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Background and Conclusions

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Background and Conclusions McDermott Consultants Ltd P.O.Box 183 Matakana Auckland 0948 NEW ZEALAND Telephone +64 9 4227710 14 June 2013 Phil Stickney Associate Director, Planning Boffa Miskell PO Box 91 250 Auckland Dear Phil Ruakura Retail Centres This letter has been written in support of the Tainui Group Holdings Ltd (TGH) and Chedworth Development Ltd application for a Private Plan Change to advance the first stage of the Ruakura Structure Plan included in the Proposed District Plan (Section 3.7, Volume 1) through the release of 389ha of development land within the Structure Plan area. It deals in particular with the scale and scope of the provision made for retailing within the Structure Plan area. The analysis and conclusions below draw on my review of the provisions in the Proposed Hamilton District Plan (PDP) for retail and centres development as described in my report Review of Retail Planning and Development in Hamilton (“the Retail Review”, June 2013). This report compares the operative and proposed district plans; examines the grounds for the PDP objectives, policies and methods; analyses trends, drivers and developments of Hamilton’s retailing between 2000 and 2012; and reviews relevant international literature with respect to reviving town centres and the future of retailing. Background and Conclusions Having completed a preliminary review in February 2013 I agreed to support the TGH request for a zone change for the principal retail centre proposed for the Ruakura Growth Cell (the “Ruakura Centre”) from “neighbourhood” to “suburban” (PDP, Policy 3.7.1.5). I completed the review and then assessed the drivers of development of the Ruakura retail centre and its likely space needs. An assessment of the likely role of a retail centre and projecting potential sales and floorspace demand confirms the need for substantially more retail land in Ruakura than proposed in the PDP. It supports a suburban centre zoning within the Plan Change to reflect its likely function and scale. It is not anticipated that this change in zoning will have a significant detrimental effect on any existing retail centres. The major centres (CBD, Ruakura, and Chartwell) have distinctive functions which they are expected to sustain provided the City continues to grow. There may be some impact on the timing and scope of development or redevelopment of suburban centres in the southeast of the city (including Hillcrest and the planned Peacocke centre). However, these should be accommodated through normal of investment planning. The analyses behind these conclusions reveal some uncertainty around planning for retailing and associated uses. Unforeseeable changes in the drivers of demand and supply may influence how and where retailing develops in Hamilton, including Ruakura, in ways we cannot predict. The resulting uncertainty needs to managed in a manner that: (1) enables diverse uses including business services, recreational amenities, and hospitality as well as retailing to locate in the Ruakura Centre as part of a commitment to business development over the growth cell as a whole; (2) ensures efficient development and use of infrastructure in an integrated manner; and (3) avoids imposing undue hurdles to accommodating activities that are not currently anticipated. 1 Summary of the Retail Review In the following paragraphs I summarise some of the major findings from the Retail Review that underlie my analysis of the Ruakura Centre. PDP Policy Documentation There is no evidence in the technical and planning documents preceding the PDP of a causal link that might justify policies to constrain investment in subregional and suburban centres as a means of protecting or promoting “the vitality and vibrancy” of the city centre. Such policies risk unduly constraining city-wide investment. This would reduce the income of Hamilton as a whole, which, perversely, would be detrimental to the CBD that they are intended to promote. Demand for and Supply of Additional Floorspace Capacity in current centres and planned new suburban centres is sufficient to meet foreseeable demand for additional retail floorspace at the city-wide level. Projections of possible demand and retail structure provide no grounds for promoting undue expansion of commercial land beyond that. Equally, they offer no grounds to support micro-managing development by enabling the council to influence directly what retailing might take place where, when, and at what scale (except to ensure that resource management standards are met). Slowdown in the CBD The decline in CBD employment since 2006 has been most pronounced in business administration. Consequently, retailing’s diminishing role is as much a consequence as cause of restructuring in the CBD as a cause. A decline in retailing is simply the local expression of central city restructuring being experienced in New Zealand and internationally. This may have been accelerated by the global Financial Crisis. However, a falling share of retailing in the centre is also consistent with what appears to happen as cities grow. It