CITY AREAS

Evening Post, Volume CXIII, Issue 86, 12 April 1927, Page 12

CITY AREAS

FARISH AND OLD CUSTOMS STREETS

THE SYNDICATE'S PROPOSAL

In the "Evening Post" columns several correspondents have criticised the views expressed by Mr. W. Nash, secretary' of the Labour Party, and a candidate for a seat on the City Council, regarding the Farish street and Old Customs street proposal. Mr. \ash has now forwarded the following reply:—

"Pair Deal" and. Mr. Brickell will excuse me if this one reply covers the points raised in their letters. The.responsibility for the headline rests with the editor of the "Evening Post." He was probably of opinion that "Civic Affairs" were more important than the differences of candidates.

If readers of "The Post" will refer to your issues of 2nd and 7th April they will find that "Pair Deal" has travelled from Karori to Miramar. On 2nd April he says, "Speaking at Karori, Mr. Nash condemns, etc., etc." In his latest letter he refers to a speech at Miramar. I do not remember referring to the question at Miramar. '

With regard to the report. Reporters are so limited by space they cannot publish the speeches of all candidates in full, but my reference to the incorrect report had nothing to do- with the reporter; it referred exclusively to "Fair Deal's" unfair interpretation. I said that I did not condemn the settlement made by the City Council with the owners of the property. If your correspondent will look up the editor and obtain the.original letter, he will find that the worda "owners of the property" are underlined.' The condemnation was reserved for "the proposal which allowed a syndicate of financiers to exploit the improvements created by the expenditure ' of city funds."

There may be reasonable grounds for the City Council to negotiate with pro-perty-owners for the purpose of improving the city streets, although any such negotiations would need careful analysis and examination before completing but the negotiations regarding Farish street and Old Customs street have not been between the property-owners and the City Council, but between a syndicate of financiers and the City Council, and it is these financiers who will reap where they have not sown. Tho fact that "Fair Deal" is not a councillor does' not limit his knowledge of the negotiations. He knows more about the proposals than any of tho councillors.

May I now reply to the' other letter published in your issue of 7th April? In response to the invitation, I at Mr. Mowbray's office, examined the plans, discussed the proposals, and I am satisfied that if and when the alterations aro carried out the area will bo greatly improved; also that the rateablo values will bo increased rby the amounts mentioned in my speech at Karori, when I said that I estimated, roughly, that the Farish street properties were worth £15d per foot, that when the improvements were made they would bo worth £500 per foot, which leaves an ultimate net profit of £350 per foot.

The promoters of tho syndicate say that tho improvements will increase the rateable value about four times by increasing land values. My estimate was therefore on tho low side. Their cstimato is four hundred per cent. I snid threo hundred and thirty-three per cent.. Your correspondent states:— 1. That tho proposals will convert tin area which is now a' discredit to tho city into a modern shopping area. 2. That they will clear up a slum. 3. That tho proposals will increase tho rateable value about four times by increasing land values. ■ 4. That had the proposals been turned down and. completed under tho Town Planning Act, the cost to tho council would have been so great that tho area would have remained as it is for many years to come.

5. That the increased revenuo will pay tho capital cost in fivo or six years; and

0. That tho business details asked for by mo aro of no general interest. "With regard to No. 1; If tho council has money to expend on clearing slum areas, there aro other spots tho clear-ing-up of which would bo nioro beneficial to tho health and beauty oi" the city, and with things as they aro today, it is no part of tho council's duty to provido roads and arteries to enable speculators to build shopping aroas. In any ease, tho blamo for tho slumming of the area in question is not on the council. The owners of theso properties may clean them up at any time they desire.

2. Whilst not completely confined to housing areas, tho word "slum" is generally used to designate places whoro peoplo arc living in ugly, overcrowded conditions.

