051-054 hrg - key retailers group - legal submissions

8/20/2019 051-054 Hrg - Key Retailers Group - Legal Submissions

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Key Retailers Group Topic 051 - 054 - Business zonesSubmission numbers 2632, 2748, 2968, 5253, 5723, 6096 Joint Legal submissions

IN THE MATTER of the Resource Management Act 1991

AND

IN THE MATTER of the Proposed Auckland Unitary Plan

LEGAL SUBMISSIONS FOR KEY RETAILERS GROUP

TOPIC 051-054 CENTRE ZONES, BUSINESS PARK AND INDUSTRIES

ZONES, BUSINESS ACTIVITIES AND BUSINESS CONTROLS8 SEPTEMBER 2015


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1Key Retailers Group Topic 051 - 054 - Business zonesSubmission numbers 2632, 2748, 2968, 5253, 5723, 6096 Joint Legal submissions

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1. INTRODUCTION

1.1 These legal submissions are given on behalf of:

(a) Bunnings Limited;

(b) Kiwi Property Group Limited and Kiwi Property Holdings

Limited;

(c) Progressive Enterprises Limited;

(d) Scentre (New Zealand) Limited;

(e) The National Trading Company of New Zealand Limited; and

(f) The Warehouse Limited.

1.2 These submissions relate to Topics 051 - 054 - Centre zones,

Business and Industrial zones, Business activities and Business

controls ("Business zone provisions").

Key Retailers Group

1.3 The parties listed in paragraph 1.1 have formed the Key Retailers

Group ("KRG").

1.4 The KRG represents the major retail operators in Auckland, including

supermarkets, large format retail ("LFR"), trade suppliers, office

buildings and shopping centres. The extensive combined experience

of the KRG in relation to planning for retail activities in Auckland givesthe KRG a unique and detailed understanding of what is required to

provide for effective and workable provisions in the Unitary Plan.

1.5 The KRG has filed the following evidence:

(a) a Joint Planning Statement ("JPS") from five independent

planners;

(b) urban design evidence from Clinton Bird; and


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(c) individual corporate, economic, and planning evidence on

behalf of members of the KRG, which details the member-

specific issues regarding the Business zone provisions.

Relief sought by KRG

1.6 The members of the KRG have spent over two years working as a

group to agree collective relief. They have engaged extensively both

informally, through direct discussions, and formally through mediation

with Auckland Council ("Council") to reduce outstanding issues, and

to present largely agreed provisions to this hearing. The result of that

lengthy engagement is the relief attached to the JPS ("the KRG

Version"), which identifies, in annotated form, very limited points of

difference with the Council.1

1.7 Considerable resource has been invested in achieving this outcome,

which reflects the clear direction of both the proposed RPS and the

compact growth strategy introduced in the legacy plan framework.

1.8 In addition to identifying the outstanding matters with the Council, the

KRG Version identifies, in green highlighting, a small number ofmatters that remain outstanding between KRG members, particularly

in relation to objectives, policies and rules in the Mixed Use zone

regarding the agglomeration of retail activities. Those outstanding

matters are addressed in statements of evidence filed by individual

KRG members and will be discussed when those KRG members

make their individual presentations. Those matters will not otherwise

be addressed during the collective presentation.

1.9 It is important to emphasise at this point how far the KRG has come in

respect of these provisions, given the concerns originally held with the

content of the draft Unitary Plan and then the notified Plan. The

members of the KRG have invested many hours collectively in refining

the provisions, considering their implications, and proposing wording

1 Following Council rebuttal evidence, we note that the Council has made some

further changes to its tracked-change provisions to reflect those changes proposed inthe KRG Version in relation to 8.1 Assessment Criteria - Building design and external

appearance.


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that does not result in unintended consequences or unworkable /

unwieldy controls.

1.10 While the KRG was formed specifically to engage with the Council on

the Unitary Plan, members of the KRG have engaged with the Council

and with one another in respect of Auckland's plan provisions

governing commercial growth since the notification of Change 6 to the

Operative Auckland Regional Policy Statement in March 2005.

Through that process, changes were made to the RPS to:

(a) promote quality compact urban environments (intensification);

(b) contain the majority of growth within the Metropolitan Urban

Limits; and

(c) primarily focus growth around high density centres and

corridors.

1.11 The KRG Version represents a collective position that the members of

the KRG consider forms an appropriate package of provisions in the

context of:

(a) the Council's intensification strategy for addressing growth in

Auckland;

(b) the framework of zones that the Council incorporated into the

Unitary Plan as notified;

(c) the case law regarding the relevance under the Resource

Management Act 1991 ("RMA") of distributional or

consequential effects that arise as a consequence of trade

competition but go beyond the effects of trade competition (a

matter addressed below); and

(d) the inability to model over the life of the Unitary Plan adverse

effects on centres of retail and other development, and the

consequential desirability of enabling land owners to seek

consents in circumstances where the potential effects can be


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assessed through a restricted discretionary activity status or

similar.

