Peter Buchan for CPD 2012 Limited Dated: 6 November 2020

Before a Hearings Commissioner appointed by the Central Otago District Council

Under the Resource Management Act 1991

And

In the Matter of an application under section 88 of the Act by CPD 2012 Limited for the construction and operation of a Countdown supermarket between Centennial Avenue and Ventry Street in Alexandra (RC200029)

Statement of Evidence of Peter Buchan for CPD 2012 Limited Dated: 6 November 2020

Lane Neave Level 1, 2 Memorial Street Queenstown Solicitor Acting: Joshua Leckie/Annabel Hawkins Email: [email protected]/ [email protected] Phone: 03 409 0321/03 377 6783

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INTRODUCTION

1. My name is Peter Buchan. I hold the dual position of Portfolio Manager Countdown (South) and National Manager Property Super Value / Fresh Choice for Woolworths New Zealand Limited (Woolworths).

2. I hold a Bachelor of Science degree in Land Economics from Paisley University, Scotland (1987) and am an Elected Member of the Royal Institute of Chartered Surveyors (1989). I have over 30 years’ experience working in the property industry in the United Kingdom and New Zealand.

3. I have worked for Woolworths for nine years. I am responsible for a property portfolio of approximately 130 Countdown, Fresh Choice and Super Value supermarkets. As part of my remit, I am also responsible for the development of new stores. In particular, I have obtained resource consents and plan changes for several supermarkets on or adjacent to residentially zoned land.

4. Alexandra has been identified as a ‘target town’ by Woolworths for a number of years (which precedes my involvement). Put simply, Woolworths’ desire to invest and establish a supermarket in the town has been frustrated by our inability to secure a suitable consented site opportunity.

5. In terms of my involvement, I have been the Woolworths representative with responsibility for securing a suitable supermarket opportunity in Alexandra for approximately five years.

6. As part of this remit, prior to entering into an agreement with CPD 2012 Limited (the Applicant), I both reviewed previous potential opportunities considered by Woolworths (formerly Progressive Enterprises Limited) in Alexandra and considered whether there were suitable alternatives.

7. The conclusion of my earlier investigations was that there is a lack of suitable commercially zoned opportunities with the town centre of Alexandra and that to achieve a development which can both meet our operational requirements and provide a desirable and competitive commercial offering to customers, an edge of town centre location would be required.

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8. The lack of suitable alternative opportunities was integral to the decision by Woolworths (through its property holding arm) to acquire part of the application site to facilitate advancement of the proposed scheme by the Applicant.

9. I led the negotiations with the Applicant in relation to the Development Agreement entered into for the proposed Countdown development and have subsequently liaised closely with the Applicant in relation to the operational considerations for the proposed scheme, the proposed design for the store / site development, and the consenting process. As part of this, I have inputted into responses to matters raised in the Council’s request for further information and points raised by submitters.

SCOPE OF EVIDENCE

10. In my evidence I will:

(a) Provide an overview of Woolworths’ business;

(b) Outline the background to the proposal;

(d) Explain the proposed management of operational effects.

EXECUTIVE SUMMARY

11. Woolworths regularly receives enquiries asking when we will be opening a store in Alexandra. The town is currently served only by one large format supermarket and three smaller grocery stores and this is an under supply to be addressed.

12. Supermarkets require large sites that are easily accessible and convenient for customers, central to their catchment population and able to be configured in an efficient manner.

13. The subject site sits on the fringe of the Alexandra town centre as zoned, is adjacent to a motel and a number of other existing commercial activities, fronts an arterial route and is central to a large Central Otago catchment population. It meets all of Woolworths’ criteria for successful supermarket development.

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14. Despite wide-ranging investigation, there was a lack of other suitable sites within the town centre that could meet Woolworths’ operational requirements and provide a desirable and competitive commercial offering to customers.

15. The Applicant, together with Woolworths and supported by technical noise, traffic, construction and planning expertise, has developed the design and operational parameters of the proposed Countdown such that it will not cause adverse “edge” effects, or effects on amenity and residential character in this location.

16. In particular, since lodging the resource consent application, significant changes have been made to the design, including signage and the Ventry Street frontage, and proposed operations, including delivery hours. With these measures in place, in my view the proposed Countdown will operate successfully and responsibly within the community it will serve.

