland Council - - 10,350 10,350

Capex funding from Auckland Council - - 1,895 1,895

Revenue from services 19,637 12,644 1,133 33,414

Finance income 131 - - 131

Total income 19,768 12,644 13,377 45,790

Expenditure

Personnel Costs 1,594 2,971 2,895 7,460

Depreciation and amortisation 1,883 3,196 2,826 7,905

Finance costs - 2,244 - 2,244

Other expenditure 10,614 7,670 8,588 26,872

Total operating expenditure 14,091 16,082 14,309 44,481

Surplus/(deficit) before tax 5,677 (3,437) (931) 1,309

5.15. Waterfront Auckland’s prospective financial position for the three years to 30 June 2016 is shown below.

Waterfront Auckland Group

Prospective summary statement of financial position As at 30 June 30 June 2014 30 June 2015 30 June 2016 $000 $000 $000 Assets Current assets Cash and cash equivalent 9,245 9,245 9,554 Other current assets 27,239 27,239 27,239 Total current assets 36,484 36,484 36,793

Property plant and equipment 309,107 349,339 369,366 Investment property 237,695 237,695 237,695 Other non current assets 316 316 316 Total non- current assets 547,118 587,350 607,377

Total assets 583,602 623,834 644,170

Liabilities Current liabilities Trade and other payables 10,011 10,011 10,011 Other current liabilities 450 450 450 Total current liabilities 10,461 10,461 10,461

Non-current liabilities Borrowing from parent 43,101 50,360 - Other non-current liabilities 96,105 102,957 157,309 Total non-current liabilities 139,206 153,317 157,309

Total liabilities 149,667 163,778 167,770

Net assets 433,935 460,056 476,400

Equity Contributed equity 424,653 453,304 468,340 Retained earnings 9,282 6,753 8,060 Total equity 433,935 460,056 476,400

5.16. Waterfront Auckland’s prospective funding statement for the three years to 30 June 2016 is shown below.

Waterfront Auckland Group

Prospective summary funding statement for the year ended 30 June 30 June 2014 30 June 2015 30 June 2016 $000 $000 $000

Total operating expenditure 40,063 42,341 44,481

Less depreciation and amortisation (7,068) (7,109) (7,905)

Operating expenditure to be funded 32,995 35,232 36,576

Operating expenditure funded by:

Opex funding from Auckland Council 8,288 8,837 10,350

Revenue from services 28,735 29,646 33,414

Other revenue 131 7,169 54,747

Less armotised prepaid leases (non-cash item included in other revenue) (186) (186) (264)

Total opex funding 36,968 45,466 98,247

Reduce loans from Auckland Council - (7,038) (54,616)

Funding Surplus 3,973 3,196 7,055

Total capital expenditure 46,527 42,555 22,374

Capital expenditure to be funded 46,527 42,555 22,374

Capital Expenditure funded by

Capex funding from Auckland Council 794 1,197 1,895

Investment by Auckland Council 27,172 23,865 9,478

Loans from Auckland Council 18,561 17,493 11,001

Total capex funding 46,527 42,555 22,374

Financial performance measures

5.17. Financial performance measures for which Waterfront Auckland will be held accountable for delivering on are summarised in Table 6 below.

Table 6: Financial performance measures and targets

Performance Current Target Target Target measure baseline (2013/2014) (2014/2015) (2015/2016) 30 June 2012 Strategic Private to public 0.8:1 2:1 2:1 2:1 investment/ investment ratio in Progress in Wynyard Quarter securing commercial investors to plan: Projects Return on 2.25% 8% 8% 8% delivered to investment (ROI) time and on commercial budget: waterfront activities and marinas (LTP) Financial Ratio of 74.6% 80% 80% 80% Position: consolidated shareholder funds to total assets3

5.18. Auckland Council has set the expected rate of return on investment (ROI) on commercial waterfront activities and marinas at 8% p.a. The target takes account of Council's reasonable expectation of the returns achievable from the commercial property investment portfolio. The Council recognises that the ROI is set on a portfolio wide basis and assumes that current returns from existing individual agreements and / or property will be renegotiated or adjusted over time to meet the Council's ROI targets. The Council and Waterfront Auckland have agreed to review the allocation and treatment of commercial property that is taken into account in the calculation of the ROI performance against future target setting.

5.19. The budgets for the next three years, as approved by Auckland Council, have indicative ROI values significantly below the expected ROI level of 8%. This reflects the current nature of the commercial portfolio vested in Waterfront Auckland, the timeline for scheduled developments and the loss of income associated with the redevelopment phase of existing tenanted areas. All new development schemes have a threshold ROI of 8% post completion, unless specifically authorised by the Board and Council to be lower, due to intervention or other public interest initiatives.

5.20. The next three years show the ROI reducing as sites currently let are decanted for development of the innovation hub, capital investment ramps up in Westhaven, and the decontamination of future development sites continues to programme.

3 Waterfront Auckland will ensure for the period of this SOI that the ratio of Consolidated Shareholder’s Funds to Total Assets will be not less than 60%.

Shareholder’s Funds means the sum of the amount of share capital, reserves, and accumulated funds of the parent as disclosed in Waterfront Auckland’s Statement of Financial Position.

Total Assets means the sum of the net book values of property, plant and equipment, intangible assets, investment properties, investments in subsidiaries, other financial assets, and current assets of the parent as disclosed in Waterfront Auckland’s Statement of Financial Position.

5.21. The review of allocation and treatment of commercial property will improve the budgeted ROI. Over time the ROI trends towards the 8% target as commercial projects are completed and the revenue and investment levels settle into a mature commercial property company profile.

Distributions to Auckland Council

5.22. Waterfront Auckland intends to make dividend payments to Auckland Council from surpluses generated within commercial activities. Before any distribution is made, Waterfront Auckland will work with Council to determine the most efficient manner of making that distribution.

5.23. The level of distributions will be determined by reference to:

(a) Waterfront Auckland’s funding agreement with Auckland Council and the agreed capital repayment profile;

(b) The capital expenditure programme for commercial and marina activities;

(d) Working capital requirements; and will exclude

(e) Capital profits earned on disposals of assets where such profits are to be used to meet investing and operating requirements.

Estimate of the commercial value of Waterfront Auckland

5.24. At 30 June 2012, the commercial value of the Shareholder's investment in Waterfront Auckland, based on the net asset value disclosed in the audited financial statements, was $375.8 million.

5.25. The Directors' assessment of the commercial value of the Shareholder's investment will be reassessed on an annual basis at 30 June each year based on the audited net assets of Waterfront Auckland.

Reporting to Auckland Council

Statement of Intent 5.26. Waterfront Auckland will provide Auckland Council with a draft and final SOI for each financial year, prepared and finalised in accordance with the requirements of Schedule 8 of the Local Government Act 2002.

Annual Report 5.27. Within three months from the end of June each year, Waterfront Auckland will provide to Auckland Council an Annual Report which will comply with Section 67 of the Local Government Act 2002.

Half Year Report 5.28. Within two months from the end of December each year, Waterfront Auckland will provide to Auckland Council an unaudited Half Year Report which will include a: Statement of Financial Performance; Statement of Financial Position; Statement of Movements in Equity; Statement of Cash Flows and a report on the programme of action and performance targets set out in the SOI.

Quarterly Reports 5.29. Within six weeks from the end of the September and March quarters each year, Waterfront Auckland will provide to Auckland Council an unaudited Quarterly Report which will include a: Statement of Financial Performance; Statement of Financial Position; and a report on the programme of action and performance targets set out in the SOI.

5.30. Within six weeks from the end of the June quarter each year, or directly following the next Board meeting (whichever is later), Waterfront Auckland will provide to Auckland Council an unaudited Quarterly Report which will include a: Statement of Financial Performance; Statement of Financial Position; Statement of Movements in Equity; Statement of Cash Flows and a report on the programme of action and performance targets set out in the SOI.

5.31. Waterfront Auckland will report quarterly to the Governing Body of the Auckland Council and will provide the information specified in the template, and to the timelines, provided by CCO Governance and Monitoring.

Additional information 5.32. Waterfront Auckland will provide additional information to Auckland Council as required, or as reasonably requested by Auckland Council, to ensure that Auckland Council is informed in a timely manner of significant events which related to Waterfront Auckland and which may affect Auckland Council.

Confidentiality 5.33. Relevant information which is confidential under the terms of the Local Government Official Information and Meetings Act will be shared with Auckland Council as permitted by other agreements. When sharing such information Waterfront Auckland will clearly state the nature of the information and the reason for confidentiality.

6. Approach to Governance

Approach to governance

6.1. The Waterfront Auckland Board is committed to high standards of governance and business behaviour. The Board of Directors will continue to monitor developments in corporate and public sector governance to ensure that Waterfront Auckland implements the highest standards of governance at all times.

6.2. In undertaking its activities, Waterfront Auckland will exhibit and ensure:

(a) Sound business practice in keeping with its business objectives

(b) Sustainable business practice

(d) An open and transparent approach to decision-making, while respecting the need for commercially sensitive information to be protected

(e) An active partnership approach with Auckland Council and key Auckland Council Group CCOs and Stakeholders

6.3. The Board will govern Waterfront Auckland with an emphasis on:

(a) serving the legitimate interests of the owner, the Auckland Council, and accounting to it fully for the performance of Waterfront Auckland and for the Board’s stewardship of that performance;

(b) remaining up to date in terms of Council and other key stakeholders’ concerns, needs and aspirations;

(c) providing leadership in the exploration of strategic opportunities and potential material risks rather than being distracted by administrative detail;

(d) behaving proactively rather than reacting to events and others’ initiatives;

(e) bringing the best available evidence and a diversity of opinions and views to bear on its decisions;

(f) developing and expressing a collective responsibility for all aspects of the governance of the company; and

(g) ensuring there are positive conditions for the motivation of the Chief Executive and ensuring there is adequate training to support him in his role. Representation and commitment statement

6.4. The Board is accountable to Auckland Council to ensure that Waterfront Auckland:

(a) Performs its functions

(b) Acts in accordance with relevant legislation including the Local Government Act 2002 and Companies Act 1993

(c) Gives effect to and achieves the goals, business objectives, performance targets and other measures set out in this SOI.