Outstanding issues on Topics 051-054

1.12 The KRG is grateful for the time invested by Council in direct

engagement with the Group on the Business zone provisions. As a

result of these direct discussions, most issues have now been agreed

with the Council. The primary outstanding issues are:

(a) The need to give better effect to the centres hierarchy

outlined in the RPS (and originating from Change 6). In that

regard:

(i) Changes are sought to the objectives of the

Metropolitan and Town Centre zones to encourage

the development of integrated retail developments.

(ii) The KRG seeks provision for small and medium-

sized supermarkets as restricted discretionary or

discretionary activities within the Neighbourhood

Centre zone.

(b) The need to ensure some flexibility for retailers to develop in

response to the increased demand that will be generated by

intensification. To that end:

(i) The KRG seeks the inclusion of six additional

Identified Growth Corridors ("IGC").

(ii) The KRG seeks provision for supermarkets as

discretionary activities within the Light Industry zone.

(c) The need to make a number of minor changes to policy

provisions and assessment criteria to better provide for the

functional requirements of major retail developments.


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2. PRELIMINARY LEGAL ISSUE – LEGAL PRINCIPLES APPLYING

TO DISTRIBUTIONAL OR CONSEQUENTIAL EFFECTS

2.1 In its interim guidance on Topic 013 – B3.1 Commercial and Industrial

growth, the Panel stated:

14. The Panel supports commercial growth on transportcorridors as well as in centres.

15. Resource management policies should not be concernedwith the viability of activities, including centres ofactivities. The proposed policies to protect centres fromadverse effects "beyond those effects ordinarilyassociated with trade effects or trade competition" appearto be seeking to protect the viability of those centres andthus are contrary to s61(3) RMA.

2.2 The KRG acknowledges the comment at paragraph 14 and assumes

that it implies support for the IGC mechanism.

2.3 The KRG considers it important to address the analysis embodied at

paragraph 15 in light of extensive relevant case law, including

Supreme Court authority, that has been developed over many years.

The KRG appreciates the advisory nature of the Panel's interim

guidance and that submitters should be cautious about reading too

much into the brief passages quoted above. Sections 61(3) and 74(3)

of the RMA have significant implications for the business provisions,

however, and there is no further opportunity to clarify the legal position

before the Panel issues its recommendations. Thus the KRG

collectively has an interest in the Panel's analysis being consistent

with the legal authorities, and in avoiding any ongoing disputes as to

the legal basis for the Unitary Plan provisions.

Prohibition in sections 61(3) and 74(3) of the RMA

2.4 By virtue of sections 61(3) and 74(3) of the RMA, regard cannot be

had to "trade competition or the effects of trade competition" when

developing RPS or district plan provisions.

2.5 Prior to 1 October 2009, those sections simply precluded

consideration of "trade competition", with the words, "or the effects of

trade competition" being added by section 58 of the Resource


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Management (Simplifying and Streamlining) Amendment Act 2009

(2009 No 31). A similar change was made to section 104(3), which is

the corresponding provision with respect to resource consent

applications. For reasons discussed below, it is submitted that the

addition of those words made no substantive difference to the

interpretation and application of the section. Put simply, the sections

were applied prior to the 2009 amendment as if they included

reference to effects of trade competition, so the amendment

essentially reflected existing interpretation.

2.6 The case law, both before and after the 2009 amendment, is clear that

regard can be had to effects on the amenity of the public caused byany significant reductions in the viability and vitality of commercial

centres that arise as a consequence of such trade competition – what

can be termed "distributional " or "consequential " effects.

2.7 The point at which such effects become relevant and worthy of

consideration has been the subject of discussion in a large number of

cases. It is not proposed to review that material in detail, but instead

to focus on the chain of High Court, Court of Appeal and Supreme

Court decisions on judicial review by Northcote Mainstreet

Incorporated and Westfield (NZ) Limited of North Shore City Council's

decision to deal on a non-notified basis with an application for

resource consent by Discount Brands Limited with respect to the Fox

Outlet Centre in Northcote. Those decisions concern the

corresponding provision of the RMA regarding resource consent

applications (section 104(3)).

Discount Brands High Court Decision

2.8 In Northcote Mainstreet Incorporated v Discount Brands Limited ,2 the

Court traversed the principles as they relate to the consideration of

trade and consequential effects under the RMA. The test, as

described by the High Court on that occasion was as follows:

2 Northcote Mainstreet Incorporated v Discount Brands Limited (2004) 10 ELRNZ 146

at paragraphs 57 to 63.


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The RMA's concern with the broader effects of proposals onthe community is consistent with the widely stated purpose ofthe RMA in s5 with its reference to enabling "…people andcommunities to provide for their social, economic, and culturalwellbeing…". But, the Environment Court has made it clearthat adverse social or economic effects must be significantbefore they could properly be regarded as going beyond theeffects ordinarily associated with trade competition on tradecompetitors: see the discussion in Imrie Family Trust vWhangarei District Council (1994) NZRMA 453 at 462-463...

The key point of distinction between the adverse effects oftrade competition on trade competitors and adverse effectswhich may properly be considered under the RMA, is thattrade competition effects focus specifically on the impacts onindividual trade competitors. In contrast, where a proposal islikely to have more general effects on the wider community,then the RMA permits consideration of those effects...