17. Woolworths accordingly supports the Applicant’s position that the proposal will bring many benefits to the community and the potential adverse effects will be appropriately managed, such that it would be appropriate to grant consent for the proposal.

WOOLWORTHS OVERVIEW

18. Woolworths is one of New Zealand’s two leading supermarket operators. Woolworths currently operates over 180 Countdown stores nationwide, together with a portfolio of 70 plus franchisee stores operating under the Super Value and Fresh Choice brands.

19. At its Countdown stores alone, Woolworths employs around 20,000 people across New Zealand, making it one of the country’s largest employers.

20. In the Central Otago region, Woolworths operates 6 Countdown stores and employs over 635 people. There are also 5 Super Value and Fresh Choice stores in the region.

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BACKGROUND TO THE PROPOSAL

21. When considering future supermarket development opportunities, Woolworths first identifies the areas and communities that have a need for, and would benefit from, additional supermarket services.

22. The Otago Region, including the Central Otago, Queenstown Lakes, Dunedin and Clutha Districts, has long been assessed by Woolworths as an area under serviced for supermarket customers and in need of additional investment. Notwithstanding recent store developments by the Woolworth brands (Countdown, Fresh Choice and Super Value) in the Region, with the growth in population and tourism, in particular, this situation has become more rather than less pronounced over recent years.

23. In terms of Alexandra specifically, the town has been identified as under serviced from a customer perspective. Woolworths regularly receives specific enquiries asking when we will be opening a store in the town.

24. Alexandra is currently served only by one large format supermarket and three smaller grocery stores (a Four Square, Bin Inn and Night ‘n’ Day). For a town of over 5,000 people in a tourist district of New Zealand, this can only be viewed as an under supply (as more fully discussed by the specialist economics report and evidence by Natalie Hampson from Market Economics).

25. This operationally has been demonstrated by supermarket activities in the town including:

(a) The progressive expansion of the only current large format supermarket to the maximum achievable on their site;

(b) Fresh Choice Cromwell providing an alternative service to the town’s current bricks and mortar supermarket via its online service. This service is trading strongly and growing beyond that which could reasonably have been anticipated; and

(c) Countdown providing an online service via its Queenstown store, although this is currently limited by capacity issues.

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26. In terms of the journey and stages Woolworths gone through in pursuit of our objective of investing in Alexandra this can be summarised as follows:

(a) Pre-2014 – Pursuit of a suitable Countdown site opportunity;

(b) 2014-17 – Strategy and priority review followed by re-assessment of Alexandra from both a planning and alternative site opportunities perspective;

(d) 2018-present – Further strategy review leading to current Resource Consent application for a Countdown Store.

27. Simplistically from an operational perspective therefore Woolworths’ view is that:

(a) Anything less than a full range Countdown will not accommodate our customer requirements; and

(b) With the recent expansion of the other current large format supermarket retailer in the town, a smaller supermarket offer would not be in a position to compete and potentially would fail.

28. It is also worth commenting that our operational experiences with Covid-19 have impacted our thinking to new store development. Of particular relevance to Alexandra is the need to focus on the increased desire from customers to both shop locally and have a choice.

SITE REQUIREMENTS AND PROPOSAL

Site Requirements

29. Once an area of demand is identified, Woolworths then either progress with site selection, design, consenting and development itself, or advances a proposal in conjunction with a landowner / developer.

30. Supermarkets require large sites that are easily accessible and convenient for customers, central to their catchment population and able to be configured in an efficient manner.

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31. Successful supermarkets rely on all of the above and also being considered by their customers as providing a good product offer which competes with other alternative supermarket offerings. In summary, we principally provide a convenience rather than a destination food shop.

32. As a convenience retailer, failure to achieve the outlined cornerstone principles in the context of the community that any new supermarket serves will mean a store is likely to underperform.

33. Typically, selected locations are within or near town centres or within or adjacent to residential areas (on routes that are used by the population to move to and from work).

34. A well-located, full service supermarket will provide both short and long term employment opportunities for an area. In the initial construction phases, the development will provide jobs directly for construction workers, as well as positive flow-on effects for the wider industry. Once a supermarket is developed and operational, it will provide significant full- time and part-time jobs for supermarket staff.