(d) Gives effect to the vision for the Auckland waterfront, the Waterfront Plan, Auckland Council’s LTP, and all relevant shareholder polices and plans including:

(i) Shareholder Expectation Guide for Council Controlled Organisations (SEG).

(ii) Accountability Policy

(iii) Board Appointment and Remuneration Policy

6.5. The Board will:

(a) Provide leadership to Waterfront Auckland ensuring that it achieves continuing prosperity in the best interests of the company and its stakeholders.

(b) Establish Waterfront Auckland’s purpose and values, and set the strategic direction as the basis for further planning

(c) Determine the appropriate culture for Waterfront Auckland and model behaviours that both reflect and promulgate the desired culture.

(d) Provide an overall policy framework within which Waterfront Auckland is managed and against which the company’s action are monitored

(e) Employ the Chief Executive and monitor management and company performance against board-established criteria

(f) Identify and monitor the management of corporate risks

(g) Ensure that the company complies with all internal and externally imposed compliance requirements

(h) Establish and maintain an effective interrelationship with the Auckland Council and other stakeholders

(i) Ensure an appropriate mix of Directors through thorough self-assessment and subsequent advice to the Auckland Council on the appointment of appropriately skilled and experienced personnel. Public meetings

6.6. All Waterfront Auckland Board meetings are open to the public except where the business being discussed or transacted is commercially sensitive.

6.7. Pursuant to section 96 of the Local Government (Auckland Council) Act 2009, Waterfront Auckland will hold meetings that are open to the public at the following times:

(a) in the last week of June each year for the purpose of considering comments from the Auckland Council on the Statement of Intent for the following financial year; and

(b) towards the end of August in each year for the purpose of considering the organisation’s performance under its Statement of Intent in the previous financial year. Procedures for purchasing shares in other companies

6.8. This will require the prior approval in writing of Auckland Council.

Management of strategic assets

6.9. Strategic assets in terms of the Local Government Act 2002, owned by Waterfront Auckland, comprise freehold interests in waterfront land.

6.10. Pursuant to Auckland Council’s CCO Accountability Policy, Waterfront Auckland may not undertake a major transaction in relation to strategic assets (as defined in the Accountability Policy) unless approved by the Council or already provided for in the LTP.

Decisions which require shareholder approval

6.11. Waterfront Auckland’s decisions will be made consistent with the Waterfront Plan, and Auckland Council’s LTP as directed by Auckland Council.

6.12. Criteria guiding types of decisions requiring shareholder approval are contained in the Shareholder Expectation Guide for CCOs.

Relationship with Auckland Council, CCOs and stakeholders

6.13. As a place-based agency, Waterfront Auckland will integrate and collaborate with Auckland Council and its CCOs.

6.14. Strong working relationships will be built and maintained, particularly around the quality, design and development of the public and private realm.

6.15. Waterfront Auckland has a particular role with private investors and its intention is to secure continued private sector investment in the waterfront, together with the support from waterfront stakeholders, which is also vital to success and requires excellence in working with others.

6.16. Relationship with Auckland Council

In order to produce the best outcomes for Auckland, Waterfront Auckland will maintain an effective working and operational relationship with Auckland Council including a pro-active communication and engagement policy in accordance with the expectations, protocols and guidelines contained in the SEG.

The Chairman and Chief Executive will conduct regular briefing meetings with the Mayor and Chief Executive of Auckland Council.

Waterfront Auckland agrees to inform and, where appropriate, consult with Auckland Council’s advisory panels - Pasifika, Ethnic, Youth, Business, Rural and Disability on any issues of particular interest to each advisory panel.

6.17. Relationship with Local Boards

While Waterfront Auckland is accountable to the Governing Body as shareholder, it also has relationships with Local Boards who share the decision-making responsibilities of the Auckland Council with the Governing Body. Waterfront Auckland will:

 Work in accordance with its Local Board Engagement Plan, which provides an overarching framework to guide engagement between Waterfront Auckland and Local Boards; and conforms with Auckland Council guidance provided.  Report to Local Boards as specified in its Local Board Engagement Plan.

 Adequately resource liaison with and reporting to Local Boards.  Keep informed of Local Board priorities and objectives in Local Board plans and ensure that these are considered when: (i) preparing budgets; and (ii) undertaking activities in Local Board areas.  Ensure that business cases seeking Auckland Council funding, take into account Local Board priorities and objectives.  Provide regular activity reports to the relevant Local Boards on major projects that impact on the Local Boards’ areas.

6.18. Relationship with Independent Māori Statutory Board (IMSB)

Waterfront Auckland will contribute to the Auckland Council’s responsibilities of acting consistently with the provisions of the Treaty of Waitangi.

Waterfront Auckland will take account of the IMSB’s schedule of issues of significance, its Māori Plan and any statutory Treaty provisions that are relevant to its activities and, where appropriate, engage with the IMSB on these matters.

6.19. Maori Responsiveness Framework

Waterfront Auckland will contribute to the Auckland Council’s commitment to Maori by giving effect to the Maori Responsiveness Framework.

Waterfront Auckland will ensure that any relationships and formalised relationship agreements with Maori are consistent with any Auckland Council policy on relationship agreements with Maori.

A key goal of Waterfront Auckland is to create a waterfront area for all Aucklanders and visitors. The Waterfront Plan describes how this will be achieved and provides expanded wording around the Treaty of Waitangi and the need for collaboration with Maori that goes beyond consultation. The inclusion of Maori culture, philosophies and the Maori economy have been identified as vital and desirable threads that need to be woven through the development. Waterfront Auckland has made a commitment to this and has an active programme of consultation and information sharing with a range of iwi and engagement with iwi in regards to investment opportunities on the waterfront.

Further information on how Waterfront Auckland will contribute to Maori outcomes including specific actions, and forecast expenditure is contained in Attachment 8.

6.20. Relationship with Auckland Council-Controlled Organisations

(a) Auckland Transport (AT): Waterfront Auckland has a direct interest in land, waterspace and associated activities within the waterfront Area of Influence. It is acknowledged that some of these areas fall into jurisdictional responsibilities of AT, particularly areas designated as road reserves and any public transport infrastructure.

Waterfront Auckland will work closely with Auckland Transport to ensure quality outcomes land use and transport integration. We will also input expertise into regional transport projects (e.g. CBD rail link, Light Rail Integration, Alternative Harbour Crossing) in collaboration with the New Zealand Transport Authority.

(b) Auckland Tourism, Events and Economic Development Limited (ATEED): Waterfront Auckland has a direct interest in the types of events that are attracted by ATEED. We will work closely with the Major Events Team to ensure that the events that are held in the Area of Influence are consistent with ATEED’s Major Event Strategy. We will work with ATEED to promote the

waterfront as a destination and with Business and Sector Development experts to attract local, regional and international investment and activity on the waterfront.

(c) Regional Facilities Auckland (RFA): Waterfront Auckland will work together with this CCO to achieve its objectives in respect of those facilities in the waterfront Area of Control and Influence. In particular we will develop and maintain a partnership with RFA for managing the Viaduct Events Centre and Voyager Museum located on the waterfront in such a way that enhances Auckland's international competitiveness, consistent with RFA’s Horizons Regional Facilities for Auckland Discussion Document.

(d) Auckland Council Investments Limited (ACIL): Waterfront Auckland has a direct interest in the Ports of Auckland land and associated water-space which is 100 percent owned by ACIL. The activities of the port and the port land and water-space are integrally linked with a number of our goals and business objectives. We will work closely with ACIL and the Port Company to deliver on our mutual goals.

(e) Auckland Council Property Limited (ACPL): Unlike other CCOs Waterfront Auckland is a major property owner and is charged with managing acquisitions and disposal of its land in the Area of Ownership. To achieve transformational change on the waterfront’s Area of Influence is an integral part of Waterfront Auckland’s scope. Strategic investment in this part of the waterfront is an important mechanism for Waterfront Auckland. ACPL may have some involvement in the management, acquisition and disposal of land in the Waterfront Auckland Area of Influence and where necessary and relevant we will liaise with colleagues in this CCO.

(f) Watercare Services Limited (Watercare): Waterfront Auckland will work with Watercare on matters regarding water and waste water services, particularly in its Area of Ownership.

6.21. Relationship with Government

Waterfront Auckland recognises Central Government as a strategic partner and will align with Government policy and funding for culture and heritage that is funded at the regional level, where relevant.