In regard to shopping centres, I would not, with respect,subscribe to the view that the adverse effects of some othercompeting retail development must be such as to be ruinousbefore they could be considered. But they must, at the least,seriously threaten the viability of the centre as a whole with on-going consequential effects for the community served by thatcentre...

A community frequently invests substantial sums directly orindirectly in relation to shopping centres. For example, in thepresent case, the evidence shows that the Council itself ownsmuch of the land associated with the Northcote shoppingcentre and a range of community facilities (in addition to retailshopping) has been established there. Indirectly, substantialsums may be spent on roading and other infrastructure to

support existing centres. It follows that it is entirely permissiblefor a consent authority to take into account significant adversesocial and economic effects on such facilities which could flowfrom the grant of consent to an application to establish a newretailing centre.

(emphasis added)

2.9 Randerson J then noted with respect to the District Plan that the

distinction between the effect on individual trade competitors and the

wider effects had been recognised and specifically identified in the

relevant section 15.7.3.5 (which contained criteria for the assessmentof applications for discretionary activity consent). In respect of those

provisions he noted:3

It is noteworthy that this provision refers to the effects on thecommercial and community services and facilities of anyexisting centre as a whole and refers to the overall availabilityand accessibility of such services and facilities. It also speaksin terms of significant adverse effects of that character.

(emphasis added)

3 ibid, at paragraph 65.


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Discount Brands Court of Appeal Decision

2.10 Randerson J's decision overturning the North Shore City Council

process in that case was then appealed to the Court of Appeal who

described the test as follows:4

As a general proposition, the adverse trade effects of aproposed retail development must be such as to seriouslythreaten the viability of existing retail centres, with ongoingconsequential effects for the community served by thosecentres, before they can properly ground an objection to thegrant of a resource consent. The consequential effects mighttake the form of an effect on public amenities or roading.Those might, for instance, be rendered redundant, ordiminished in their community benefit, because the viability ofan existing retail centre might be undermined.

2.11 Applying this test to the particular facts in question, the Court of

Appeal held:5

It must be borne in mind that there would only be a relevantenvironmental impact which was more than minor if there wasa major commercial and economic impact on existing centres.The Commissioners took the view that any consequentialpublic and community effects would be no more than minor.

In the absence of directly affected parties, the Commissioners'decision that the effects were not more than minor involved afinding that the impact on other shopping centres in the area

would not be ruinous and that no other significant adverseeffect (e.g. on urban form objectives or transport strategies)would result. In our view a reasonable consent authority couldhave reached that conclusion on the basis of the informationbefore the Commissioners, particularly having regard to theirknowledge of the local environment. It is perhaps relevant inthis regard to note, as Randerson J did, that none of theexperts produced by the respondents in the High Courtexpressed a view on the substantive merits which wasinconsistent with the conclusion of the Commissioners.

(emphasis added)

Discount Brands Supreme Court Decision

2.12 The Court of Appeal's decision as it related to the adequacy of

information provided with the application was then overturned by the

Supreme Court in Westfield (New Zealand) Limited v North Shore City

4 Discount Brands Limited v Northcote Mainstreet Incorporated [2005] NZRMA 57 at

paragraph 10.5 ibid, at paragraph 66 and 67.


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Council .6 In relation to the appropriate test to be adopted with regard

to the potential adverse effects of the proposal, Blanchard J stated:7

An important matter which the Council's Regulatory and

Hearings Committee needed to inform itself upon was theeffect which the activity proposed by Discount Brands mighthave on the amenity values of the existing centres – on thenatural or physical qualities and characteristics of those areasthat contributed to people's appreciation of their pleasantness,aesthetic coherence, and cultural and recreational attributes.The committee was required to disregard the effects of tradecompetition from the Discount Brands centre, sincecompetition effects would have to be disregarded upon thesubstantive hearing of the resource consent application. But,as Randerson J said, significant economic and social effectsdid have to be taken into account. Such effects on amenityvalues would be those which had a greater impact on peopleand their communities than would be caused simply by trade

competition. To take a hypothetical example, suppose as aresult of trade competition some retailers in an existing centreclosed their shops and those premises were then devoted toretailing of a different character. That might lead to a differentmix of customers coming to the centre. Those who had beenattracted by the shops which closed might choose not tocontinue to go to the centre. Patronage of the centre mightdrop, including patronage of facilities such as a library, whichin turn might close. People who used to shop locally and usethose facilities might find it necessary to travel to other centres,thereby increasing the pressure on the roading system. Thecharacter of the centre overall might change for the worse. Atan extreme, if the centre became unattractive it might in wholeor part cease to be viable.

The Court of Appeal considered that only 'major' effectsneeded to be considered, since only then would the effect onthe environment be more than minor, in terms of s94(2)(a).But in equating major effects with those which were 'ruinous'the Court went too far. A better balance would seem to beachieved in the statement of the Environment Court, whichRanderson J adopted, that social or economic effects must be'significant' before they can properly be regarded as beyondthe effects ordinarily associated with trade competition ontrade competitors. It is of course necessary for a consentauthority first to consider how trading patterns may be affectedby a proposed activity in order that it can make an informedprediction about whether amenity values may consequentiallybe affected.

