By Alex Tarrant
The government wants to have all negotiations to buy land in central Christchurch done and dusted by the end of the first quarter next year, Prime Minister John Key says.
However, he would not give a timeframe on how long the government would wait before forcing landowners to sell land in 'the frame' around the Christchurch central business district.
The majority of the frame will be to the east of the CBD, and will be turned into green space, Earthquake Recovery Minister Gerry Brownlee announced yesterday. See: Govt unveils Christchurch CBD plan; redevelopment of smaller city centre to be based around stadium, convention centre, justice precincts; Govt eyes land purchases.
That would affect developers with existing redevelopment plans like Richard Peebles, who told The Press he would be "losing" all his sites.
The government wants CBD landowners to sell land located in the frame (see the boundaries here) willingly. Prices would be negotiated with the Canterbury Earthquake Recovery Authority (CERA). The Authority said it would announce by the end of next week which land it had in its sights.
Land owners who do not sell willingly can be forced by the government to sell at current market values under earthquake recovery legislation. Read a Q&A on the plan to purchase land in the frame here.
No costs yet...
Prime Minister John Key would not say how much the government expected to spend buying up land from about 800 central city landowners. The initial up front cost would be met out of the government's NZ$5.5 billion earthquake recovery fund. The government had so far spent about half of what had been set aside in the fund, Key said.
Key said he could not rule out longer-term costs rising above the NZ$5.5 billion mark.
"Some of that will be recouped as we make sales out of the frame," Key told media in Parliament Buildings on Tuesday.
"Without the government taking the leadership role that we are, we wouldn't be able to put together a comprehensive plan for Christchurch. So in the end it becomes a bit of a chicken and the egg situation, there are lots and lots of people with interests, and in the end, the severity of the earthquakes has required the action that we have taken," he said.
Key said it was too early to say how long the government was prepared to wait before moving to forcibly acquire land.
“We not trying to put a gun to their head. We are trying to get a good outcome for Christchurch, and we’ll certainly be working alongside them – hopefully reach a resolution with people," he said.
"But in the fullness of time we’ll act if we have to. But our preference is to do it by negotiation.”
The government wanted to be in a position to have the frame in place by the end of the first quarter in 2013, meaning “it would be good” if the negotiations with the affected landowners could be completed by then.
Buying and selling
Finance Minister Bill English said whatever the upfront costs of land acquisitions were, there were likely to be "considerable recoveries" from on-selling later on.
“That process has worked reasonably well with the redzone purchases, and also the demolitions, where the Crown has met upfront costs so that the process can get going, and then recovered significant amounts of money later on," English told media in Parliament Buildings on Tuesday.
The government had not looked at the issue of compensation for the properties’ original owners if the Crown were to make capital gains from on-selling properties they had bought through force.
“But I think the signal’s pretty clear. The government will do what it can to get the CBD rebuild going, and the aggregation of land parcels is a pretty important thing," English said.
The government would be "fair and even-handed" about the process.
“That’s what you would expect – we respect property rights. But the direction’s pretty clear. We want to get on with the redevelopment of the CBD and land aggregation is an important part of that," English said.