6.22. Relationship with other Key Stakeholders

Waterfront Auckland will be proactive, responsive and transparent in its relationship with all stakeholders and to take into account the interests of Auckland Council as well as Waterfront Auckland, in its dealings with external parties. We will develop and maintain relationships with key stakeholders, in particular: i. The Auckland public ii. Iwi iii. CBD and waterfront business/user associations iv. Ports of Auckland Limited v. Land owners and residents vi. Private sector investors vii. Industry sectors – e.g. marine, fishing, cruise sectors, tourism viii. Development, utilities and infrastructure sector and the finance community

7 Organisational Health, Capability and Risk Management

7.1 Waterfront Auckland will commit to building and maintaining an enduring and resilient organisation.

Health and safety

7.2 Health and Safety is an important priority for Waterfront Auckland and we are committed to a high standard of observance and practice. We have a Health and Safety Policy and comprehensive Project Safety Plan in place.

7.3 The Health and Safety goal considers amongst other things; “…the preservation of life and health to be paramount…and that there is no loss of life or serious accident during the project lifetime.” This applies to all site users and stakeholders. Along with New Zealand best practice, aspects of International Best Practice have been adopted to achieve an appropriate and higher standard than the minimum New Zealand standard.

7.4 With construction activity occurring on a number of sites simultaneously across the wider Waterfront Auckland area, as well as the opening up of the Wynyard Quarter to the general public, it is vital that we remain proactive and focused on our aspirational goal of “zero loss of life and serious harm for all stakeholders”. Accordingly, we place a high emphasis on proactive intervention and incident prevention, auditing, surveillance and training at the high risk site level, to help ensure the workers are conscious of the Health and Safety requirements at all times, to a habitual level. The scope of Health and Safety activities has been extended across the whole of Waterfront Auckland’s area of influence.

Good employer

7.5 Waterfront Auckland will operate a human resources policy that complies with the good employer objectives as set out in the Shareholder Expectation Guide.

Staff engagement

7.6 Waterfront Auckland will participate in Auckland Council’s staff engagement surveys to monitor organisational health and capability.

Risk management

7.7 Waterfront Auckland has a comprehensive risk management framework which includes:

 Waterfront Auckland Board regular review of the inherent, business and major operational risks to the organisation.

 Conflict of Interest Policy and Protocol for Board members, Executive and staff.

 A thorough internal decision-making and risk management process supported by real-time reviews undertaken by Audit New Zealand Special Services.

 Regular reviews of the financial capacity of our partners.

 Annual independent audit completed by Audit New Zealand.

7.8 Waterfront Auckland’s risk management processes aim to minimise the consequences of events that could adversely affect its ability to achieve its targets. This is achieved through structured processes based upon Australian and New Zealand Risk Management Standard AS 4360 – Risk Management. Waterfront Auckland’s risk management procedures comply with these principles and its structure is in accordance with its framework for managing risk.

7.9 In addition, where it is practical to insure Waterfront Auckland’s identified risks, these are covered under Auckland Council's Group insurance policies. These have been fully reviewed on renewal at 30 June 2013. It is noted that some environmental and market related risks are not able to be insured.

7.10 Key risks which apply to the achievements of targets in the 2013 to 2016 SOI are:

(a) Current economic climate reduces business needs for floor space Continuing difficult economic climate resulting in scarcity of investment funding. (b) Certainty of Auckland Council funding for public infrastructure projects Waterfront Auckland is reliant on Auckland Council for funding. Auckland Council’s 10 year LTP was adopted by the Governing Body with effect from 1 July 2012. Funding for public projects is confirmed, however each project is still subject to Business Case approval and the LTP itself is to be reviewed on a three year basis. (c) Market perception – commercial uptake affected by perceived lack of adequate return Market finds offerings unattractive, uncompetitive and/or concerns are raised that do not justify investment (d) Market resistance to leasehold Potential parties elect not to proceed due to dislike of leasehold instruments, especially in residential markets. (e) Decontamination of contaminated land Scale of contamination is significantly greater and/or more costly than estimated. (f) Relocation of bulk liquids – Headland Public Space Difficulty in finding and agreeing new location(s) for bulk liquid industry. Has potential to delay development of Headland Public Space. (g) Third Harbour crossing (tunnel vs bridge) Current preference is for a tunnel. Any delay in the decision will adversely affect investment in Westhaven and Wynyard Quarter. (h) Air and Water quality Emissions from port and cruise activities. Timing of St Mary’s Bay stormwater outfall delayed. Impact on Wynyard Quarter and Westhaven developments. (i) Climate change Increased risk of storm surges, rising sea levels etc due to waterfront location. (j) Political risk The Auckland waterfront is a highly visible 'face' of Auckland and adverse publicity can affect the reputation of a range of stakeholders.

7.11 Mitigation strategies have been identified, where possible, to deal with these challenges. The following principles have been used in developing these strategies:

 In order to clearly illustrate to the market the extent of transformational change required and the quality aspired to, Waterfront Auckland uses exemplar development of assets to create precedents that the market can follow. Measurement against these precedents is a key part of ensuring an international standard of environmental performance, resilience, and architectural and urban design while maintaining affordability and providing utility delivery.

 In planning for and implementing transformational change through the creation of excellent strategy and policy, Waterfront Auckland adopts international best practice, as a matter of principle seeks out leading experts in their respective fields and applies this intellectual knowledge to ensure delivery of outcomes. The Technical Advisory Group is one such forum employed that illustrates application of this principle.

 An open door policy is a fundamental part of providing key stakeholders access to decision-making which affects stakeholder interests in the Area of Influence. Collaborative cooperation is fundamental to aligning competing interests and agreeing pragmatic solutions to ensure delivery of outcomes.

 Innovation will be applied to devise appropriate strategies which can assist in overcoming difficult technical issues. Contamination is such an area where new and innovative ways of dealing with contamination can complete remediation in a balanced way to better achieve financial and non-financial outcomes.

 Waterfront land is classified as a key strategic asset. As such, the freehold interest is to be retained in public ownership. Within this context, however, there is opportunity for a range of deal mechanisms to appropriately share risk and reward with the private sector.

 To secure appropriate private sector investment in these difficult times, Waterfront Auckland is open to the concept of mixed ownership across the waterfront portfolio. Waterfront Auckland will proactively investigate the optimal structure for attracting private sector equity participation on the waterfront.

 A strategic approach to the Area of Influence is important in terms of potential investment opportunities that, if acquired, could assist in achieving non-financial outcomes in particular. Typically, such investments will be of a short to medium term duration with careful consideration given to management of risk and a clearly defined exit strategy.

 Waterfront Auckland works with Council to mitigate against adverse publicity through the following: – Develop and maintain open relationships with stakeholders. – Adhere to Auckland Council's CCO 'no surprises' communications protocol. – Fortnightly strategic communications meeting of all CCOs and the Mayor's office – Monitor publicity and public sentiment daily and attend Auckland Council Media Issues daily meeting – Waterfront Auckland Board monthly updates – Quarterly public stakeholder forums and bi-monthly e-newsletter (to inform people directly rather than relying on media interpretation).

8 Accounting Policies

8.1 Waterfront Auckland will comply with the accounting and disclosure practices set out in all the relevant Financial Reporting Standards (FRS) issued by the New Zealand Institute of Chartered Accountants as periodically updated and as required by the Financial Reporting Act 1993.

8.2 The accounting policies, which form Attachment 9, are consistent with those of Auckland Council group policies.

ATTACHMENT 1 – WATERFRONT AUCKLAND PUBLIC CHARTER

Waterfront Auckland has developed a Public Charter, which communicates our vision, mission, philosophy, principles and objectives as follows:

(a) Our VISION is to be a leading contributor to Auckland’s urban and economic, social, cultural and environmental development, creating authentic and vibrant waterfront spaces for people that celebrate design excellence.

(b) Our MISSION is to deliver a waterfront which contributes to Auckland becoming “the most liveable city” by being a public waterfront, a smart and working waterfront that is growing and connected and a waterfront which is resilient and environmentally sustainable.

(c) Our PHILOSOPHY is as follows:  We welcome all Aucklanders’ participation in the development of the waterfront including diverse views.  With principled and visionary leadership, we strive to balance community and economic growth and environmental well-being.  We will describe and deliver a clear vision for the waterfront, based on international best practice across all disciplines.  We aim to protect and grow asset value consistent with the Waterfront Plan, therefore contributing to Auckland Council’s vision of Auckland as the world’s most liveable city.  We aim to be a leading voice for bold, contemporary ideas, and the champions of a design led approach  We will promote, collaborate and, where necessary, intervene to ensure a sustainable, resilient and productive waterfront.

(d) Our PRINCIPLES are:  We are a results and delivery-oriented organisation.  We take a lead with non-statutory design process to emphasise and achieve quality city building.  Our design (urban, engineering, architectural, industrial, sustainability) is consistent with international best practice, progressive thinking and innovation.  We respect iwi and reflect our maritime heritage as cornerstones of the design process.  Waterfront Auckland retains master planning role over project life to ensure delivery of outcomes.  We maintain public ownership of strategic land and water-space assets as a means of influencing direction.  We acknowledge the role of the private sector collaborating, wherever beneficial, in any aspect of the development process and will intervene where the private sector is unwilling or unable to lead.  We develop and invest in important marginal projects where necessary to achieve desired non-financial outcomes.  Our solutions are bold, financially prudent and commercially successful.  We manage proactive relationships with the shareholder and all relevant stakeholders.

(e) Our core VALUES are:  Be respectful custodians of a precious place.  Behave consistently with an inclusive and transparent approach.  Create an environment of caring and respect; to customers, staff, all stakeholders and the public.  Foster and maintain important relationships within the organisation, Auckland Council and within the community.  Work actively to protect the people, environment, knowledge, culture and resources important to all Aucklanders for future generations.  Pursue knowledge and ideas that will strengthen and grow our community.  An openness to receive new ideas and not to be afraid of challenging accepted orthodoxies that foster and encourage creativity to continually break new ground.  Encourage continuous learning, sharing knowledge, information and experience.