is significant that the rapid retail growth experienced outside Hamilton’s city centre in the latter part of the decade (after 2005) followed the reversal of CBD retail employment trends (in 2004). This undermines the suggestion that growth in the suburbs precipitated the decline of central city retailing, which is the basis for PDP policies intended to constrain retail growth in centres elsewhere. Rather, the expansion of retailing in suburban and city edge centres is a consequence of city growth generally, the associated decentralisation of population and employment, and changes in both retailing and consumer behaviour, rather than the result of the relocation of CBD retail capacity. CBD Dominance and Revival The CBD still remains the dominant retail centre in Hamilton. This is consistent with it being the most accessible location (alongside Five Crossroads). Moreover, there are signs of a significant revival with a pick-up in investment in new CBD retail floorspace and redevelopment since 2010. For example, Kiwi Income Property Trust is investing a reported $40m in upgrading the Centre Place shopping precinct in the heart of the CBD. A second stage comprising the redevelopment of nearby Downtown Plaza and incorporating a cinema upgrade is currently underway. The nearby McConnell Properties Citygate/PWC Building is due to open in the middle of 2013 and is already fully leased. This includes 613sqm of ground floor retailing and café space. A new Countdown supermarket has recently been completed on Bridge Street at the southern end of the central city, and the nearby Pak’nSave on Tristram Street has been extended. This uplift in retail investment in the CBD is appears to be a positive response to competition elsewhere. It is also be part of a revival marked by the construction of some 9,000sqm of new 2 quality office space (the PWC Centre and Project Grantham) in a CBD where A grade space has been lacking. Either way, the current round of central city investment confirms that declining retail performance in the CBD in the latter part of the past decade cannot simply be attributed to improving performance outside it. Retail Review Conclusions The Retail Review advanced five general conclusions relevant to the PDP which are repeated here. (1) Is promoting and preserving a hierarchy a useful retail planning method? Constructing and enforcing a hierarchy for retail planning in Hamilton is not justified by the evidence and seems unnecessarily limiting. Zoning new capacity in planned growth cells and retaining the capacity of existing centres appears an appropriate response to retail growth prospects. Concerns over the detail of what might occupy that capacity and where stores should go can be managed simply by applying structure planning and (if necessary) plan change processes that respond to changes in the role or circumstances of individual centres within a flexible zoning regime rather than implementing policies aimed at retaining a particular (and arbitrary) hierarchy over the long term. The (2) Does the growth of retailing in other centres harm the CBD? The relatively poor performance of the CBD may be self-correcting as indicate by a lift in investment since 2010. If it is having an effect, then, competition from other centres is promoting CBD recovery, or at least advancing the process of retail renewal. Experience elsewhere suggests that such renewal will lift the role of relatively small scale, high value, boutique, and specialty stores in the CBD. (3) What effect might we expect from policies to limit retailing outside the CBD? The overall outcome of selectively restrictive policies could well be less economic activity in the city, less efficient retailing, and higher costs to consumers. The negative impact on employment and incomes resulting from policies limiting the scale and form of retailing outside the CBD can undermine its commercial and social functions if stymying growth elsewhere reduces investment, income, and jobs city-wide. This in turn will reduce demand for the goods, services, and amenities in the CBD. At best such policies will be ineffective, but they could also prove counterproductive. (4) What planning is needed to promote the CBD? Non-regulatory initiatives might better promote the vitality and vibrancy of the CBD. Hamilton already has a self-funding Business Improvement District covering the CBD which is operated by the Hamilton Business Association in association with the Council. A correction to yields and the redevelopment of Centre Place (among others) should also promote further private investment to parallel civic investment in the public domain and amenities in the central city. Effective transport planning, traffic management, and public transport to enhance accessibility and movement around the centre will help. Planning might best contribute by providing for flexibility of use, promoting high standards for the built environment, and recognising the benefits of a compact CBD for such desired outcomes as walkability and attractive inner city living. Among other things, this may mean limiting rather than extending the area of central city commerce.
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