35. A further key consideration for Woolworths in selecting a site is whether the opportunity is capable of being developed in a manner that does not result in adverse effects on the environment that cannot be avoided, remedied or mitigated. The potential for “externalities”, particularly on residential receivers, and how these could potentially be managed is considered thoroughly prior to investment and during the design and consenting phases.

Suitability of the Application Site

36. Prior to committing to the application site, Woolworths considered a number of potential opportunities within Alexandra, including within the town centre. This comprised of three categories: opportunities on the market, confidentially canvassed potential sites, and locations where owners/ their representatives made approaches to us.

37. Of the locations identified / considered as potentially meeting the outlined core supermarket criteria for Woolworths at Alexandra (and that were potentially available) we considered the application site to be the most suitably located opportunity of the required size and configuration for a full

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service supermarket within or on the edge of the town centre which meets customers’ requirements.

38. The site sits on the edge of the defined town centre; is located fronting an arterial route and is central to a large catchment population, including Alexandra and the surrounding Central Otago towns and settlements.

39. The overall site is approximately 0.8ha and is reasonably regularly shaped and flat. It can therefore accommodate a traditional supermarket layout with a building fronting an on-grade car park.

40. The location on Centennial Avenue, a main road, affords the site convenience and profile, which are important factors in successful supermarket development. The location is also adjacent to a motel and a number of other existing commercial activities.

41. The submission from NZTA seeks that the proposed pylon sign on Centennial Avenue be moved 3m into the application site and the Council’s Section 42A Report suggests that the pylon sign should be reduced from 9m to 7.5m. These requests have been accepted and will be reflected in revised plans to be provided at the hearing. The Section 42A Report also raises the pharmacy signage shown on the plans submitted with the consent. I confirm that there is no pharmacy included with the proposal. The pharmacy signage will be removed from the revised plans and is not intended to be replaced.

42. The site’s secondary frontage to Ventry Street enables safe and efficient servicing separate from the main customer entrance / exit. I note that Woolworths requires all loading activities to occur entirely on-site due to relevant obligations under health and safety legislation. The Applicant and its planning and transport consultants have worked hard with Council to try to address concerns initially raised about the servicing arrangements, including through an amended street parking plan to address loss of parking on service delivery route. The revised arrangements are described in detail in the evidence of Mr Georgeson and Mr Curran for the Applicant.

43. The Council’s Section 42A Report raises concerns with the proposed signage along Ventry Street and a desire that further elevation treatment be considered for this store elevation.

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44. We have taken on board both points raised and, as also commented on in Mr Curran’s evidence:

(a) We accept Council’s request that the Countdown signage be removed from this frontage; and

(b) Prior to or at the hearing, a perspective with proposed further elevation treatment mitigation measures will be submitted.

45. Within this section I also wish to comment from a corporate/operational perspective on:

(a) The reason why we are proposing a service yard accessed from Ventry street; and

(b) The objectives we are operationally looking to achieve with the (revised) loading area service times as commented on further by Mr Hay and Mr Curran in their evidence.

46. In terms of the service yard access location:

(a) Our preference wherever possible is to keep customer parking and access separate from the service yard area;

(b) The Ventry Street service area location enables us to keep the overall height of the supermarket down – this would have been difficult to achieve with the service yard as well as the customer access at the Centennial Avenue frontage; and

(c) A smaller footprint supermarket could enable servicing from Centennial Avenue and this was an option considered at an earlier stage. I have however explained at paragraph 26 above the reasons why a supermarket of the 3,000sqm scale is now proposed;

47. As regards the load dock service vehicle times, again we have reflected on the Council’s planning officer’s comment and, as outlined in Mr Curran’s and Mr Hay’s evidence, more restricted timeframes are now proposed.

48. In my view, imposing further constraints from what is now proposed has the potential to be counterproductive to the objectives the Council’s

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planning officer is seeking to address to address. In other words, with deliveries occurring between 7am and 8pm, Woolworths is able to manage and spread the arrival and departure of service vehicles through the day in a manner which will not cause disruption to the surrounding residents. An overly limited timeframe for deliveries would risk running contrary to this objective.

49. In conclusion for this section I would comment that with the benefit of the Council’s planning officer’s report we have been able to and have responded positively to the core concerns outlined. In doing so, whilst this will result in some operational constraints we continue to have confidence that the site offers the opportunity to meet Woolworths’ requirements, and provide the level of service / convenience sought from today’s supermarket customer. In particular, the site is able to be developed in a conventional manner utilising tested and proven techniques to address and mitigate off- site effects, as I explain in more detail below.

