Spotlight on Christchurch: Epilogue – ‘Trickle up theory’ a confirmed success

Canterbury’s ‘economic potential’ trickles up

It seems that with every day that passes more pieces fall into place.

Jig-saw addicts know the feeling well: A piece seemingly no different from any other catches your eye and, as you place it down, it fits snugly into a gap that was always meant to receive it.

And, when it does, the big picture fills out that little bit more.

Today’s The Press (26 July, 2013) had this to report (on p.2 in the print edition):

The wealth of prominent Cantabrians Kevin Hickman and Philip Carter has skyrocketed in the past year, according to the NBR Rich List, which says the two have benefited from a ‘‘whitehot’’ property market.

Hickman presumably had his wealth jump from $150m last year to $250m this year largely because of his rest home holdings, given his co-ownership of Ryman Healthcare (with John Ryder).

The story is a bit different for Carter:

Carter, a well-known property investor now involved in the rebuild of quake-torn Christchurch, is valued at $120m, up from $95m [a 26 per cent increase] last year.

Carter has been the owner of hotels and other commercial properties in Christchurch, many damaged in the quakes.

The National Business Review editor-in-chief Nevil Gibson said the surge in wealth of those on the list had been mainly through substantial gains in most investment classes.

The New Zealand sharemarket returned 25.9 per cent last year and had since added another 10 per cent, he said.

At the same time, the property market, both residential and commercial, had been white hot, Gibson said.

It seems that the anchor projects are working their magic on central city property prices, just as intended.

And there may be more benefits for Carter (and other prominent Christchurch families) to come:

Other Cantabrians to feature on the yearly list include the Gough family, with an estimated worth of $300m based on property and their Caterpillar dealership.

NBR noted that Carter had linked with the Goughs and Quintin Henderson in setting up HCG Group, expected to become involved in the earthquake rebuild. [Through a proposal for the retail precinct, amongst others no doubt.]

Interestingly, the lead focus on Carter, Hickman and the Goughs in the article just quoted from the print edition was not present in the on-line version of this report (which you can read here).

Instead, the focus was on Gary Rooney, a South Canterbury businessman who owns an earthmoving business that is heavily involved in the Rangitata South Irrigation Scheme. That scheme involves construction of a 16.5 million cubic metre capacity water storage facility covering nearly 300 hectares. It has helped push Rooney into the rich list as a new entrant:

Gary Rooney is a new entry, with $90 million of net worth based on his earthmoving business.

Rooney has been involved in several ventures, including the Rangitata South irrigation scheme to provide water to thousands of hectares of farmland.

Presumably, last year Rooney’s wealth was less than the (roughly) $50 million needed to enter it. Now it’s $90 million. It must have doubled in one year.

The consenting of the Rangitata South scheme was in February, 2009 – well before ECan councillors were replaced with Commissioners. It was, however, a response to the intensification of dairy farming in the district:

“Although much of the land in the command area already has at least some irrigation from groundwater supplies, groundwater yields are not sufficient to provide reliable supply, particularly further away from the coast… the purpose of the scheme is to “drought-proof” the command area, over 60% of which has already been converted to dairying,” commissioners said.

[The ‘commissioners’ mentioned are the Hearing Commissioners for the consents, not the now-installed ECan Commissioners.]

The Hearing Commissioners’ press release noted a difference between this irrigation scheme and the Central Water Plains scheme:

“Institutional parties (such as Fish and Game) generally accepted that the flow management regime under the National Water Conservation Order to a large extent addressed matters pertaining to the Rangitata River, such as in-stream values, river ecology, terrestrial ecology and recreation. This contrasts with the debate over the adequacy or otherwise of the regime for abstraction from the Waimakariri River, as expressed in submissions relating to the Central Plains Water scheme.”

Making use of Canterbury’s resources is big business – as Rooney’s elevation to the rich list testifies. It’s no wonder that such riches were not going to be put at risk of delay or derailment by allowing elected councillors to determine outcomes (as I argued in this post last year).

Central Plains Water notes the date of the granting of consents for its project as 1 June, 2010:

On 1 June 2010 a panel of independent commissioners, acting on behalf of Environment Canterbury, announced their decision to grant Central Plains Water Limited consent to take water from the Waimakariri and Rakaia rivers to irrigate the Central Canterbury Plains.