(f) We have a number of development OBJECTIVES – we aim to:  Facilitate economic revitalisation of the waterfront with emphasis on increasing employment opportunities and choices.  Create a harbourside community where people can live, work and play in the same environment. One with a sense of place, a unique character, a community focus, accessible to all.  Create residential areas that provide a variety of housing types and sizes.  Create commercial / retail development that complements the CBD.  Create a highly accessible, continuous waterfront.  Provide an efficient public transportation link in the CBD region; ensure adequate traffic circulation and provide a variety of transportation choices.  Enhance the heritage of the site through adaptive reuse of heritage structures and preservation of existing landmarks / artefacts.  Create a comprehensive, integrated network of cycle and pedestrian paths, and public open space maximising open spaces along the shoreline; provide a variety of waterfront experiences designed to add vitality and interest to the waterfront.  Create an environmentally and ecologically sustainable development.

ATTACHMENT 2 – AREA OF OWNERSHIP AND INFLUENCE

ATTACHMENT 3 – CONTRIBUTION TO COUNCIL OBJECTIVES

Table 7: Contribution to Council Objectives Auckland Plan Outcomes How we will contribute Strategic Direction Priority / Target Reference Lead and deliver Contribute and Collaborate A strong, inclusive and Put children and young people SD1 - priorities WA will seek to develop a diverse, resilient WA will work with Council and other equitable society that first; 1, 2, 3 community in the Wynyard Quarter Area of stakeholders to ensure the provision of provides opportunity for all Improve education health and Ownership. WA will ensure spaces and social and community infrastructure and Aucklanders safety; activities for all age groups including children services, open space and transport. and consider safety in all design and Strengthen communities development. WA has developed resilient community objectives and will develop a residential and community infrastructure strategy. Enable Maori aspirations Support sustainable SD2 – priority 5 WA is committed to the inclusion of Maori Auckland Council IMSB has developed through recognition of the development of Maori culture, philosophies and the Maori economy the Maori Plan to guide council’s Treaty of Waitangi and outcomes, leadership, as vital and desirable threads that need to be operations. WA will continue to engage customary rights community and partnerships woven through the waterfront development. with IMSB on priority actions at the WA has regular liaison with Iwi and will waterfront. develop a Maori stakeholder relationship plan to ensure ongoing engagement with Maori at both a strategic and project level to identify economic, cultural and social opportunities and advance environmental outcomes. A Maori cultural heritage trail will be developed as part of Westhaven Promenade. The integration of arts, Value and foster Auckland's SD3 - priorities WA will deliver an activation strategy WA will work with key stakeholders (e.g. culture, heritage, and lifestyle cultural diversity. 1, 2 WA has developed a public art policy and will ATEED) on delivery of events into the everyday lives of Value artists, creative sector work with Auckland Council’s Public Art Team (supporting Auckland's arts and Auckland’s residents and and institutions. and deliver public art. culture). visitors. WA will facilitate the ATC theatre project (if WA will support the arts and creative this progresses) sector businesses to locate in the Wynyard Quarter as part of the Innovation hub. WA will support (and deliver) projects that celebrate the areas cultural (including Maori, Pasifika, Asian and Pakeha) heritage. Protect and preserve Understand, value and share SD4 – priorities WA will lead (and invest where appropriate) in WA has completed a heritage

Auckland Plan Outcomes How we will contribute Strategic Direction Priority / Target Reference Lead and deliver Contribute and Collaborate Auckland’s historic heritage our heritage. 1, 2 the preservation of historic heritage at the assessment for the waterfront and will for the benefit and enjoyment Invest in heritage. waterfront, e.g. Vos and Brijs project. develop a heritage trail project and of present and future interpretive materials. generations Promote individual and Provide quality opportunities SD5 priorities 1, WA will deliver the Daldy Linear Park (Stage WA will work with ATEED to ensure that community wellbeing through for all Aucklander’s to 3 1) open space which will provide opportunities the major sporting and recreation participation and excellence participate in recreation and for passive recreation and for walking and events on the waterfront run smoothly in recreation and sport sport. cycling (and will maintain the Silo park and are economically successful. Maximise contribution of sport playground, ball court and open spaces for to economy. public passive and active recreation). WA will upgrade the Waitemata Plaza to improve its suitability for passive recreation and public enjoyment. WA will deliver the Westhaven Promenade.

An economy delivering Develop an innovation hub of SD4 priorities 2, WA will lead the urban regeneration of the WA will work with partners and opportunities and prosperity the Asia-Pacific Rim. 3 Wynyard Quarter Central Precinct (including stakeholder groups on developing an for all Aucklanders and New Become internationally innovation hub and marine facility) and innovation hub (supporting a productive Zealand connected and export driven commercial development of marinas. high level economy) and supporting existing marine and fishing industries

WA will work with ATEED to ensure that development, activation and events support the tourism and visitor strategy. Develop a creative, vibrant SD4 Priority 5 + WA is leading the sustainable transformation international city. Action 1 of the Wynyard Quarter (within its Area of Ownership) into a mixed use, vibrant city neighbourhood (consistent with the vision and A revitalised waterfront that is goals of the waterfront plan). WA will act in a a key destination and events commercial way to achieve development venue for businesses, outcomes, including investing in projects and residents and visitors, and is places that secure high quality urban united with the City Centre. transformation outcomes. Acknowledging that nature The protection of Auckland’s SD7 – priority 3 WA will manage storm-water from its land WA will work with Auckland Council, and people are inseparable high value coastline, harbours using low impact design approaches. Watercare and Ports of Auckland to and marine areas. WA will manage increasing demands for improve water quality of the Waitemata harbour and marine access in accordance Harbour.

Auckland Plan Outcomes How we will contribute Strategic Direction Priority / Target Reference Lead and deliver Contribute and Collaborate with Waterfront Plan and leases. WA will contribute to marine spatial planning for the Waitemata Harbour. Building resilience to natural SD7 – priority 4 WA will plan for natural hazards in hazards accordance with local and national guidance and will participate in the Council Natural Hazards Framework development. Sustainably manage natural SD7- priority 2, WA will develop Wynyard Quarter in a way WA will work with Auckland Council and resources Dir 5.8, Dir 5.10 that reduces energy and water use and CCOs to deliver council sustainability waste generation and investigate the potential goals and showcase sustainable for an “eco precinct”. WA has developed a development. Sustainable Development Framework and sustainability standards for future development. Value our natural heritage SD7 - priority 1 In the design of public open space WA will use plants that reflect natural heritage and enhance biodiversity. Auckland will play its part in A 10-20% reduction in human SD8 - target, Preliminary analysis shows that the Wynyard WA will collaborate with Council and tackling climate change and induced greenhouse gas Box 6.2 options Quarter can demonstrate a significant stakeholders on the implementation and increasing energy resilience emissions by 2020 (based on to reduce GHG reduction in GHG emissions. WA will monitoring of this target as well as the 1990 levels) 40% reduction by emissions advocate the role that the waterfront can play implications of sea level rise. WA will 2040, 50% reduction by 2050 in achieving this target: including designing participate in the Council’s climate for sustainable transport (reducing change adaptation framework emissions), increasing energy efficiency of development. buildings and public space; the potential for a low emissions precinct; the opportunity for renewable energy generation. WA will plan and design development to be resilient to sea level rise and increasing storm events, based on expert advice.

Auckland Plan Outcomes How we will contribute Strategic Direction Priority / Target Reference Lead and deliver Contribute and Collaborate Creating a stunning city Good design in all SD10 – priority WA has a goal to achieve outstanding design WA will support and use the Auckland centre with well connected development. 2, Boxes 10.1 and architecture. WA will use an external Design Manual quality towns, villages and and 10.2 and design review process, a multifaceted design neighbourhoods LTP talent pool (including urban and environmental design, architecture, engineering and sustainability). WA has developed design guidelines for the next stage of development. Realise a quality compact city SD10 - priority WA will develop the Wynyard Quarter as a 1 compact higher density walkable mixed use neighbourhood. Uniting the waterfront with the SD8, CCMP WA will investigate and develop the tram WA will work with Auckland Transport, city centre - the North-South transformational service from Wynyard to Britomart or an Council and other stakeholders on a stitch move 1 alternative low impact, high frequency, high range of initiatives (in the Waterfront volume waterfront-wide transit service. Plan and CCMP) to improve the connectivity, safety and accessibility between the City and waterfront. WA is a partner in the Harbour Edge Project to upgrade Quay Street. Appropriately housing all Increase housing supply, SD11 - priorities WA will seek to optimise the residential Aucklanders housing choice and improve 1, 2, 3 population in the Wynyard Quarter Area of quality of new housing. Ownership and encourage a mix of housing typologies and apartment sizes. Maintaining and providing The provision of community SD12- priority 3 WA will plan for appropriate community quality infrastructure to make infrastructure including public infrastructure and services to develop an eco- Auckland liveable and open space and marinas, for precinct and work with providers to ensure resilient present and future generations timely delivery WA will develop public open space within its Area of Ownership in accordance with the District Plan. WA will further develop marinas in accordance with the Waterfront Plan and in consultation with the industry.

