2011-2012 Annual Report - Full Version - PDF - Palmerston North ...

Activity - Commercial or Strategic InvestmentsWhat the Council doesThe Council has a range of assets that it owns forcommercial or strategic reasons. These include theLong Term Investment Fund, the Palmerston NorthAirport and the Gordon Kear Forest.The Council also has 96 Public Housing Units atthree locations around the City (Achilles Court,Rakaia Place and Waiheke Court). These are part ofthe Council’s Investment Activity because rents arecharged at market rates.The Council provides some services to otherCouncils on a commercial basis. These include acall centre and building services.Why the Council does this and itscontribution to Council vision andmajor goalsThe Council owns these assets because theygenerate revenue which helps fund the services itprovides to residents. This reduces the amount itneeds in rates.The Council also acts as a “friendly landlord” for thePublic Housing Units by not requiring potentialtenants to have rental references, New Zealandcitizenship or a credit history in this country.This means that there is a social aspect to thishousing that helps new migrants and internationalstudents to get a footing in the housing market inPalmerston North.The Council manages these assets through theLiability Management and Investment Policy andthe Airport Statement of Intent. Hence thereare no external levels of service or performancemeasures.What happened in the yearCommercial or Strategic InvestmentsGordon Kear Forest - The fourth season ofclearfelling has been completed in the GordonKear Forest, which is jointly owned by PalmerstonNorth City and Manawatu District Councils.Clearfelling is scheduled to take nine years in totaland is carried out mainly in summer when groundconditions are dry.The intended harvest programme was cut backthis season due to lower log prices. Proceeds fromlog sales were used to cover harvest costs and torepay further outstanding forestry encouragementloans.Site works have been carried out in preparation forreplanting early in the 2012/13 year.Investment Fund - Consistent with the Council’sstrategy to progressively wind down theInvestment Fund in an orderly manner, $2.59million was distributed back to the Councilduring the year. This compared with the budgetassumption of $3.3 million. The Fund earned $0.89million during the year (compared with the budgetassumption of $1.3 million) and Fund valuesreduced by $0.6 million (budget assumption nil).Investment Property - The commercial propertyportfolio is mostly made up of the Council’sretail properties in George Street, Main Street,two restaurant spaces in The Square next to theCouncil Chamber and the ground floor spaces ofthe Regent Theatre. The main highlight for thisactivity is that all of these properties are beingleased at present apart from one space in MainStreet temporarily being used as a workshop forThe Council manages these assetsthrough the Liability Managementand Investment Policy and theAirport Statement of Intent. Hencethere are no external levels of serviceor performance measures.the Civic Administration re-roofing project. Therehave been a number of enquiries from prospectivetenants about taking up this Main Street spaceonce the re-roofing project is complete. Thesecommercial properties are mostly associatedwith Council properties and help to ensure thatthe spaces at street level are vibrant and active.The shops associated with the Regent Theatreare particularly important in this regard as theycontinue to reinforce a positive image of the retailsector in Broadway Avenue.The office space rental in the fourth and fifth floorof the Civic Administration Building remains largelyvacant. There are some long standing tenants onthe third and fourth floors however there has beenvery little interest in the remaining floor space. Inthe 2012/13 year the Council will continue to tryand lease the vacant spaces on the fourth and fifthfloors.Palmerston North City Council Annual Report 2011/12What the Council Does Commercial or Strategic InvestmentsSupportServices121