The council decided yesterday to allow developers three months without interest on deferred payments, after which interest would be charged.
It followed a recommendation from CODC assets and contracts manager Murray Washington, who told the council some developers in the district had expressed their difficulty in meeting development contributions.
"We are saying times are tough and we are prepared to do something, but we're only prepared to do something without becoming a bank," Mr Washington said.
He said three months was a standard timeframe in credit terms.
One developer scorned the resolution, saying it was a small step in the right direction but did not nearly go far enough to providing an incentive for further development in Central Otago.
Molyneux Estate co-developer Bob Kilgour, of Alexandra, said ideally the council would defer contributions without demanding interest.
"Of the estimated $1 million it will cost us to complete half of the original Molyneux development's infrastructure, $223,000 will be paid to the council in development contributions.
That infrastructure which includes roads, footpaths, electrical services, and stormwater pipes, is then handed over to the council.
"It's a small thing in the right direction but by charging interest on the deferment of development contributions, the council's offsetting the benefits they think they are giving," Mr Kilgour said.
If the council's resolution becomes operative through its Long Term Community Council Plan (LTCCP), developers will be expected to pay full contributions as well as interest incurred after three months of deferred payments.
An administration fee would also be incurred, and all payments would be expected to be made as soon as sufficient lots were sold to match the value of contribution charges.
The council would be deemed a preferred creditor, and would require a guaranteed bond or impose a statutory land charge to protect its interest.
Councillors voted to submit the proposal to the LTCCP, which was scheduled to become operative at the end of June following the council's decision to approve its draft document yesterday.
Public submissions will be allowed.