Water, wastewater and storm- SD12 - priorities WA will work with Watercare, Auckland water; energy and 1, 2 Transport and other infrastructure telecommunications providers to ensure land use and

Auckland Plan Outcomes How we will contribute Strategic Direction Priority / Target Reference Lead and deliver Contribute and Collaborate infrastructure development is integrated and resilient. Better connections and Integration of transport SD13- priority 2 WA will investigate and develop the tram WA will work with Auckland Transport to accessibility within Auckland, planning and investment with service from Wynyard to Britomart or an ensure land use and transport across New Zealand and the land use development with a alternative low impact, high frequency, high integration and the delivery of the world particular emphasis on volume waterfront-wide transit service. Waterfront Plan and Wynyard Quarter pedestrians and passenger Transport Plan. transport

WA will encourage pedestrians, cyclists and WA participates in and supports the Increase non-car trips in the SD13 - target passenger transport use through the design Travel Management Association for the peak period from 23% to 37% of the waterfront. Wynyard Quarter. of all trips by 2040

Table 8: Contribution to Long-term Plan Priorities

Long-term Plan Priorities How we will contribute Outcome Priority Reference Lead and deliver Contribute and Collaborate A productive high value Sectors of focus – marine and Letter of Develop facilities and marine waterspace to Collaborate with council agencies, economy tourism Expectation increase the productivity of the marine and government and the private sector to page 3 fishing industry. deliver projects that contribute to the Plan for commercial developments that add development and growth of the marine value to both marine and tourism industry. and tourism industry. Manage the development of a new facility to Collaborate with AT to extend the strengthen Auckland’s position in the market tramline from Wynyard Quarter to for superyacht refit and commissioning. Britomart, increasing access of the waterfront to tourists. Manage the development of an innovation hub that will attract talent and investments on Coordinate with ATEED in the delivery knowledge- intensive marine research. of events that contribute to the development of the marine sector and Implement a progressive cruise strategy that which attracts tourists to the waterfront. will address the short, medium, and long term needs of the cruise and tourism market. Advocate for Council and government policies that help improve the business Facilitate the development of a hotel at environment for marine and tourism Viaduct Harbour to increase activation and investments. attract tourists to the waterfront.

Urban, rural, natural Design standards and Letter of Develop design guidelines and plans that Collaborate with Council to deliver environments protecting built heritage Expectation promote and protect Auckland waterfront’s projects that promote high quality page 3 uniqueness and built heritage. design and enhance built heritage. Plan for the development of facilities and Support Council’s urban design review exemplar projects that enhance the public process. realm and built heritage. Support the development of external Maintain a high-calibre group of design and projects that promote high design heritage consultants, through a Design Talent quality and enhanced built heritage. Pool. Contribute to the development and use of policy and market incentives to encourage use of urban design standards and protect built heritage.

Long-term Plan Priorities How we will contribute Outcome Priority Reference Lead and deliver Contribute and Collaborate Commercial focus Waterfront Auckland is to act Letter of Lead the development of commercial projects Support external projects that contribute in a commercial way to Expectation that result in a positive net present value to the development of the waterfront’s achieve development page 3 benefit to key sectors i.e. marine, fishing, key business sectors. outcomes, including investing tourism, and cruise. Venture with other government and in projects and places that Deliver a programme of public projects that private agencies to deliver projects that secure high quality urban offers opportunities for immediate activation, require significant capital investment. transformation outcomes business development, agglomeration, and linkage with other businesses in the waterfront. Plan and develop projects that promote the interest and continued satisfaction of customers.

Table 9: Contribution to Local Board Priorities

Local Board plans reflect the community’s aspirations and priorities, desired projects and potential funding. These have been considered when developing the LTP.

The following table outlines relevant priorities and objectives at a service delivery level in the Waitemata Local Board Plan and outlines how we will contribute to these:

Local Board Priorities How we will contribute Priority Objective Reference Lead and deliver Contribute and Collaborate A distinctive high quality Represent the original Local Board Deliver a Waterfront Plan that promotes Advocate and collaborate with AT to built environment that coastline through a “thin Plan page 13 Foreshore Avenue as a key initiative to develop the Foreshore Avenue project to embraces its heritage blue line” represent the original coastline. emphasise historical shoreline and provide opportunity for future heritage trail development. Places for people Develop green links to Local Board Deliver public parks that contribute to the Advocate for a waterfront walkway and develop our parks Plan page 28 development of green links. cycleway to connect public parks within, Deliver the waterfront walkway-cycleway from across, and beyond the waterfront area. Westhaven to Wynyard Quarter Support the development of the Green Link project of the City Centre Masterplan. Deliver legible and consistent signage across the waterfront. Improve signage of public Local Board Contribute to Council’s CBD signage spaces Plan page 28 projects, ensuring they highlight the Deliver new interactive opportunities or play waterfront’s public places. spaces at Waitemata Plaza and Daldy Linear Create extra play spaces Local Board Park and plan for the development of future Plan page 28 play spaces across the waterfront. Strong, vibrant, engaged Develop and support events Local Board Develop event facilities, spaces, and public Collaborate with ATEED and Council to communities that are locally specific and Plan page 21 art that promote local culture and ensure that a significant number of environmentally responsible environmental awareness. community events occur regularly at the waterfront. Lead the delivery of events that promote our Coordinate with Council in developing event local culture and businesses, and strategies that ensure environmental environmental awareness. responsiveness.

Local Board Priorities How we will contribute Priority Objective Reference Lead and deliver Contribute and Collaborate Connected, healthy Improve cycle infrastructure Local Board Deliver the walkway and cycleway from Advocate for a waterfront walkway and transport options in the waterfront area Plan page 17 Westhaven to Wynyard Quarter cycleway from Harbour Bridge Park to TEAL through an increase in Park and subsidiary routes that connect to connected, dedicated the main walkway. cycleways Deliver Daldy Linear Park (stage 1) which will include facilities for walking and cycling. Collaborate with AT, NZTA, and walking/cycling groups to determine capacity, facilities, connectivity of the waterfront walkway with existing networks. Support the development of projects that improve the connectivity of the waterfront walkways/cycleway with the regional network.

ATTACHMENT 4 – PERFORMANCE MEASURES

ATTACHMENT 5 – ASSETS

Waterfront Auckland owns over $470 million worth of assets, extending from Harbour Bridge Park in the west to Teal Park in the east, based on valuations received for 30 June 2012.

Its asset portfolio comprises a range of assets including various investment land holdings, commercial property, marina, water-space and public space assets. In addition, there are also a number of wharves including a joint venture interest in Queens Wharf.

Assets are classified as Commercial Property, Marina, and Public Spaces as shown in the pie graph in section 4.2, Figure 1.

Marina assets

Westhaven Marina environs consists of buildings such as administration buildings, sailing clubrooms, public toilets, commercial buildings and water borne assets - piers, swing moorings and pile moorings. All buildings and car parks are considered commercial property assets under the Waterfront Auckland operating model. Curran St Extension, Westhaven Drive, and paths are considered Public Spaces.

Assets included for the Marina activity include Westhaven Marina, Hobson West Marina and Viaduct Harbour Marina, specifically:

 Westhaven marina land based structures such as boat ramps and breakwaters.  Westhaven marina floating structures: including 25 piers (1,474 berths), pontoons, 333 pile moorings, 45 swing moorings, jetties and access bridges.  Westhaven marina connected utilities networks (power, potable water, storm water, security, IT)  Silo Park marina floating structures including three 90 metre super yacht berths constructed in 2010 adjacent to the old Cement Wharf on the western edge of Wynyard Quarter.  Hobson West marina floating structures including piers and pontoons (22 inner berths, one outer berth)  Hobson West connected utilities networks (power, potable water, security, IT)  Hobson wharf extension  Viaduct Harbour marina  Water-space and 23 marina berths around Te Wero island  Water-space and marina berths between the old Team NZ building and Halsey Street Extension Wharf.  Travelift and vessel maintenance hard-stand area on Halsey Street Extension Wharf  Shares in Downtown Marinas Limited and Westhaven Marina Limited

Notes:

 The Wynyard Crossing pedestrian and cycle bascule bridge (lifting) is operated on a 24 hour basis by the marina business unit but is owned and maintained by Auckland Council.

 The Okahu Bay Landing is managed by the marina business unit although owned by Auckland Council, with a supplier agreement in place for hardstand and haul out. Discussions are in progress as to how to best continue the arrangement.

Commercial property

Waterfront Auckland owns a large number of property assets that were principally inherited from Auckland Regional Holdings. These are mainly in the form of commercial ground leases that were purchased from Ports of Auckland.

On 1 November 2010, Waterfront Auckland also took over the lessee’s interests in the former Auckland City Council owned block on Pakenham Street and now owns both lessor’s and lessee’s interests in these sites. This block forms the majority of the Wynyard Central Precinct and these interests will be dealt with once the future for the precinct is agreed.

Property includes:

 Buildings and water spaces in Wynyard Quarter and Westhaven  Income-generating activities including car-parking and ground leases (approximately 93 leases for rent)

Public spaces

Waterfront Auckland owns and maintains a range of public spaces, specifically:

 Half share in Queens Wharf  Hobson Wharf (not including the Maritime Museum building)  Halsey Street Extension Wharf (not including the Viaduct Events Centre building)  North Wharf  Silo Park  Wynyard Wharf  Harbour Bridge Park  Wynyard Precinct Public Spaces e.g. Karanga Plaza  Wynyard Headland Public Space  Viaduct Harbour Public spaces e.g. Waitemata Plaza  Teal Park  Freehold land from Harbour Bridge Park to Z pier up to and excluding Westhaven Drive and Curran Street Extension.