(emphasis added)

Subsequent case law

2.13 Those decisions have been followed since, notably in the High Court

and Court of Appeal decisions in General Distributors Ltd v Waipa

6 Westfield (New Zealand) Limited v North Shore City Council [2005] NZRMA 337.

7 ibid, at paragraph 119 and 120.


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District Council .8 In addition, the Environment Court has on a number of

occasions approved district plan provisions that address such

distributional or consequential effects (see, for example, Advance

Properties Limited and others v Taupo District Council [2014] NZEnvC126).

2.14 The matter has not been addressed further by the Supreme Court and

none of the subsequent cases appear to have questioned the

continued relevance of that case law.

Relevance and Implications of Case Law

2.15 It is submitted that the Discount Brands line of cases is relevant to the

Unitary Plan:

(a) The wording of section 104(3), which was relevant to the

Discount Brands cases, has at all stages been consistent

with the wording in sections 61(3) and 74(3), which apply to

the Unitary Plan, and the issue of relevance is common.

(b) The Discount Brands decisions explicitly and exclusively

address the effects of trade competition rather than trade

competition itself, despite the fact that the relevant section

104(3) referred only to trade completion at that time. That is,

they address the very point that is raised by the current

wording of sections 61(3), 74(3) and 104(3), being, as

Randerson J put it, the " point of distinction between the

adverse effects of trade competition on trade competitors and

adverse effects which may properly be considered under the

RMA".

2.16 The Discount Brands decisions:

(a) Draw a clear distinction between the effects of trade

competition on competitors and the wider social and

economic effects on the viability of and amenity provided by

8 High Court CIV 2008-404-004857 and Court of Appeal CA160/2009 [2009] NZCA

213.


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centres that may be generated (at least in part) as a

consequence of such trade competition.

(b) Indicate that, in circumstances where trade competition

produces social and economic effects that are not significant

and are not beyond the effects ordinarily associated with

trade competition, those effects should be disregarded.

(c) Reinforce a common element in Environment Court decisions

whereby it is only after an assessment of the trade

competition effects has been undertaken that an assessment

can be made of the consequential social and economic

effects.

(d) Imply that where a proposal will generate competition and will

redistribute trade but will not threaten the viability of a centre,

will not affect the range of services provided at that centre

and will not alter the character of a centre, then there are no

social and economic effects that warrant consideration under

the RMA.

2.17 With respect, in that context the Panel's interim conclusion that,

" policies to protect centres from adverse effects 'beyond those effects

ordinarily associated with trade effects or trade competition' appear to

be seeking to protect the viability of those centres and thus are

contrary to s61(3) RMA" appears to equate:

(a) effects on the viability of trade competitors, which are

rendered irrelevant by sections 61(3), 74(3) and 104(3) of the

RMA; with

(b) the relevant and wider effects on centre viability that may be

generated as a consequence of the redistribution of

expenditure and custom that flows in part from such trade

competition.


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The KRG considers that those consequential effects are matters that

the Unitary Plan is able to address and that the KRG Version

represents an appropriate balance in that regard.

2.18 The KRG has agreed with the Council that the appropriate form of

words to adopt when identifying the point at which consequential

effects become relevant is, "beyond those effects ordinarily associated

with trade effects on trade competitors":

(a) That wording is taken from the description of the test in the

Supreme Court decision, which reads, "social or economic

effects must be 'significant' before they can properly be

regarded as beyond the effects ordinarily associated with

trade competition on trade competitors".

(b) That wording is also similar, albeit not identical, to the

requirement in sections 61(3), 74(3) and 104(3) of the RMA

that regard must not be had to "trade competition or the

effects of trade competition". It is therefore related to the

statutory enquiry required for determining relevance.

2.19 Consideration was given to using the phrase "significant effects" on

the basis that it reflects the currently accepted analysis of where

effects become relevant under the RMA. The phraseology preferred

in case law for defining that point of difference may change with time,

however, even if the statutory test itself does not. Thus, the use of

wording that is more closely tied to the legislation is considered a

more robust approach.

Use of “Function, role and amenity”

2.20 In its questioning of the Council witnesses, the Panel raised an issue

regarding the use of the phrase “function, role and amenity ” of

centres.

2.21 The KRG considers that there are a range of phrases that might be

used to summarise the relevant RMA issues concerning distributional

effects. District plans around the country variously refer to effects on


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the function, viability, role, amenity and vitality of centres. The KRG

considers that the wording chosen in this case is appropriate:

(a) Reference to the “function” of centres invites consideration of

whether the new activity will compromise the range of services

provided by a centre.

(b) Reference to the “role” of centres invites consideration of how

the centre sits within the hierarchy of centres.

(c) Reference to “amenity” refers to the physical quality of the

centre and the vitality that is generated by visitors attracted by

services.

2.22 Collectively those terms address interrelated aspects of social and

economic wellbeing. In each case, the presence of such an effect will not

necessarily lead to resource consent being declined to a new proposal,

but is a factor that should at least be taken into consideration when

making that substantive decision. It is possible that the decision maker

will conclude that any adverse effects on the centre are outweighed by

positive social and economic effects generated by the new activity.

3. RELIEF SOUGHT

3.1 The KRG is supportive of the comprehensive and graduated approach

reflected in the version of Part B.3.1 of the Unitary Plan that was

agreed between the Council and the KRG.