3. The suggestion that tho rateable value will bo increased fourfold establishes tho indictment, in other words, this increase in valuo will bo created by the works of the City Council, and if someono is to reap four pounds for every pound sown, then others have to sow without reaping. How arc land values created 1? The value of city land for shopping is de-. tennined by: (a) The purchasing power of. the population; (b) tho accessibility of tho premises; (c) the natural flow of. pedestrian and other traffic which is largely determined by the facilities .provided by tho governing authorities, trams, buses, roads, public services, etc., etc. The main factor, however, is the purchasing power of tho population. This being so, if tho purchasing power is not increased, the provision of a now shopping area does not create new land values; it only transfers them. Tho increased values in Old Customs and Farish streets will bo reflected in decreased values in those parts of Willis and Manners streets from which the traffic has been diverted. This may not bo noticed in that tho natural increase in population should bring a corresponding increase in purchasing power, but tho proposed scheme is bound to affect tho value of some of the properties in Willis and Manners streets. , 4. Town-planning: It is impossible to ignore tho Town ■planning Act in connection with tho proposals. This Act was passed during tho last session of Parliament. Section 1 provides that the Act shall come into operation on Ist January, 1927.. Section 13 provides that every borough shall prepare and submit to tho Town-planning Board a town-planning scheme, in respect of all land within the borough. Section 30, sub-section 1, reads: —■ "Betterment: 'For the purposes of this section the expression 'betterment increase' in relation to any rateable property, means such increase in the value of that property as is attributable to the approval of a town or regional planning scheme, or to the carrying-out of any work authorised by tho scheme." Section 30, sub-section 7, reads:— "One-half of tho amount of the betterment increase.in the value of any rateable property shall constitute a debt payablo to the local authority.

If those sections of tho Act mean anything, tli'oy. moan that the-council will tako one-half of the value of the improvements created by the expenditure of the public funds. According to the evidence supplied by your.correspondent, one-half tjf this total will bo at least £100,000. ' The facts requiring 'emphasis are •that:" '■■■■ ■'■ ' •. .

(a). If-the wotlc iits iv- with tho town-

planning scheme, the council should do the work and reap the benefit provided by the Act, ;

(b) If they do not fit in with the town-planning scheme, the work should not be authori.ed.

The suggestion that the scheme may bo taken as a preliminary to a larger scheme later on will not bear examination. If the value of the properties will increase four times, then it will cost four tiroes as much to resume them later on than to-day. Personally I am of opinion that if the present proposals are completed, and it is subsequently decided that the larger scheme to make Farish street a full width street is approved, it will cost at leas'; ten times as much to do the work ten years hence that it would to-day.

It is probable that the widening of Farish street will be part of a townplanning scheme, but the other streets, Old Customs street and St. Hill street, do not enter into the question from a traffic or town-planning point of vie.v.

The. acquirement of these properties is simply what is called a commercial or business proposition to obtain community created values. The speculators, however, should not be able to rope in the City Council to assist them in their work.

The widening of Farish street would fit in with the proposal to" widen Mercer street. This would be a natural diversion of traffic, but if Mercer street is to be widened this proposal is an excellent one—no case can be made out for the expenditure of city funds in widening another area about 20 yards a.?ay.

3. Increased Eate Revenue.—Your correspondent says that the increased revenue will pay the capital cost in five or six years. "What does this mean? Presume the expenditure on the improvements by the council to be A 30,000. This sum recouped in six years means £5000 per annum. If the rates are assessed on the unimproved value at 6d in the &, the estimated increase in the value of the'property would be £200,000. This £200,----000 or any other sum which represents the enhanced values will go. to the speculators who are promoting the scheme. (You can hardly call it speculation.)

6. With regard to the business details. Your correspondent says that they are of no general' interest. May I refer him to your sub-loader of 12th March, in which you say:

"The ratepayers who foot the bill are entitled to an answer to these questions." Any project which entails the expenditure of city funds is of general interest. v

I am informed that a statement on ■the question is to be. published by the City Council, and would suggest that the matter is one of some urgency. In conclusion, to complete the card trick opened by "Fair Deal," and continued by Mr. Brickell, it appears that they are of opinion that community values and assets of tho city should be subject to the rules of card games. Providing the cards are dealt fairly, and tlie game is played according to rules, then the winners are justified iv taking the stakes. This may bo a pleasant and interesting evening pastime, but I am doubtful whether the game in this case is a. legitimate one. Tho players are tho City Council as trustees for the citizens 011 the ono side and the property owners, plus a syndicato of financiers, on the other. No one would object to the players enjoying the game, but some consideration should bo given to the stakes. The players may; enjoy the game, they may call, they may bluff, they may get their excitement as the game proceeds, but the important factor is that tho stakes belong to somebody else (tho citizens), and it is an accepted axiom that trustees should bo doubly careful when dealing with trust funds.