ATTACHMENT 6 – DESCRIPTION OF STRATEGIC PROJECTS

Brief descriptions of the strategic projects set out in Table 5, Section 5 (II) are as follows:

1. Daldy / Halsey Streets and Linear Park - Construction /reconstruction of a new linear park including roadway, cycleway and pedestrian paths to the north south Daldy Street and Halsey Street axis between Jellicoe Street and Pakenham Street

2. Pakenham Street – upgrade of this public street to align with the objectives and outcomes of the Halsey and Daldy street upgrades.

3. Madden Plaza - Construction of a new public plaza area at the eastern end of Madden Street (to the east of Halsey Street) to provide a continuous public connection to the Viaduct Harbour and interface with the proposed Hotel development site

4. Madden / Jellicoe Western Edge - Construction of a new seawall, wharf refurbishment and urban realm enhancement to the western edge between Jellicoe Street and Madden Street

5. West Edge Promenade and Park - Construction of a new seawall and urban realm enhancement to the western edge north of Silo Park

6. Point Park – a new public park developed as a result of the seawall realignment at the northern end of Wynyard Point. This will include the addition of a harbour and berthage as a permanent home for Auckland’s classic yacht and launch fleet.

7. Contamination remediation of public spaces - Provision for remediating public realm in-ground contamination during the process of reconstruction / urban renewal

8. Pre-development expenditure - Other predevelopment and consultancy expenditure for public works

9. Jellicoe Plaza - A new public plaza area at the junction of Jellicoe Street and Daldy Street to provide a connection between adjacent private development sites and the Jellicoe Street public realm

10. Tram connection to Britomart - Extension of existing Wynyard tram line to Britomart. Note: this does not include the cost of a bridge across to Te Wero Island.

11. Teal Park – car park upgrade at Teal Park

12. Central Wharves Public Works (Quay Street) – the integration of Queens Wharf to Quay St including Auckland’s ferry transport service, events and cruise activities.

13. Waitemata Plaza landscaping upgrade - Landscaping upgrade to introduce grass and shade trees convert to the existing hard paved surface.

14. Westhaven Promenade - Construction of a continuous walkway and cycleway from the Harbour Bridge to Fanshawe Street

15. Westhaven Marina operations asset renewal - Asset renewals for Westhaven Marina non-water based assets e.g. toilet blocks, utilities etc, per the Asset Management Plan (AMP)

16. Wynyard Quarter Marine Precinct (Superyacht re-fit) - The development of a dedicated marine industry facility at Sites 18 and 26, Wynyard Quarter; creating up to six additional superyacht berths, a large marine hardstand facility, and temporary buildings for marine-related retail and industry. The project further develops the marine industry and activates Beaumont and Jellicoe Streets.

17. Marina development - Replacing “end of life” pile moorings with 300 serviced berths, and other developments as per the Westhaven Plan

18. Commercial Property asset renewals - Commercial property asset renewals per the Asset Management Plan (AMP)

19. Innovation Precinct (Stage 1)Site 38/38A – Adaptive re-use of Lysaght building as Stage 1 of the development of a major innovation hub that will create, attract and grow world-class research, talent and technology based ventures. Project includes construction of an atrium alongside Southern Spars building.

20. Westhaven Marine Centre Stage 1 (Platform 2) – pre-development works for the proposed marine industry cluster of 3-5 premises on the Platform 2 site in Westhaven Marina. The village will comprise a mix of office, retail, and residential premises (all of which are marine related), and will include the portion of the waterfront promenade immediately adjacent to the site.

21. Wynyard Quarter Central Area private works - Predevelopment expenditure on Wynyard Quarter central sites for preparation of private investment such as Auckland Theatre Company, Hotel, Marina Precinct, commercial car parking etc

ATTACHMENT 7 – MAP OF STRATEGIC PROJECTS

ATTACHMENT 8 – CONTRIBUTION TO MAORI OUTCOMES

Waterfront Examples of current Contribution to Maori Plan Future opportunities (which Notes 2012/2013 2013/2014 Annual Auckland LTP contributions of Key Directions (or potential touch on Maori Plan focus Anticipated Anticipated amount projects projects to Maori to contribute) areas) Spend Spend going wellbeing (key forward directions identified in the Maori Wellbeing Plan – draft) Iwi consultation Monthly meetings with Wairuatanga – promote To express Maori cultural Consultation meetings CAPEX: CAPEX: CAPEX: Iwi groups to distinctive identify values and heritage. are with Ngati Whatua, $50,000 $50,000 $50,000 pa consult/seek advice Kaitiakitanga – ensure To incorporate Maori urban Ngati Paoa, Ngai Tai, on current and future sustainable futures design principles; Ngati Whanaunga Allocated to Allocated to Allocated to projects Manaakitanga – improve Maori tourism businesses and Costed into the capital Maori GL Maori GL Maori GL quality of life products projects at a given period codes codes codes of time. Events and Cruise, Maori art project – Wairuatanga – promote To incorporate Maori urban Maori artwork at CAPEX: Shed 10 investment in Maori distinctive identify design principles; entrance of Queens $150,000 arts and culture. PV Kaitiakitanga – ensure Maori tourism businesses and Wharf Cruise Terminal panels – use of sustainable futures products Included in sustainable energy Manaakitanga – improve Opportunity for story- Cruise ship sources. quality of life telling of Maori history in capital project Shed 10 project brief Daldy/Halsey Indigenous flora, Kaitiakitanga – ensure To express Maori cultural An agreement has been CAPEX CAPEX CAPEX biodiversity, access to sustainable futures values and heritage. reached to procure $50,000 $150,000 c$100,000 pa high quality and Whanaungatanga – develop plants from Ngati affordable transport vibrant communities Whatua nursery for Included in Included in Included in and public facilities Wairuatanga – promote waterfront projects, Daldy/Halsey Daldy/Halsey Daldy/Halsey (open space). distinctive identify where possible. capital project capital project capital project Discussing the cost cost cost development of a stock of larger trees for future planting. Remediation Environmental Manaakitanga – improve improvement quality of life Public spaces e.g. Wairuatanga – promote To incorporate Maori urban Native planting as per Waitemata Plaza, distinctive identify design principles Daldy/Halsey above. Western edge Kaitiakitanga – ensure Indigenous flora, environmental Refer also Heritage Trail promenade, sustainable futures improvement and Maori culture below. Madden Jellioce Manaakitanga – improve values and heritage. Access to Plaza, Beaumont quality of life clean parks and waterways.

Westhaven Marina Improve water quality Kaitiakitanga – ensure Incorporate Maori cultural No economic

Waterfront Examples of current Contribution to Maori Plan Future opportunities (which Notes 2012/2013 2013/2014 Annual Auckland LTP contributions of Key Directions (or potential touch on Maori Plan focus Anticipated Anticipated amount projects projects to Maori to contribute) areas) Spend Spend going wellbeing (key forward directions identified in the Maori Wellbeing Plan – draft) Development sustainable futures values and heritage and urban opportunities currently for Wairuatanga – promote design principles in future Maori distinctive identify development. Reclamation – land Manaakitanga – improve ownership? quality of life WQ Super yacht Manaakitanga – improve Opportunity for jobs and skills A specific programme refit quality of life development, supporting would need to be increased income and established opportunity Innovation Precinct Rangitiratanga – enhance Opportunity for jobs and skills A specific programme to leadership and participation development and support for attract Maori businesses Wairuatanga – promote emerging and established will need to be distinctive identify Maori business, supporting established increased income and opportunity Walkway and Improved accessibility Whanaungatanga – develop To express Maori cultural Need to include in EOI cycleway vibrant communities values and heritage, urban for opportunities to be Wairuatanga – promote design principles, indigenous realised. Refer Heritage distinctive identify flora. Potentially supports new Trail below. tourism businesses. Queens wharf Wairuatanga – promote To express Maori cultural Refer Placemaking public park distinctive identify values and heritage, urban below. Kaitiakitanga – ensure design principles. Potentially sustainable futures supports new tourism businesses. Wynyard Central Wairuatanga – promote Inner city housing and Programmes to Precinct distinctive identify community facilities, Maori specifically target Maori Kaitiakitanga – ensure education and capacity building involvement would be sustainable futures (innovation precinct), required. Offer for Manaakitanga – improve employment, Maori business investment in Wynyard quality of life development. Maori urban Quarter to be made to design principles and Maori Statutory Board indigenous flora. Investment and tribes. Refer opportunities. Placemaking below.

Heritage Trail Wairuatanga – promote Express cultural values and Cultural and heritage CAPEX: $10,000pa

Waterfront Examples of current Contribution to Maori Plan Future opportunities (which Notes 2012/2013 2013/2014 Annual Auckland LTP contributions of Key Directions (or potential touch on Maori Plan focus Anticipated Anticipated amount projects projects to Maori to contribute) areas) Spend Spend going wellbeing (key forward directions identified in the Maori Wellbeing Plan – draft) distinctive identify heritage, increase accessibility trail along Westhaven $120,000 (OPEX) to Maori culture, support sense promenade and around of pride and belonging. past North Wharf. Making use of wayfinding/QR codes for cultural education, recognition of sites of significance to Iwi. At the very least a brochure for a self guided walking tour. (Maori business opportunity). Sustainability Manaakitanga – improve Incorporate Maori world view, Project briefs/EOIs will outcomes and quality of life sense of pride and belonging, need to specifically seek investigations Wairuatanga – promote sustainable futures, resilience, Maori world view and distinctive identify environmental improvement, input. social wellbeing. Access and Could specifically seek to use of sustainable energy attract Maori educational resources. Maori business services (e.g. kura opportunities. kaupapa language nests) if education is pursued as a specific community infrastructure. Place making, Cultural values and Wairuatanga – promote Promote Maori cultural values Annual Matariki festival in $85,000 OPEX $85,000 $85,000 pa Activation Strategy heritage (North Wharf distinctive identify and heritage, provide conjunction with (Direct OPEX OPEX and events, Public Workshops, Waka Kaitiakitanga – ensure accessibility to Maori culture, Auckland Council. contribution (Direct (Direct Art Festival, Mahuhu sustainable futures enable participation of Maori >80%) contribution contribution restoration project, Whanaungatanga – develop communities, Maori business >80%) >80%) Matariki festival, vibrant communities opportunities, education re Heritage Festival, Manaakitanga – improve Maori culture/heritage/values to ongoing scheduling of WQ audiences quality of life Provision of Shed 10 and In kind (value In kind (value In kind (value blessings etc where The Cloud for Matariki $15,000 opex) $15,000 opex) $15,000 opex) appropriate,

Anniversary Weekend, Atamira Provision for Shed 10 In kind (value Maori in the City). and The Cloud for the $216,000 biennial Atamira Maori in opex) the City festival (value $216,000).