3.2 Broadly those provisions:

(a) Encourage commercial intensification and commercial

activities to locate in the city centre, metropolitan and town

centres, and encourage the growth of those activities. (B.3.1

Policy 2, 3 and 4).

(b) Enable appropriate commercial activities on identified growth

corridors (B.3.1 Policy 7).


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(c) Where appropriate, having regard to the hierarchy of centres

and corridors, enable commercial activities in locations other

than the city centre, metropolitan and town centres and

identified growth corridors (B.3.1 Policy 8).

3.3 The KRG considers that the following key amendments are required in

the Business zone provisions, to better reflect those provisions of

B.3.1:

(a) Commercial activities within centres:

(i) Encourage the development of integrated retail

developments in Metropolitan and Town Centres

through inclusion of appropriate wording in 3.3 -

Policy 9 and 3.4 Policy 6.

(ii) Provide for small and medium-sized supermarkets

as restricted discretionary or discretionary activities

within the Neighbourhood Centre zone.

(b) Enable commercial activities on growth corridors:

(i) Include the following additional growth corridors on

the planning maps:

(aa) Constellation Drive, Albany.

(bb) Great North Road, Arch Hill.

(cc) Lunn Avenue, Mt Wellington.

(dd) Ellerslie-Panmure Highway.

(ee) Great South Road, Takanini (west of

Walters Road).

(ff) Great South Road, Takanini (east of

Walters Road).


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(c) Where appropriate, enable commercial activities outside of

centres and corridors:

(i) Provide for supermarkets as discretionary activities

within the Light Industry zone.

3.4 These are addressed below.

Commercial Activities within Centres

Encourage integrated retail developments in Metropolitan and TownCentres

3.5 The KRG seeks that integrated retail developments ("IRDs") be

encouraged in the Metropolitan Centre zone and the Town Centre

zone.

3.6 IRDs form a key aspect of Auckland's main centres, providing

vibrancy and vitality to the area and ensuring the economic and social

well-being of the community in which such developments sit. The

Unitary Plan disregards the existence and critical role of those

developments, however. The KRG considers that ignoring such an

important form of development risks overlooking the contribution that

they make and results in the Unitary Plan failing to identify and

address the issues that they raise which should be planned for.

3.7 The merits of IRDs have been acknowledged in the rebuttal evidence

of Mr Munro on behalf of the Council.9

Integrated retail developments can bring many benefits (seealso the evidence of Mr Clinton Bird

32, with which I

substantially agree). While the Plan does not currently discuss

the desirability of integrated retail developments within centres,neither does it talk specifically about the desirability of retail"main streets" or many other elements that are commonlyassociated with centres and which are important. This doesnot mean that the many other outcomes desirable in centreswhich have not been so specifically targeted lack significanceor have been left behind.

3.8 However in legal submissions,10 counsel for the Council have said that

IRDs "should not necessarily be encouraged in preference to

alternative configurations such as a main street".

9 Evidence of Ian Munro, on behalf of Auckland Council, at paragraph 12.4.


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3.9 That approach ignores the social and economic benefits associated

with these activities, and the positive benefits that they bring to

Auckland's successful centres. As discussed in detail in the evidence

of Mr Drew11

and Mr Bird,12

IRDs are no longer just large collections of

retail shops, they are hubs of entertainment, medical services,

community facilities, local services, and food and beverage activities.

The benefits of those activities co-locating within an integrated

development include efficiencies associated with transport and

infrastructure, and the ability to develop integrated design solutions.

3.10 The KRG considers that Metropolitan and Town Centre zones are the

most appropriate locations for integrated retail developments in orderto most efficiently accommodate the growth and intensification that will

occur in Auckland over the next decade. That ought to be recognised

within a Business zones policy framework that reflects the provisions

of B.3.1, which seek to:

(a) Provide employment and business opportunities to meet the

current and future needs of Aucklanders.

(b) Provide centres that function as commercial, social and

community focal points.

(c) Encourage appropriate commercial activities to locate within

centres.

3.11 In our submission, IRDs achieve those outcomes. To emphasise the

benefits of integrated retail developments, the KRG seeks additions to

Policy 9 of the Metropolitan Centre and Policy 6 of the Town Centre

zone as follows:

Encourage the development location of supermarkets,integrated retail developments, and department stores withintown centres by recognising:

a. recognising the positive contribution these activities maketo centre viability and function, and

10 Auckland Council legal submissions, 7 September 2015, at paragraph 6.18.

11 Corporate evidence of David Drew, on behalf of Scentre (New Zealand) Ltd at

paragraph 3.5.12 Evidence of Clinton Bird, for multiple parties, at paragraph 3.5.


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b. balancing the functional and operational requirements ofthese activities with the need to achieve a quality builtenvironment.

c. where preferred built form outcomes are not achieved, the

development needs to achieve a quality built environment bypositively contributing to public open space, including theactivation of streets

3.12 This topic will be addressed in more detail when Kiwi and Scentre

make their presentation later in the week.

Supermarkets in the Neighbourhood Centre zone

3.13 In summary, the KRG considers that:

(a) Supermarkets provide a convenient service for their

immediate catchment, which in many parts of the city is

residential in nature. Significant numbers of additional

supermarkets of various sizes will be needed within the

existing urban areas to serve the increased demand that will

flow from residential intensification.