Site Ownership Arrangements

50. The site comprises nine individual properties. Six of the properties are owned by the Applicant and three are owned by General Distributors Limited (Woolworths’ property arm). If resource consent is granted, the intention is that the properties owned by General Distributors Limited will be transferred into the Applicant’s ownership. Appendix 2 to the application contains a letter of support of the Proposal from General Distributors Limited / Woolworths in their capacity as property owners.

MANAGEMENT OF EFFECTS

51. As cities and towns evolve and populations grow, locating supermarkets at the edge of residential environments within the customer catchment that the supermarket serves has become increasingly common. This is especially the case where the provision of suitably zoned land that is both available and commercially viable for supermarket development has not kept pace with growth in demand and changing customer requirements, as appears to be the case here.

52. In these locations, unmitigated supermarket development can give rise to concerns relating to effects on amenity and residential character. These

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issues are sometimes referred to as “edge” effects, where a proposal is on the edge of a residential area. They relate to traffic and noise effects associated with car parking, servicing vehicle movements, loading bay activity and the mechanical services plant, and lighting and glare effects from the signage and the building at night. Submitters and the Section 42A Report writer have raised such concerns in relation to this application.

53. These effects have firstly been addressed in the design of the proposal itself through the site layout, setbacks, landscaping and boundary treatment.

54. The ongoing management of these edge effects has also been carefully considered from an operational perspective. This has been a core consideration for Woolworths as the proposals for the site have been developed. We are cognisant that should consent be granted (and in turn a Countdown store developed) there will be operational conditions attached to the consent that will be required to be complied with, and, in turn, should any issues arise Woolworths will be required to address these as part of the operation of the supermarket.

55. The proposed conditions of consent are discussed in detail in Mr Curran’s evidence. In terms of the key operational aspects, the conditions provide for:

(a) Noise limits to be met at the boundary of any property within the Residential Resource Area zone;

(b) Limits on deliveries to the Ventry Street access to between 7am and 8pm;

(c) Limits on night-time (8pm to 7am) deliveries to light delivery vehicles only and to the front (Centennial Avenue) store entrance;

(d) A restriction on tonal reversing alarms for vehicles (such as forklifts) operating permanently at the site;

(e) A requirement for all forklifts to be electric;

(f) A 2m high solid fence to be erected along the south-east boundary of the loading area;

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(g) Closure of the service delivery area gates on Ventry Street while loading and unloading activities are completed;

(h) Allocation of responsibility to the supermarket store manager to act as a community liaison officer for nearby property owners; and

(i) Requirements for post-operational noise and traffic monitoring.

56. Taken together, the above design and operational measures will ensure that any amenity and residential character concerns are appropriately addressed.

57. In this case, the proposal is not unusual in terms of its location or its potential effects on the neighbouring or nearby residential receivers.

58. Comparable examples of projects where I personally have either led the development or have had the responsibility of addressing operational considerations include:

LOCATION CONSIDERATION SOLUTION /POSITION Mt Eden, Store and carparking Consent secured with conditions Auckland expansion on residential around noise, light spill and land in densely populated service deliveries. edge of city centre location. Development completed and supermarket operating in compliance with conditions. Newtown, Post consent monitoring Service/ traffic management plan Wellington condition required review of introduced to accommodate service vehicle deliveries. concerns raised. Prebbleton New store development Store opened and operating opened in July 2020 with successfully; no concerns raised residential on two sides. post opening. Service yard access onto residential street. Stoke Noise issue/impact on Modification of loading area / adjoining residential attenuation measures introduced properties arose due to to address concerns. configuration of loading area. Vogeltown, Store development in Store successfully developed and New residential area; residential operational in compliance with Plymouth on boundaries to resource consent conditions. development.

59. The above examples are all operating successfully within their communities and illustrate the responsible ongoing approach adopted by Woolworths.

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60. On the above basis, Woolworths supports the Applicant’s position that the proposal will bring many benefits to the community and the potential adverse effects will be suitably managed, such that it would be appropriate to grant consent for the proposal.

Peter Buchan 6 November 2020

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