An unprecedented decision by Maitland council to reduce infrastructure fees for Hunter Land has opened the door for other developers to request a similar discount, potentially costing the city millions of dollars.
A “planning loophole” led to Hunter Land, the city’s largest developer, applying for a reduction in Section 94 contributions the company was due to pay for a housing development at Bolwarra.
Another company, Largs Holdings Pty Ltd, also applied for a reduction on a similar development at Bolwarra Heights and was also successful. Both applications were approved by council in October 2016, resulting in a combined saving of $1.2million for the developers.
In April last year, when adopting the new Section 94 infrastructure contributions plan, council reduced the fees from $14,000 to $7000 for each new building block.
This followed the 2006 city-wide contributions plan which operated over a high-growth period resulting in council becoming flush with infrastructure funding. As a result, many areas did not require additional money anymore for parks, libraries, childcare and community halls etc.
Council has refused these applications, citing developments being too far advanced. A council report also said that officers had told developers the contributions were levied on the original consent in good faith.
However Hunter Land and Largs Holdings Pty Ltd applied for a reduction in October 2016 on the grounds that they had not fully developed both residential sub-divisions approved under the 2006 plan and the surplus of undeveloped lots should fall under the 2016 plan.
Councillors approved both applications at a meeting in October 2016, for Hunter Land and Largs Holdings Pty Ltd, despite the Bolwarra Heights plan being recommended for refusal by council planners. In a report, council planners said 60 of the approved 116 lots had been delivered describing consent for the development as being “well embedded in the 2006 plan and the 2016 plan rates could not be reasonably justified”.
Hunter Land’s Land Use Director Brad Everett declined to comment.
At the February 14 council meeting three new applications came before council from developers appealing for the same reduction in Section 94 contribution fees for their sub-divisions at Gillieston Heights, East Maitland and Raworth. All three were refused. A planning source told Fairfax Media the developers’ applications to reduce the contributions would likely be their final push for recompense.
“They can withdraw their original development applications and relodge them under the 2016 contributions plan but that would cost them $100,000 and probably take council six to nine months to approve at best,” the planner said. “They don’t want to rock the boat anymore because they have had no luck and realise they have to work with council over the next few years. They realise they are better off walking away even though they’re still filthy about it not being a level playing field.”
Mayor Peter Blackmore declined to comment on the matter, saying there was no point after the February 14 refusals were passed unanimously.
The story Developer discounts first appeared on The Maitland Mercury.