(b) Neighbourhood Centres are intended to provide a convenient

node for commercial and social activities and facilities. They

are appropriate locations for supermarkets provided effects,

including interface effects with any surrounding activities, are

addressed appropriately.

(c) The Council has proposed that all supermarkets larger than

450m2 GFA be non-complying activities in the Neighbourhood

Centre zone. The KRG considers that such an approach will

push supermarkets into out of centre locations when theycould contribute to the functionality and amenity provided by

Neighbourhood Centres.

3.14 The KRG seeks that supermarkets from 450m2 to 2,000m2 GFA be

given Restricted Discretionary Activity status, and supermarkets from

2,000m2 to 4,000m2 GFA be given Discretionary Activity status in the

Neighbourhood Centre zone. This topic will be addressed in more


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detail when the supermarket operators make their presentation later in

the week.

Identified growth corridors and Supermarkets in the Light

Industry Zone

3.15 The relief sought by the KRG with regard to additional IGCs and

discretionary activity status for supermarkets in the Light Industry zone

has a common rationale.

3.16 The KRG considers that the Unitary Plan needs to make increased

provision for additional retail activities outside the centres hierarchy.

In that regard, the KRG's position is as follows;

(a) By way of background:

(i) The provisions in Part B3.1 and those in the KRG

Version acknowledge and reinforce a hierarchy of

centres in Auckland. Those centres are a key

element of the intensification policy and compact

urban form proposed by the Council and should

become increasingly important nodes for the public

transport system.

(ii) The intensification that is an inherent part of the

Council's policy for addressing growth will result not

only in greater population densities but also

increased demand for facilities that serve and cater

for that population. That will include retail,

education, entertainment, employment and

recreational facilities.

(iii) Land for additional facilities is already scarce within

the built up parts of the region. The intensification


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that is proposed will exacerbate that scarcity whilst

simultaneously increasing demand.

(iv) Not all facilities required to serve the increasing

population of Auckland will be able to be located

within centres and, in some cases, the convenience

of the public will be increased if additional services

can be located between centres, close to residential

areas.

(v) There is already in some areas insufficient land to

meet demand. Any sites that are available may not

be appropriately located in terms of a given retailer's

network of stores. That problem will become worse

with time.

(b) The General Business zone makes provision for LFR. The

zone is limited in physical extent, however, and has largely

been applied to areas that are already occupied by extensive

LFR. Thus it offers limited opportunities for additional retail

activities.

(c) There is some provision for retail in the Mixed Use zones but

those areas provide for residential activities with limited retail.

The KRG has accepted the Council's suggestion that only

smaller shops be encouraged in this zone. It accepts that

larger retail outlets will require consideration of their interface

with surrounding residential activities.

(d) The IGC mechanism will act as a safety valve by enabling

applications to be lodged for a limited range of activities along

identified parts of the arterial road network. Retail is only one

of the uses to which such land may be able to be put,

however, so there is no certainty that land subject to an IGC

will be used for retail. The IGC has been applied to only one

location in the notified Unitary Plan and the Council planners


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are now recommending a total of five corridors around the

region. The KRG considers that to be inadequate.

(e) LFR is not provided for in the Light Industry Zone apart from

Trade Suppliers, which are now proposed to have Permitted

Activity status (which the KRG supports on the basis that

such activities have an industrial character and because it

may help to free up space in other zones for other forms of

LFR).

3.17 As a result, the KRG's position is that:

(a) The Unitary Plan still makes insufficient provision for retail to

develop in response to the planned population growth, even if

the changes now suggested by the Council are adopted.

(b) It is appropriate to identify additional IGCs if that mechanism

is to function effectively. Proposed additional locations are

identified in the JPS.

(c) Supermarkets should have discretionary activity status in the

Light Industry zone.13

(d) Without these additional provisions, the Unitary Plan will fail

to provide sufficient opportunities at a local level for retailers

and in doing so will compromise the amenity and

convenience of residents.

(e) It is not feasible for the Council to identify and zone specific

sites exclusively for retail as doing so:

(i) will prevent that land being used for other activities

which also require space; and

(ii) may not resolve the particular commercial and

network planning requirements of retailers.

13 This issue will be addressed in detail when the supermarket operators present their

case.


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4. ASSESSMENT CRITERIA

4.1 The KRG has generally reached agreement with the Council regarding

the approach to the proposed assessment criteria. The KRG is

supportive of the significantly amended assessment criteria proposed

in the Council's primary evidence and consider it is a significant

improvement on the notified provisions, which did not accurately

provide for the reality of LFR developments.

4.2 The KRG continues to seek minor amendments relating to parking,

new buildings, frontages and the benefits of integrated retail

development, supermarkets and department stores. The reasons for

these further changes will be discussed by the planners for the KRG.

