The fight for the future of the CBD played out at this week’s second generation district plan (2GP) hearings, where a group representing central city landowners said vacancies in the area could increase if the council allowed retail outlets in historic-listed buildings in the warehouse precinct.
However, those calling on the rules to be relaxed say CBD owners only have themselves to blame for the number of empty shops.
Increased competition would force them to upgrade their buildings and stop charging exorbitant rents.
Heart of Dunedin chairman Simon Eddy, who is also general manager of the Golden Centre Mall, told commissioners that the group, which represents CBD landowners and retailers, believed a unique selling point for Dunedin was at stake.
"Ultimately, one of Dunedin’s great advantages is that it’s the only city in New Zealand where all of your central retail hub is actually concentrated in the heart."
Pushing retail activity out of the CBD would heighten an already existing problem, Mr Eddy said.
"It’s not the role of [councils] to chose favourites and there is a sense among CBD retailers, in particular, that council favours the warehouse precinct."
Fellow group member Sam Guest pointed to growing vacancies in the three main blocks of the CBD, which according to Colliers International had gone from 8% of units in 2014 to 13% in May this year.
Landowners were all ready being forced to offer better conditions and drop rents.
Rent had been reduced by 25% in one recent case, Mr Guest said.
The group was not opposed to the reviving fortunes of the warehouse precinct, but believed it could continue to be developed under the present rules, where general retail was not a permitted activity.
Commissioner David Benson-Pope noted "it might be a good thing" rental rates were dropping in the area.
"Because it is often suggested, and it has been to us, that some landowners are their own worst enemies, with a lack of maintenance and extremely high rents."
CBD landowner and member of Heart of Dunedin Tony Clear told the Otago Daily Times he disputed the suggestion rents were exorbitant in the CBD.
"I’m not sure that [Cr] Benson-Pope is even partially qualified to comment on that, because I don’t think he has any commercial background in the property sector."
There was a wide variety of options within the CBD in terms of rental prices and businesses which did not want to pay for prime real estate on George St could chose side streets, such as St Andrew St.
He accepted submitters on both sides of the argument were protecting their own self interests, but believed it was "really important we retain a heart of the city".
Auckland-based economist Fraser Colegrave, who gave evidence on behalf of Foodstuffs, Calder Stewart and Otago Land Group Ltd, who are calling for rules on retail to be relaxed in other parts of the city, told the ODT, CBD land owners were "driving their own tenants out".
People were leaving the CBD "because it’s far too expensive and the reason it’s too expensive is because there is no competition", Mr Colegrave said.
Dunedin risked losing businesses if restrictions were kept, as people who could not afford to rent in the area could leave altogether.
Dunedin heritage developer and Lawrie Forbes said there was room for retail in both the CBD and the warehouse precinct.
He doubted there would be an exodus from the CBD if rules were relaxed, as the warehouse precinct attracted a different type of business.
"The warehouse precinct is successful because of the building owners who work on their buildings and do quite creative things with them and, therefore, we get quite creative tenants."
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Comments
"Landowners were all ready being forced to offer better conditions and drop rents....".
So, in other words: react to market conditions. Or: alter their product offering to meet the capacity of consumer. Or: face the realities of an open market. Or are we missing something really obvious here?
Is it a Southern thing, that you can't comment on something without empirical knowledge. As to. The state. Of the case?
For decades successive councils have poured all their focus into the ever smaller CBD to the exclusion of other parts of our city. This has led to those land owners in the favourite area having to do nothing but count their ever growing piles of cash. It is well past time to broaden our outlook. Lower rents across the retail sector would be an excellent outcome that would allow new retail businesses to open and flourish. In my childhood Dunedin has several thriving retail areas. There was the Exchange area, Caversham, South Dunedin and the current CBD. Now it is just the CBD. Caversham is practically dead, South Dunedin not far off and the Exchange area, stretching into the warehouse district, showing signs of life and innovation. I hope the council helps instead of continuing to line the pockets of those CBD land owners so scared of having to earn their profits.
It's great that the warehouse precinct is forcing George/Princes St building owners to drop rental/lease costs, and they are naive if they think that isn't why their shops are empty.
Mosgiel does, or did, suffer the same problem, as does probably every other empty shop in town. That, and/or dodgy/not pleasant building conditions.
Competition is good, if you don't like it then sell up and let someone else look after it! Up your game people.