Under investigation is a TBA

waterfront and within events.

‘Ground breaking’ or $10,000 OPEX $10,000 $10,000 pa ‘turning of the soil’ OPEX OPEX blessings are held at commencement of new construction projects, and Powhiri events for openings of new public spaces and or buildings. $5,000 OPEX $5,000 OPEX $5,000 pa Koha OPEX

Taonga Rangatira CAPEX: “treasure” to be worn by $30,000 Waterfront Auckland leaders

Cultural content included $5,000 OPEX $5,000 OPEX $5,000 OPEX within annual programme

of North Wharf Workshops, including workshops based on flora, cultural skills, navigation etc

Cultural Element (Waka $5,000 OPEX $10,000 and on land activity) OPEX included as part of Auckland Anniversary Celebrations Quay Street Whanaungatanga – develop Improved accessibility, Maori

Waterfront plan – longer term projects and opportunities Harbour Bridge Wairuatanga – promote To express Maori cultural Park distinctive identify values and heritage, urban Manaakitanga – improve design principles, indigenous quality of life flora, clean parks and reserves. Potentially supports new tourism businesses. St Mary’s Bay Wairuatanga – promote To express Maori cultural Open Space distinctive identify values and heritage, urban Manaakitanga – improve design principles, indigenous quality of life flora. Potentially supports new tourism businesses. Westhaven Drive Whanaungatanga – develop Improved accessibility and Auckland Transport vibrant communities safety Headland Park Wairuatanga – promote To express Maori cultural distinctive identify values and heritage, urban Kaitiakitanga – ensure design principles, indigenous sustainable futures flora. Potentially supports new Manaakitanga – improve tourism businesses. quality of life Signature Public Wairuatanga – promote A Maori cultural institution of Kiwa proposal amongst Building distinctive identify some type would be investment the many ideas for a Kaitiakitanga – ensure in Maori arts and culture, future public building. sustainable futures support sense of pride and belonging, reflect Maori cultural values and heritage and incorporate Maori urban design principles. Wynyard Yacht Kaitiakitanga – ensure Berthage of waka and vaka, Five double-hulled waka basin sustainable futures supporting Maori participation launched on the Wairuatanga – promote in communities, culture and Waitemata in 2010. distinctive identify heritage, recreation/health,

ATTACHMENT 9 – ACCOUNTING POLICIES

The preparation of financial statements in conformity with NZ IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Auckland Council Group’s accounting policies.

(a) Consolidation

The consolidated financial statements are prepared by adding together like items of assets, liabilities, equity, income, and expenses on a line-by-line basis. All significant intra-group balances, transactions, income, and expenses are eliminated on consolidation.

SUBSIDIARIES

Subsidiaries are all those entities over which Waterfront Auckland has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether Waterfront Auckland controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to Waterfront Auckland. They are deconsolidated from the date that control ceases. Waterfront Auckland’s financial statements show the investment in subsidiaries at cost, less any impairment. Inter-entity transactions, balances and unrealised gains on transactions between Group entities are eliminated on consolidation. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been aligned where necessary to ensure consistency with the policies adopted by the Group.

(b) Foreign currency translation

TRANSACTIONS AND BALANCES

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation at period end exchange rates of monetary assets and liabilities, are recognised in the statement of comprehensive income.

Property, plant and equipment consists of land, buildings, civil structures (including wharves), plant and machinery, computer equipment, furniture fittings and equipment and motor vehicles.

INITIAL RECOGNITION

Property, plant, and equipment is shown at cost or valuation, less accumulated depreciation and impairment losses, if any. In the case of the assets acquired by Waterfront Auckland on establishment at 1 November 2010, cost was the carrying value of the asset by the disestablished council or disestablished CCO.

SUBSEQUENT MEASUREMENT

Land, buildings and civil structures are revalued with sufficient regularity to ensure that their carrying amount does not differ materially from fair value and at least every three years. All other classes of assets are measured at historical cost less accumulated depreciation and accumulated impairment. Each year, Waterfront Auckland and group considers the adequacy of the valuation of its assets to ensure the carrying value reflects fair value. If there is a material difference, then the off-cycle asset classes are revalued. Revaluations of property, plant and equipment are accounted for on a class of asset basis.

Net revaluation results are credited or debited to other comprehensive income and are accumulated to an asset revaluation reserve in equity for that class of assets. Where this would result in a debit

balance in the asset revaluation reserve, this balance is not recognised in other comprehensive income but is recognised in the surplus or deficit in the statement of comprehensive income.

If a revaluation increase reverses a decrease previously recognised in the surplus or deficit in the statement of other comprehensive income, the increase is recognised first in the surplus or deficit in the statement of other comprehensive income to reverse previous decreases. Any residual increase is applied to revaluation reserves in equity.

ADDITIONS

The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits or service potential associated with the item will flow to Waterfront Auckland and group and the cost of the item can be measured reliably. Property, plant and equipment is recognised at its cost. Where an asset is acquired at no cost, or for a nominal cost, it is recognized at fair value as at the date of acquisition.

DISPOSALS

Gains and losses on disposal are determined by comparing the proceeds with the carrying amount of the asset. Gains and losses on disposals are reported net in the surplus or deficit in the statement of comprehensive income. When revalued assets are sold, the amounts included in asset revaluation reserves in respect of those assets are transferred to accumulated funds.

DEPRECIATION

Depreciation on all property, plant and equipment, apart from land, is provided on a straight line basis at rates that will write off the cost of the assets to their estimated residual values over their useful lives. The useful lives of major classes of assets have been estimated as follows. The estimated remaining useful lives of some assets is only one year due to the timing of when the assets were acquired from the disestablished councils.

CLASS OF ASSET DEPRECIATED ESTIMATED USEFUL LIFE

Buildings 1-100 Civil structures 2-100 Office equipment 4-15 Plant and machinery 1-27 Computer equipment 3 Motor vehicles 2

The residual value and remaining useful life of an asset is reviewed, and adjusted if applicable, at each financial period end.

CAPITAL WORK IN PROGRESS

Capital work in progress is recognised at cost less impairment and is not depreciated. The total cost of a project is transferred to the relevant asset class on its completion and then depreciated.

CARRYING AMOUNT

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

(d) Investment property

Properties leased to third parties under operating leases are classified as investment property unless the property is held to meet service delivery objectives, rather than to earn rentals or for capital appreciation. Investment property is measured initially at its cost, including transaction costs. After initial recognition, all investment property is measured at fair value as determined annually by an independent valuer. Gains or losses arising from a change in the fair value of investment property are

recognised in the surplus or deficit in the statement of comprehensive income. Investment property is not depreciated.

(e) Intangible assets

Intangible assets are initially recorded at cost. Where acquired in a business combination, the cost is their fair value at the date of acquisition. The cost of an internally generated intangible asset represents expenditure incurred in the development phase only. Subsequent to initial recognition, intangible assets with finite useful lives are recorded at cost, less any amortisation and impairment losses and are reviewed annually for impairment losses. Assets with indefinite useful lives are not amortised but are tested, at least annually, for impairment and are carried at cost less accumulated impairment losses.

Realised gains and losses arising from the disposal of intangible assets are recognised in the surplus or deficit in the statement of comprehensive income in the period in which the disposal occurs. Where an intangible asset’s recoverable amount is less than its carrying amount, it will be reported at its recoverable amount and an impairment loss will be recognised. Impairment losses resulting from impairment are reported in the surplus or deficit in the statement of comprehensive income.

COMPUTER SOFTWARE

Acquired computer software licences are capitalised based on the costs incurred to acquire and bring to use the specific software. Costs are amortised using the straight line method over their estimated useful lives (three to eight years). Costs directly associated with the development of identifiable and unique software products for internal use are recognised as an intangible asset to the extent it is probable such costs are expected to be recoverable. Computer software development costs recognised as assets are amortised using the straight line method over their estimated useful lives (not exceeding three years).

RIGHTS TO OCCUPY

Rights to occupy have an indefinite life. These assets are recorded at cost and tested annually to assess whether there has been an impairment of value. This is done by comparing the carrying amount of the asset with the recoverable amount.

(f) Impairment of non-financial assets

Intangible assets that have an indefinite useful life, or are not yet available for use, are not subject to amortisation and are tested annually for impairment. Assets that have a finite useful life are reviewed for indicators of impairment at each balance date. When there is an indicator of impairment, the asset’s recoverable amount is estimated. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.