5. FUNCTIONAL VS OPERATIONAL

5.1 With regard to the question of whether there is a difference between

"functional" and "operational" requirements, counsel for the Council

has stated:14

This question is addressed in the rebuttal evidence ofMr Wyatt on behalf of the Council. Mr Wyatt notes thatthis issue has been discussed in other Topics and theCouncil has consistently taken the position that"functional" includes "operational". Mr Wyatt supportsthis view. In doing so he notes that the Oxford EnglishDictionary uses the two terms as synonyms and heconsiders that there is no meaningful distinctionbetween the two. For these reasons the Council'sposition is that "functional" is sufficient and appropriatewithout the word "operational". This approach will alsomaintain consistency with other parts of the plan.

5.2 With respect, that is not correct. In Topics 033 and 034 - General

Coastal Marine zone and Other Coastal zones, the Council's evidence

and legal submissions were unequivocal that there is a distinction

between the two concepts.

5.3 In respect of the dispute at those hearings between the "functional"

and "operational" need to locate in the CMA, the Council's legal

submissions identified that functional need has a narrow definition and

14 Legal Submissions on behalf of Auckland Council for Topics 051 / 054, 7 September

2015, at [6.25].


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is different to operational need.15 Recognising that the phrases would

be relevant to other parts of the Unitary Plan outside the CMA, the

Council proposed definitions to clarify the distinction. The evidence of

Ms Coombes on behalf of Auckland Council stated:16

... This issue is complex as other parts of the PAUP also usefunctional need (for example in relation to natural hazards andto development in ONLs and ONC areas). A pragmatic solutionwould be to use definitions of both terms as follows:

Functional need – A proposal or activity needs tolocate or operate in a particular environment orlocation because it can only occur in thatenvironment or location.

Operational need – A proposal or activity needs to

locate or operate in a particular environment orlocation because the operational characteristics ofthe activity mean that it needs to locate in, ortraverse across, the location occupied by thatenvironment.

5.4 It would be artificial for the functional and operational requirements of

particular retail activities to be treated as synonymous for Topic 051,

where a distinction is proposed by the Council in the Unitary Plan's

coastal provisions and definitions. From a practical perspective,

treating functional and operational as separate matters in the coastal

provisions, but referring to functional requirements only in the

business provisions, will invite legal submissions to the effect that the

difference is intentional and that, accordingly, functional requirements

in the business provisions does not include operational requirements.

Given that Council is not arguing that operational requirements should

be ignored in the business provisions, it is essential to include

reference to functional and operational requirements in order to avoid

ambiguity.

5.5 The JPS's reasoning is consistent with the definitions proposed for the

coastal provisions - in terms of LFR, functional considerations relate to

the specific purpose of the development, while operational

considerations relate to how the function is delivered. (We

15 Legal Submissions on behalf of Auckland Council for Topics 033 / 034, 25 March

2015, at [4.12].16

Primary evidence of Kathryn Anne Coombes on behalf of Auckland Council for Topic

s 033 / 034, 23 February 2015, at [29.10].


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understand that the Council is currently considering these definitions

in light of the Topic 065 - Definitions mediation.)

5.6 The KRG seeks that the provisions proposed in the JPS that

recognise the distinction between functional and operational

requirements be preferred over those proposed by the Council.

6. COMMENTS ON EVIDENCE OF THIRD PARTIES

6.1 The following passages comment on aspects of the evidence filed by

third parties that are particularly germane to the KRG case.

Evidence of John Mackay

6.2 John Mackay has filed three statements of evidence in chief and

rebuttal,17 much of which is opposed to the KRG's position.

6.3 Of particular consequence is Mr Mackay's suggestion that the General

Business and Business Park zones be deleted in their entirety18 or, as

an alternative, that the provision of retail in the General Business

zones be limited.19 The KRG opposes those suggestions and makes

the following submissions.

6.4 The General Business and Business Park zones each have a specific

purpose and function in the Unitary Plan.

(a) The General Business zone is, in effect, the LFR zone; ie the

zone in which it is expected that LFR will be able to be

established, provided potential adverse effects are

addressed. The zone is a critical part of the strategy foraccommodating the increased retail that will be needed as

the city intensifies.

(b) The Business Park zone enables office parks, which do not

have all of the functions and components of a centre but

17 On behalf of Urban Design Forum, New Zealand Institute of Architects and

Generation Zero.18

Evidence of John MacKay, on behalf of the New Zealand Institute of Architects Inc, Auckland Branch, at paragraphs 2 and 3.

19 ibid, at paragraphs 12-15.


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provide a very high amenity location for offices and related

activities. It appears that the Council does not intend to

create more business parks in the future, but it has chosen to

recognise the particular qualities of those that exist.

(c) Both zones have largely been applied to areas that already fit

the anticipated outcome. Thus the General Business zones

are largely occupied by LFR and the Business Park zone has

been applied to a small number of existing office parks.

6.5 For the reasons discussed above, removing or reducing the LFR

function of the General Business zone would alter its purpose and

exacerbate the difficulty in developing new retail in the existing urban

areas. That might be of sufficient significance to require the Unitary

Plan approach to retail to be revisited in its entirety.

6.6 Removing the zones will require the application of another zone to that

land. Mr Mackay has variously suggested that the General Business

and Business Park zones be allocated Light Industry, Mixed Use or

Centre zoning.20 All of those suggestions are problematic:

(a) The Light Industry zone makes almost no provision for retail

other than Trade Suppliers and has very limited provision for

offices. Thus it does not reflect the activities that are

currently present in the General Business or Business Park

zoned areas or that will need to establish there over time to

serve the intensified city.