This decision was an important milestone for Central Plains Water and followed hearings that took more than 15 months to complete.

The ECan Commissioners were installed in April, 2010.

At the time, Minister Nick Smith assured Parliament that:

The appointment of commissioners is an interim measure. Commissioners will be in place for only as long as they are needed to do the job. The legislation makes plain that the period, at the very longest, will extend to the 2013 local body election. This provides sufficient time to place Environment Canterbury on a firmer footing.

Unfortunately, Smith inexplicably miscalculated. When the Act was amended in 2013, Michael Woodhouse (Immigration Minister speaking on behalf of the Minister of Local Government) argued that:

Through this bill the commissioners are being given the opportunity to complete their turn-round of the Canterbury situation. Given the decades of division and inertia that characterised regional planning in Canterbury before their appointment, there is a real risk that the work could come undone otherwise.

The second-generation land and water regional plan and other plans will not be adopted by late 2013. … These initiatives are critical for freshwater decision-making and unlocking Canterbury’s economic potential in an environmentally sustainable manner.

Woodhouse was making these statements in relation to an Amendment Bill to amend the original Act that installed commissioners. That Amendment Bill followed from an announcement by Nick Smith’s successor, David Carter, and Amy Adams in September, 2012:

“Their [the Commissioners’] strong governance through the earthquake response and rebuild planning has been excellent and it is vital that this work continues. The disruption caused by the earthquakes has made the Canterbury situation unique, and the focus must now be on ensuring the region can maximise its full economic potential as Christchurch rebuilds.”

If Rooney’s experience is anything to go by, we can expect many more ‘new entrants’ into the rich list from Canterbury in 2014.

…

Another very useful jig-saw piece dropped onto the table a few days ago. First term City Councillor Tim Carter – Bob Parker’s nemesis, son of Philip Carter and once touted as a mayoral candidate – has strongly indicated that he won’t be seeking re-election as a Councillor this time around:

High-profile Christchurch City councillor Tim Carter says he will likely bow out of local body politics in October.

The first-term councillor has been under pressure from mayoral candidate Lianne Dalziel – who credits him with persuading her to contest the mayoralty – to stand for another term, but he told The Press yesterday he was unlikely to do so.

He and his wife were expecting their first child in October and he wanted to be a hands-on dad.

I guess that with Parker (and Marryatt?) out of the picture it’s time to don the leather airman’s jacket and announce ‘Mission Accomplished’. Nothing more to do here in Christchurch, it seems for this daring young turk. He is clearly still an ambitious man, but his ambitions were just as clearly not what they may have seemed.

In fact, it doesn’t seem that long ago that Tim Carter was being lauded for his skills and efforts around the Council table and hailed as representative of a new generation of local politicians. His political future looked assured.

Interestingly, those very talents were mentioned by the NBR in the reporting of its rich list. Once again from the print edition of The Press (p. 2):

‘‘Philip Carter’s son, Tim, is also closely involved with Carter Group, when he’s not busy with city business. In his capacity as a city councillor he is one of the few able to give Mayor Bob Parker a run for his money around the meeting table,’’ the list said.

That would be the same ‘Carter Group’ whose holdings and investments have given Philip Carter’s rich list standing a shot of adrenaline?

And Tim Carter’s involvement with the Carter Group is, indeed, ‘close’. In another post last year, I noted how Tim Carter fronted the Group in hearings over property developments and was clearly pivotal in its decision making.

We can only hope that now that Carter is lightening his load by (probably) not standing for Council, that other demands on his time don’t arise. In particular, here’s hoping that  his family’s rapidly growing property development interests – riding as they do on the back of the bounty accruing from their ‘revitalised’ central city property portfolio courtesy of the Blueprint – do not start to absorb too much of his newly-released time.

That would be sad for someone so determined to be a “hands-on dad“.

Two more days, two more pieces. The picture could hardly be clearer.

Overall, then, the government’s plans to unlock the “economic potential” of Christchurch and Canterbury seem to be succeeding surprisingly quickly – the trickle up theory is working well.