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Newsletter Three

29/12/2011

Whats up!!! – What have we done in the last two months? Christmas has been and gone, with another decent ground shudder, and this long-delayed newsletter has to go today – we’ve made a decision! So we’ll fill you in on where we’ve got to, tell you what we’ve found, and ask you for a decision as to whether you want to be involved in three particular projects.

We now have a serious chance to make a decision: Do you want to be one of those who take the next step on a block at Halswell, Woodend or Rangiora? See later for details.

SUMMARY of WHAT WE HAVE BEEN DOING AND PROGRESS TO DATE  Trying to find land. See proposals for three blocks later in this newsletter – all of which we think are worth making offers on if people are keen. We need to know as soon as possible whether you are seriously interested in any of these, so please let us know. The likely costs per section are indicative only, and we won’t know more until we have an offer accepted and find an engineer who has time to do some serious analysis and costing. 

Developing Advertising.

We have started doing leaflet drops in red zone letter boxes,

and have also created some posters to put up in public places such as cafes, stores and community centres in the red zones. See copies on the web site. Please let us know if you want some. We have also developed a Facebook page. Facebook name is cooperative sections. Please visit it and become a friend. Then any updates will come automatically to you when you check Facebook. Also, please “Like” us, and recommend us to your friends so that the word can be spread. Word of mouth is the best kind of advertising. You may wonder why we haven’t advertised more widely sooner, and the principal reason is that we have concluded that most people are not willing to commit unless we can tell them exactly where the proposed site is and what the subdivision plan looks like. Hence we decided it was important to identify some additional suitable sites, and this is what we have focused on doing (see below). 

Level of Interest. There are currently 44 seriously interested people.

At the time of

writing the last newsletter, we had had responses from 71 people to whom we emailed the newsletter and asked them to undertake an on-line survey. 28 people have not responded at all to that newsletter and accompanying email, and a further 13 responded to say that they have left Christchurch, have bought another property or are no longer interested. That leaves 30 who are interested, and a further 14 who have expressed interest since them. 

Public Meetings. We have done three or four public presentations, but we have

decided we need to become much more visible to help this work. For that reason Geoff is going to do a series of public meetings in the red zones in the second half of January. We’re not sure how cooperativesections.co.nz

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best to publicise the meetings, but we’re trying to work with local community groups to get their help and ideas. If you have ideas on places to hold meetings, or a group you

think we should speak to, please let us know.

 Refining the structure and Process. We had initially hoped to get people involved in the subdivision proposals. While we still really welcome people’s involvement, and we’ll take on board all the suggestions we can get, it has become clear that trying to get large numbers of people to agree on section layout and covenants will be very difficult for a small subdivision (1 – 2 Ha) and almost impossible for larger subdivisions. For that reason our intention is to change slightly the way of running things. 

We will identify sites and ask people if they want to be involved.

At the same time we will get an urban planner, Janet Reeves, to draw up a proposed subdivision plan so that potential members can see what is proposed. Where people have specific wants, we think we can probably modify the plans to cope with those.

Then we will put indicative prices on sections. First in – first served for the sections. If the actual cost for the entire block is less than the sum of the indicative costs, then members will get a refund.

 Fixed Prices if you aren’t happy with risk. It is also now clear from the survey and from conversations we have had that many people cannot cope with the uncertainty about price. We therefore intend to offer a fixed price for sections (which will be 10 % more than the expected cost of development). People can choose either the fixed price or can pay the actual cost and take the risk that it will be more or less than the fixed price. Any surpluses will go towards developing the next project. 

Contract Terms. We have asked our lawyers (Anderson Lloyd – who are giving advice

for free), to draw up formal draft terms of contract for purchasing both the initial areas of land and for subsequent section purchases.

But in simple terms, If you say that “Yes I am interested in this block”, then it will cost you and every other person involved in this block perhaps $1,000 to take it to the next stage of getting the preliminary engineering and planning advice to confirm that it seems feasible and that the costs are likely to be as we expect. We then commit to buying the block and paying the development costs. 

Financing . The results of the survey (28 people) were very interesting – for details see

the website. About two thirds of the respondents could find the initial $50,000, and less than half could find the full amount required for development. This suggests that I will have to persuade

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banks to help bankroll this project, and this requires an innovative bank. I hope to start negotiating with banks early in the New Year.

Another Cooperative Developer is on the Scene. You may recently have seen in the newspapers or heard on radio about a cooperative development proposal, and wondered if it is us. No its not! It’s a second group with almost identical objectives and ideas, and I discussed these ideas with their principal trustee, Simon White, almost four months ago after he contacted me. I met Simon again two weeks ago and we agreed to co-operate and share information as much as possible, but to continue our separate entities, mainly because we are operating in rather different ways. They have a more formal trust structure, which after discussion with our lawyers we decided against, and they have a more public figure, City Councillor Glenn Livingstone, as their “Champion”, but the most significant differences are that (a) they have decided to allow only red zone people to buy their land, and (b) they are trying to get some public funding to pay for some of the technical work prior to putting forward their proposal to their members. By contrast we are happy to have anyone involved, because we think the best way to help the red zone people is to find enough people to enable a project to happen, and this is hard enough to do without restricting it to red zone people. If we got overwhelmed with applications, we might start considering whether to give preference to those from the red zone, but this has not yet been a problem. And if it looked like being a problem we’d probably just try and find another block of land. If you are Red Zoned and seriously interested in cooperative development, then I strongly recommend that you not only continue to work with us, but also contact Canterbury Cooperative Land Trust and express your interest. http://www.canterburyaffordablesections.org.nz I think that they are probably a bit behind us in identifying land, but you have nothing to lose by having the chance to be involved in either project.