(b) The Mixed Use zone makes some provision for small scale

retail but is unsuited to the existing General Business areas

with their LFR. Similarly, it makes almost no provision for

offices, which are the key activity in the Business Park zone

and the reason for the zone existing in the first place.

(c) While the office parks could feasibly be zoned as centres,

they have not been developed as such but instead create a

20 ibid, at paragraphs 9, 11, 52 and 54.


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distinct character as office parks. They are not necessarily in

appropriate locations for centres.

(d) The Unitary Plan rightly seeks different urban design and

functional outcomes for the General Business and Centre

zones so there would be very limited potential for altering

General Business to Centre zoning.

6.7 Mr Mackay has also responded to the KRG's use of the phrase

"functional requirements" in his evidence on behalf of the Urban

Design Forum. Mr Mackay considers that "functional preferences" is a

more appropriate term, as the characteristics of LFR (eg blank walls,

cold storage rooms, loading bays etc) are not strictly necessary.

6.8 The KRG strongly disputes this. The witnesses for a number of the

KRG members have referred to the functional and operational

requirements of their businesses both in relation to this topic, and

other earlier topics.21 Each KRG member needs to design their

buildings in a way that adequately provides for their specific needs.

For example, large integrated retail developments may house cinemas

where it is not a "preference" but a requirement that there be no

windows. Similarly supermarkets stock a substantial number of

perishable items. These need to be kept under certain conditions,

which require a particular type of design. Again, these design

constraints cannot be said to be a "preference", but is a necessity in

order to have a functional and operational supermarket.22

6.9 Mr MacKay's comments regarding the role of supermarkets in centres

will be addressed when the supermarket operators present their case.

21 Evidence of Mike Foster, in relation to Topic 005 - RPS Issues, on behalf of

Progressive, at paragraphs 3.2, 3.5 and 3.6; Evidence of Angela Bull in relation toTopic 051 - 054 - Business zones, on behalf of The National Trading Company ofNew Zealand, at paragraphs 4.5 and 5.4; Joint Planning Statement in relation to Topic043 / 044 - Transport, on behalf of KRG, at section 8.

22 In Mr Mackay's own experience with supermarket consent applications, he admits that

he accepted the "functional requirements" because they were reasonable in the

"specific circumstances".


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Don McKenzie and Robert Philpott

6.10 Don McKenzie's evidence for DNZ Property Fund Limited opposes a

number of the proposed IGCs on the basis that they will generate

transport issues.23 Robert Philpott's evidence for the same party

supports a very limited approach to IGCs on the basis that they may

generate adverse consequential effects on centres and that "the

modelling shows there is no purely economic case for providing

additional capacity by way of IGC ".

24

6.11 The KRG disagrees with the approach taken by both witnesses and

considers that their evidence fails to recognise the fundamental

purpose of the IGC:

(a) The evidence appears to be written on the assumption that

identification of land as an IGC will necessarily result in the

development of retail on that land. An IGC will not

necessarily lead to retail activity occurring, however:

(i) The land identified for an IGC has an underlying

zoning and hence a range of activities that will still

be able to occur there without relying on the IGC

status.

(ii) Any retail activity in an IGC will still need consent

and that process will involve consideration of traffic

effects, transport effects and factors and

consequential effects for centres. Thus the factors

that the witnesses are concerned about will be

assessed at the time of the resource consent

23 Evidence of Don McKenzie, on behalf of DNZ Property Fund Limited, at paragraph

6.3.24

Evidence of Robert Philpott, on behalf of DNZ Property Fund Limited, at paragraph

1.10 and Part 7.


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application. It is unnecessary to determine them

now.

(b) Mr Philpott relies on the Council modelling and supports

identifying IGCs only where he is convinced there is an

economic case to provide additional capacity. That ignores:

(i) the impossibility of modelling factors such as

landowner preferences and plans (which may not

coincide with retailer plans);

(ii) the need for supply and demand to coincide in time,

site size, site shape and topography and price for

development to occur; and

(iii) the need for a site to be appropriately located in

terms of a retailer's existing store network before it

will make sense to develop.

(c) The IGC mechanism creates flexibility and opportunity over

the life of the Unitary Plan. In contrast, Mr Philpott's

approach removes flexibility and endeavours to predict both:

(i) where and to what extent retailers will want to

expand their activities in the future; and

(ii) the attitude and actions of landowners in those areas

where he considers an "economic " case has been

made.

7. CONCLUSION

7.1 The KRG respectfully requests that the Hearings Panel recommend

that the Council accepts the amendments to the Business zone

provisions set out in Annexure 2 of the Joint Planning Statement filed

on behalf of the KRG.


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8 September 2015

Douglas Allan - The National Trading Company of New Zealand Limited andKiwi Income Property Trust

Paula Brosnahan - The Warehouse Limited

Bronwyn Carruthers - Bunnings Limited

Allison Arthur-Young - Progressive Enterprises Limited

Francelle Lupis - Scentre (New Zealand) Limited

.

051-054 hrg - key retailers group - legal submissions

Documents