Value in use is depreciated replacement cost for an asset where the service potential of the asset is not primarily dependent on the asset’s ability to generate net cash inflows and where Waterfront Auckland or group would, if deprived of the asset, replace its remaining service potential. The value in use for cash-generating assets is the present value of expected future cash flows. If an asset’s carrying amount exceeds its recoverable amount, the asset is impaired and the carrying amount is written down to the recoverable amount. For revalued assets, the impairment loss is recognised against the revaluation reserve for that class of asset. Where that results in a debit balance in the revaluation reserve, the balance is recognised in the surplus or deficit in the statement of comprehensive income.

For assets not carried at a revalued amount, the total impairment loss is recognised in the surplus or deficit in the statement of comprehensive income.

The reversal of an impairment loss on a revalued asset is credited to the revaluation reserve. However, to the extent that an impairment loss for that class of asset was previously recognised in the surplus or deficit in the statement of comprehensive income, a reversal of the impairment loss is also recognised

in the surplus or deficit in the statement of comprehensive income. For assets not carried at a revalued amount, the reversal of an impairment loss is recognised in the surplus or deficit in the statement of comprehensive income.

(g) Investments and other financial assets

Waterfront Auckland and group classifies financial assets in the following categories:

 loans and receivables  held-to-maturity investments and  available-for-sale financial assets

The classification depends on the nature and purpose for which the financial assets were acquired. Waterfront Auckland and group determines the classification of financial assets when they are acquired. Financial assets are initially measured at fair value plus transaction costs.

Purchases and sales of financial assets are recognised at trade date, this being the date on which Waterfront Auckland and group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and Waterfront Auckland and group has transferred substantially all the risks and rewards of ownership.

(h) Loans and receivables

Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the period end date, which are included in non-current assets.

After initial recognition loans and receivables are carried at amortised cost using the effective interest rate method less impairment if any. Gains and losses when the asset is impaired or derecognised are recognised in the surplus or deficit in the statement of comprehensive income.

(i) Held-to-maturity investment

Held to maturity investments are non derivative financial assets with fixed or determinable payments and fixed maturities that the Group has the positive intention and ability to hold to maturity. They are included in current assets, except for those with maturities greater than 12 months after the period end date, which are classified as non-current assets.

After initial recognition they are carried at amortised cost using the effective interest rate method less impairment if any. Gains and losses when the asset is impaired or derecognised are recognised in the statement of comprehensive income.

(j) Available-for-sale financial assets

Available for sale financial assets are non derivative financial assets that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures, or the Group intends to dispose of it, within 12 months of the end of the reporting period.

After initial recognition they are measured at fair value, with gains and losses recognised in other comprehensive income except for impairment losses, which are recognised in the statement of comprehensive income.

(k) Impairment of financial assets

Waterfront Auckland and group reviews at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a

‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. The criteria that Waterfront Auckland and group uses to determine that there is objective evidence of an impairment loss include:

 Significant financial difficulty of the issuer or obligor;  A breach of contract, such as a default or delinquency in interest or principal payments;  It becomes probable that the borrower will enter bankruptcy or other financial reorganisation;  The disappearance of an active market for that financial asset because of financial difficulties; or  Observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the portfolio, including:

(a) Adverse changes in the payment status of borrowers in the portfolio; and

(b) National or local economic conditions that correlate with defaults on the assets in the portfolio.

The amount of loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted using the financial asset’s original effective interest rate. The asset’s carrying amount is reduced and the loss is recognised in the statement of comprehensive income in “other expenses”. If a loan or a held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, Waterfront Auckland and group may measure impairment on the basis of an instrument’s fair value using an observable market price.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in the surplus or deficit in the statement of comprehensive income.

(l) Inventories

Inventories held for distribution or consumption in the provision of services that are not supplied on a commercial basis are measured at cost adjusted for any loss of service potential. Where inventory is acquired at no cost or for nominal consideration, the cost is the current replacement cost at the date of acquisition. Inventories held for use in the production of goods and services on a commercial basis are valued at the lower of cost and net realisable value. The cost of purchased inventory is determined using the first-in first-out (FIFO) method. The amount of any write down in the value of inventories is recognised in the surplus or deficit in the statement of comprehensive income in the period of the write down.

(m) Debtors and other receivables

Debtors are amounts due from customers. If collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets. Debtors and other receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment. When a trade receivable for which the provision for impairment has been recognised becomes uncollectible in a subsequent period, it is written off against the provision for impairment of receivables. Subsequent recoveries of amounts previously written off are credited to ‘other income’ in the surplus or deficit in the statement of comprehensive income.

(n) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and subject to an insignificant risk of changes in value, and bank

overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position.

(o) Creditors and other payables

Creditors and other payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. They are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Creditors and other payables are initially measured at fair value and subsequently measured at amortised cost, using the effective interest method.

(p) Borrowings

Borrowings are initially recognised at fair value (net of transaction costs) and subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and amortised cost is recognised in the surplus or deficit in the statement of comprehensive income over the period of the borrowings using the effective interest method. Borrowings are classified as current liabilities unless Waterfront Auckland and group has an unconditional right to defer settlement of the liability for at least 12 months after the year-end date.

(q) Borrowing costs

Waterfront Auckland and group has elected to defer the adoption of NZ IAS 23 Borrowing Costs (Revised 2008) in accordance with its transitional provisions that are applicable to public benefit entities. Consequently, all borrowing costs are recognised as an expense in the period in which they are incurred.

(r) Current and deferred income tax

Income tax expense comprises both current tax and deferred tax, and is calculated using tax rates (and tax laws) that have been enacted or substantively enacted by balance date. Income tax expense is charged or credited to the surplus or deficit in the statement of comprehensive income, except when it relates to items charged or credited directly to equity or other comprehensive income.

Current tax is the amount of income tax payable based on the taxable surplus for the current period, plus any adjustments to income tax payable in respect of prior periods.

Deferred tax is the amount of income tax payable or recoverable in future periods in respect of temporary differences and unused tax losses. Temporary differences are differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable surplus.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which Waterfront Auckland and group expects to recover or settle the carrying amount of its assets and liabilities.

Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that taxable surplus will be available against which the deductible temporary differences or tax losses can be utilised. Deferred tax is not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition of an asset and liability in a transaction that is not a business combination and at the time of the transaction affects neither accounting surplus nor taxable surplus. Deferred tax is recognised on taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where Waterfront Auckland and group can control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

(s) Goods and Services Tax (GST)

All items in the financial statements are stated exclusive of GST, except for debtors and other receivables and creditors and other payables, which are presented on a GST inclusive basis. Where

GST is not recoverable as input tax, it is recognised as part of the related expense or asset. The net amount of GST recoverable from, or payable to, the Inland Revenue (“IRD”) is included as part of receivables or payables in the statement of financial position.

(t) Employee entitlements

SHORT-TERM EMPLOYEE ENTITLEMENTS

Employee benefits that Waterfront Auckland and group expects to be settled within 12 months of balance date are measured at nominal values based on accrued entitlements at current rates of pay. These include salaries and wages accrued up to balance date, annual leave earned to, but not yet taken at balance date, retirement gratuities and long service entitlements expected to be settled within 12 months, and sick leave. Waterfront Auckland and group recognise a liability for sick leave to the extent that absences in the coming period are expected to be greater than the sick leave entitlements earned in the coming period. The amount is calculated based on the unused sick leave entitlement that can be carried forward at balance date, to the extent that the Group anticipates it will be used by staff to cover those future absences.

SUPERANNUATION SCHEMES

Obligations for contributions to defined contribution superannuation schemes are recognised as an expense in the surplus or deficit in the statement of comprehensive income as incurred.

(u) Provisions

Waterfront Auckland and group recognises a provision for future expenditure of uncertain amount or timing when:

 Waterfront Auckland and group has a present obligation (legal or constructive) as a result of past events  It is probable that expenditure will be required to settle the obligation and  Reliable estimate can be made of the amount of the obligation.

Provisions are not recognised for future operating losses. Provisions are measured at the present value of the expenditure expected to be required to settle the obligation using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as an interest expense and is included in “finance costs”.

(v) Revenue recognition

Revenue is measured at the fair value of consideration received or receivable.

(i) Provision of services

Provision of services are recognised in the accounting period in which the services are rendered, by reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided.

(ii) Rental revenue

Rental revenue from operating leases is recognised as income on a straight line basis over the lease term.

(iii) Interest income

Interest income is recognised on a time proportion basis using the effective interest method.

(w) Leases

(i) Waterfront Auckland and group as Lessee

Waterfront Auckland and group leases certain property, plant and equipment. Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the surplus or deficit in the statement of comprehensive income on a straight line basis over the period of the lease. Leases of property, plant and equipment, where Waterfront Auckland and group has substantially all the risks and rewards of ownership, are classified as finance leases. Finance leases are capitalised at the lease’s commencement at the lower of the fair value of the leased property and the present value of the minimum lease payments. The leased assets (the leased properties) and corresponding liabilities (the lease payments) are recognised in the statement of financial position. Interest on finance leases is charged to the surplus or deficit in the statement of comprehensive income over the lease period. Leased assets are depreciated over the period the Group is expected to benefit from their use or the lease term if ownership at the end of the lease is uncertain.

(ii) Waterfront Auckland and group as Lessor

Assets leased to third parties under operating leases are included in investment property and property, plant and equipment in the statement of financial position. Rental income (net of any incentives given to lessees) is recognised on a straight line basis over the lease term.