|Changing shape, flavour of PoS - Part
Thursday 24th June, 2004
Last week we outlined some of the
emerging issues in our capital city as we proceed to developed nation
This week we will look more closely at
these trends, in particular the shift by commercial users to the western
and northern fringes of the capital.
These are fundamental, long-term changes
which will have implications for the shape and flavour of PoS.
The main commercial users are in western
and northern fringes of PoS and there are at least six large-scale
commercial schemes in the late planning/early construction stages also
in those parts of the city. The trend seems likely to deepen with
completion and occupation of these schemes.
Even ignoring the human factors outlined
in last week’s article, there are significant obstacles to the
redevelopment of downtown PoS.
Some of these include the difficult
pattern into which most of the city’s land is divided and the stringent
carparking requirements the town planners attach to all but retail
Of course the two sets of concerns mesh
in that even if one is able to put up a first-class office in the
traditional core of PoS, there is the understandable reluctance of
office users to make that choice, given the more attractive environment
now offered by the fringes.
One of the key points in understanding
the changes we are discussing is that a large part of the areas to which
most of the commercial activity has been directed are in fact owned by
the State with the occupiers of those lands being leaseholders. The
areas in question are:
Woodbrook—with leases granted by the PoS
St Clair—with leases granted by the
“Corbeau Town” or lower Woodbrook—with
leases granted by the State.
These lands are the majority of the land
in the “target areas”, with only the relatively small Newtown and
Tranquility Estates being freehold in the western fringe of PoS.
Most of these leases restrict use to
single-family residential and this gives the landlord the ability to
control the character and pace of development outside of the
In this situation, the landlord is not
usually obliged to agree to a change of use and that bargaining power is
used to change the terms of the lease in favour of the landlord in cases
where a more beneficial use is being applied for.
The landlord can seek payment for their
permission to change use by increasing the rent, payment of a lump-sum
payment or some combination of those.
As we discussed in previous columns,
there are challenging issues in both the funding of local services and
the management of PoS. How can the growing pressure on these limited
resources be managed to ensure the best long-term benefits for our
The consideration of this issue would
have to include these points:
Benefits of leasehold schemes
A leasehold scheme is the model used to
sell land in an integrated development scheme and the selling point is
that there will be some order in the use of the properties in that
For example, there can be restrictions on
use: opening hours: quality, height and numbers of buildings and so on.
Purchasers of these leases sign up with
knowledge of the restrictions with the assurance that these will
preserve the value of their investment.
There is a strong feeling here among
purchasers of leaseholds that they have “bought the property” and can do
as they please, whatever the lease specifies.
I have to say that this is sometimes a
selective sentiment since one can find the same people determined to
both maintain the character of their own upscale leasehold
neighbourhoods and ignore the restrictions in leases in the “target”
commercial suburbs of PoS.
There can be no doubt that the
establishment and proper management of a strong leasehold scheme can
operate to preserve values by maintaining the intended character of a
Some of the examples of this in “greater”
PoS would include Westmoorings, Fairways, St Clair (north of St Clair
Avenue) and of course, Woodbrook, before the current pressure developed
to its present point.
I listened with great interest to the
Power 102FM programme last week Wednesday night, which was a live
broadcast of a town meeting of Woodbrook residents with their MP, the
mayor and the director of town planning.
The negative impact of the rapid
commercialisation of this suburb was in every voice I heard. The
complaints were deep and heartfelt. People felt that their neighbourhood
was under assault; they were unable to get into their driveways; there
were constant parking problems in the area; prices had skyrocketed with
only commercial users being able or willing to buy and so on.
The biggest question was: what are the
The seminal point emerging from that
tense meeting was the sense of powerlessness these residents felt in
controlling the way in which their community was being reshaped around
them. When we consider the falling population of PoS, and the strength
of the business lobby, it is not surprising to note the diminishing
influence of the residents.
Can we build a world-class city if
stakeholders feel that their legitimate concerns are sidelined?
Proper public policy would give a voice
to all the stakeholders.
One size fits all
As mentioned in an earlier column, the
application of this kind of policy can lead to serious losses to the
For example, in Woodbrook, the City
Corporation’s policy is to charge annual residential rents of about 33˘
a square foot for new leases to residential users. The rate for
commercial users is $1 a square foot.
This policy has the undoubted benefit of
certainty since all the players know the cost of their choices, but
there can be serious losses to the public purse if possible benefits are
The practical application of this means
that a highly-visible lot on Wrightson Road or Ariapita Avenue is
charged the same rent as one on Roberts Street or a side-street.
It is acceptable that the City
Corporation would allow limited commercial use on their lands, but it is
arguably a mismanagement of those public resources to allow these
benefits to escape as a matter of policy.
No prudent property owner would rent
shops in a mall at the same rents, there are different prices for corner
spots, units with external visibility and so on. And rightly so.
The Kingston outcome
The issues raised here are pointing
towards a divided PoS in the near future, with the downtown being a
stark, unappealing place and the west of the city being the trendy
There is a real possibility of our
capital becoming like Kingston, with the necessity to invest hugely to
recapture the downtown area as an attractive destination. We still have
time to avoid the possibility of the heart of our capital becoming “ghettoised.”
Next week, we will conclude by examining
the broader proposals for the development of PoS.