KEEP GOING - NEXT PAGES HAVE DETAILS ON BLOCKS THAT MAY BE AVAILABLE

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Land Possibilities It was always going to be a problem to find 180 people to sign up to the original 12 Ha development, in spite of all the advantages of that site. And it now seems almost certain that another developer will buy it – although I understand that their offer is still conditional. So we have tried to find alternative sites which are smaller, and also in different places. We are now working on sites in Halswell, Central City, Woodend and Rangiora.

1. Halswell. 3.6 Ha. 50 sections. Raw Land Cost per 450m2 section $40,000estimate Finished section cost likely to be $100,000 – 150,000 depending on section size This is close to the earlier site, but opens onto Halswell Junction road. As with all other Halswell developments1, development can begin now but building of new houses cannot take place until a new main trunk sewer is completed in June 2013. Another downside is that the sections will probably be $15,000 more expensive than at the original Quaifes road site, but the location off Halswell Junction road means that this block is 2.1 km closer to the Halswell shopping centre and town than was the original block. We also think it may have some development advantages. We have asked our urban planner, Janet Reeves, to create a section layout. She should have completed this within the next couple of weeks. Our belief is that this block is well suited to our purposes, and we should make an offer to buy it, subject to getting 3 months to get a Geotech report and some engineering costings done. It is a riskier project than the Rangiora and Woodend ones detailed below, because it is not yet zoned residential, although it is within the area in which CCC and Ecan have indicated they are happy to see residential development occur, and within which the large Fulton Hogan project has been approved.

Are you keen to commit to this one or interested to find out more? Contact us for more details!

1

Including, I understand, most of the 1,200 lot Fulton Hogan project currently under development.

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2. Rangiora 4 Ha. 50 sections. Raw Land Cost per 550m2 section $40 45,000- estimate Likely total section cost $100,000 – 140,000 depending on section size. May include up to 15 relocated houses, not more than 10 years old. Subject to our approval of quality of the proposed relocated building. This block is already zoned residential and we are waiting for the owner to get a valuation completed. The owner seems very amenable to the idea of working with us on this project, and has provided a draft subdivision plan. We have asked Janet to review that plan and see if she can improve on it. We have asked an engineer to give us rough development costs and a time line. We expect him to get back to us in mid-January. Our belief is that this is likely to be a very suitable block for the needs of people on that side of town, and we should make an offer to buy it, subject to getting 3 months to get a Geotech report and some engineering costings done.

Are you keen to commit to this one or interested to find out more? Contact us for more details!

3. Woodend Township 1.2 Ha. 10 - 15 sections. Raw Land per 700m2 section $36,000 estimate Finished section cost likely to be $110,000 – 140,000 depending on section size . This land is zoned residential and has an existing house (approximate value $320,000 ). The implicit land cost is around $400,000 per Ha, which I understand is about the same price per Ha as adjacent 9.8 Ha has just been sold for to other developers. Council services are relatively more expensive here than in Rangiora (the council is seeking to recover the costs of some expensive infrastructure), and this means that the completed section cost will probably be similar to the Rangiora block. Covenants will permit relocated houses not less than 10 years old – subject to our approval. Our belief is that this block is a reasonable buy for people who want to be on that side of town, and if enough people are interested we should make an offer to buy it, subject to getting 3 months to get a Geotech report and some engineering costings done.

Are you keen to commit to this one or really interested to find out more? Contact us for more details!

4.

Kaiapoi – within proposed Silverstream development, 4 Ha $2.5 million. 56 sections. Raw Land Cost per 500 m2 section $45,000 estimate.

This land is zoned residential and has an existing house (estimated value $300,000 ). We have spoken to engineers associated with the development, and they advise that fill of around 0.5 – 1.5 cooperativesections.co.nz

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metres in depth is required on the 4 Ha site. This could cost of the order of $15-20,000 / section, so the effective cost for raw land is more like $60,000 per section. In addition, the principal Silverstream developer is going to start development from the southwest corner of the Silverstream site, and the 4 Ha block we looked at is in the North corner. Hence we can probably not get access to the sewer and water networks until the initial 500 sections of the Silverstream development have been developed. This means that the 4 Ha block is to some degree dependent on the whims of the developers. Also, there is a limit to the number of sections that are allowed to be developed prior to a major upgrading of Butchers Road, which we understand the council will have to do, and it is not clear when this is intended to occur. For the above reasons we do not favour continuing to look at this block.

Other land under investigation 

Kaiapoi.

We are continuing to look for other blocks near Kaiapoi, and have met with Murray Walls, who is a local red-zoned draughtsman who is trying to save some of the relatively modern houses in the red zoned area, which are suitable for relocation. We are currently reviewing the suitability of one other Kaiapoi site.

 Christchurch Central City We have been in contact with a person who has three adjacent blocks of land on Gloucester St opposite ChCh East school. Houses have been demolished and the owner is looking to rebuild, and would like to find people who want to buy in that area. She will build whatever the market wants, but is certainly open to the idea of 8 or 10 smaller dwellings which make good use of the site. She may alternatively be willing to sell the sections. If enough people are interested we can talk to her about the possibilities. It would, in our view, not suit conventional 3 – 4 bedroom homes, but could be ideal for a more innovative approach with people wanting smaller houses (100 m2 say) and smaller sections or sections held in common ownership.

 Halswell Murphys Road area 6 Ha – not yet on market. Cost similar to other Halswell sections 

Halswell 6.7 Ha - details currently being sought. It is not zoned residential, although we think it is within the area CCC and Ecan has indicated they are happy to see residential development occur. Let us know if you are interested and contact us for more details

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