2013-05-28-council-agenda - Taupo District Council

fTaupO Hospice Trust Lease], [28 May 2013]
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REASON FOR REPORT
The reason for this item is to report back to Council on developments with the proposed lease of
part of the old County Depot reserve [Section 43] to the Taupo Hospice Trust, and seek a decision
with regard to significant lease terms and conditions.
BACKGROUND
On 25 October 2011 , Council resolved to support in principle a proposed lease of around 8000m2
of Section 43 to the Taupo Hospice Trust. Council further resolved that the Chief Executive Officer
should continue to work with the Lake Taupo Hospice Trust to arrange a draft lease for Council's
consideration.
Since this time, staff have been in negotiation with the Trust about their requirements. Terms and
conditions have been discussed and agreed to between the parties subject of course to Council
approval.
The Trust has indicated that the initial 8000m2 identified and agreed by Council will be insufficient.
They require an area of around 1.8 hectares [attachments 1, 2 and 3] for the lease area. The Trust
also requires a lease term of 33 years with at least one, and preferably two rights of renewal,
taking the total term to up to at least 66 years. Although the Reserves Act allows for a lease of up
to 33 years with or without a right of renewal for a similar term, the Resource Management will only
allow a total lease term of up to 35 years without the need for subdivision to create a separate legal
parcel. Therefore, for the Trust to have the security of tenure they require, a subdivision of the
reserve will be required to separate out the lease area.
The Trust has investigated the possibility of subdivision, and also geotechnical matters such as hot
ground and subsidence. They have determined that the site is suitable for their requirements, and
wish to proceed subject to Council approval of the following term and conditions:
1. Initial term of 33 years with a right of renewal for at least one further term of 33 years.
2. Lease area of 1 .8437 hectares more or less subject to subdivision and issue of title
3. Peppercorn rental
The lease would need to be conditional upon issue of the required consents, the cost of which
should be met by the Trust as Lessee.
DISCUSSION
The use of this site by Taupo Hospice to proviae services to me Taupo community has already
been approved in principle by Council in October 2011 . However, at the time this approval was
given, there had been little thought given to the long term needs of the facility, or the terms and
conditions of the lease.
The maximum term of 35 years allowed under the RMA is also insufficient for the long term needs
of Hospice. With the significant investment that they plan to make in this site, they require a
minimum of 66 years. Subdivision consent will be required to separate out the lease area. This will
add additional costs to the development.
Further work by the Hospice has identified the need for a larger area of land for future proofing and
site landscaping purposes than was originally identified to Council in October 2011. The inclusion
of this additional area will allow the buildings to have large, well landscaped set-backs consistent
with the Rural Environment and the location of the facility next to a well-used recreation reserve.
In view of the community benefit of Hospice, and the significant costs associated with this
development, the Hospice Trust requests a peppercorn rental. However, as they also require a
long term lease, this would bind future Councils unless there is an opportunity for review. It is not
unreasonable to waive rental during the establishment period given the costs that will be incurred,
but Council may prefer the option to charge a community rental or even a market rental at some
future date.
DESIRED OUTCOME
Hospice has identified that the site will meet their needs well into the future. The desired outcome
is that they secure long term rights of occupation and development of the area that they believe
they will need at a reasonable and sustainable cost.