Merivale Community Centre Proposal. Purpose. Executive Summary. Recommendations May Council. DC No: 142

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1 4^ Tauran^aCity Council May 2014 Merivale Community Centre Proposal DC No: 142 Purpose 1. To consider a request from Merivale Community Incorporated (MCI) for the use of Council land for development of a new community centre in Merivale. Executive Summary 2. MCI currently rents the Council owned property (land and building) at 10 Kesteven Ave, Merivale for use as a community centre operating since 1995 and providing valuable and much needed services to their local community. 3. The land at 417 Fraser Street was purchased in 2013 to provide additional land for the potential expansion ofthe Merivale Community Centre. 4. Strategic and community documents developed over the last ten years identify the need for MCI and the Merivale Community Centre to expand their services to the community, and that their current premises limit the ability to do this. 5. MCI is seeking Council support primarily through the provision of land at 10 Kesteven Ave and 417 Fraser Street to enable them to redevelop the site with a new community centre. 6. An evaluation has been undertaken for this proposal and is attached to this report. The evaluation considers background information, community profile and need, property information, strategic context, and option analysis. 7. The recommended option from the evaluation is to accept in principle the MCI proposal subject to completion of a Feasibility Study and a detailed Business Plan. The only recommended change to the MCI proposal is to lease 10 Kesteven Ave and 417 Fraser Street to the new charitable entity as opposed to gifting of the land. Recommendations That the Council: (a) (b) Approve in principle the lease of 10 Kesteven Avenue and 417 Fraser Street to the new charitable entity established for the development and operation of a new community centre at Merivale, and that this is subject to Council being satisfied with the Feasibility Study and Business Plan for the new community centre. Agree to the lease having a peppercorn land rental of $1 per annum for 10 Kesteven Avenue and 417 Fraser Street. Merivale Community Centre Proposal -1 - Objective ID: A

2 ^^^^ gq Council TauratiifaCity 19 May 2014 (c) (d) Agree to allow Merivale Community Incorporated to sell the existing Council owned building located at 10 Kesteven Avenue, and the use the proceeds of sale (if any) towards development of the new community centre. Agree to assist where possible with the resource consent costs associated with the development of the new community centre. (e) That Council commence the process to stop the service lane being Lot 12 DPS 3345 (the Service Lane) pursuant to sections 342 and 345 of the Local Government Act 1974; and (f) (g) If no objections are received by the date specified in accordance with Schedule 10 of the Local Government Act 1974 for the lodging of objections. Council proceeds to complete the road stopping process in respect of the Service Lane; or If objections are received to the stopping of the Service Lane, the objections are to be referred back to Council. Discussion 8. Since 1995 Council has had a close working relationship with MCI. This recognises the significant work that MCI do within their community and the challenges they face in doing this particularly with regard to Merivale being an area of high deprivation. Council works closely with MCI on a range of things either where Council is planning to undertake works in the local area (eg Southern Pipeline), or where MCI have identified issues that Council can play a role in helping to address (eg graffiti, road safety, recreation). 9. MCI have identified that their premises at 10 Kesteven Ave are too small to enable them to more effectively deliver services to their community, and fully achieve their objectives as outlined in MCI strategic documents. 10. To this extent, MCI is seeking the following areas of support from Council to enable them to progress development of a new community centre: Provision of land at 10 Kesteven Avenue and 417 Fraser Street for the purpose of development of a new community centre. MCI request that Council gift this land to a new charitable entity whose sole purpose will be to own and manage the centre for the benefit of the community in perpetuity. Agreement for MCI to sell the existing Council owned building on 10 Kesteven Ave and use the proceeds of sale towards development of the new community centre. Agreement to remove the paper road between 417 Fraser Street and 10 Kesteven Ave at Council's cost. Agreement to assist MCI with costs associated with the consenting process 11. An evaluation has been undertaken for this proposal and is attached to this report. The evaluation considers background information, community profile and need, property information, strategic context, and option analysis. Merivale Community Centre Proposal

3 Taurattifa CHy Bl Council 19 May 2014 Consideration Community 12. The attached evaluation identifies that there is local community support and that there is a strong local need for enhancing the current services provided from the Merivale Community Centre. Significance 13. The decision to lease land for development of a new community centre in Merivale is significant in that it will affect a sub-group or assortment of people within the community. However as this group of people are likely to be located within the Merivale area, it is considered that the MCI have carried out extensive consultation with their local community to determine the need for a larger space to carry out their activities and enhance the services delivered to the community within this area. Implementation Issues 14. MCI have identified that subject to Council approval, the next step is to commence the fundraising process and development of the feasibility study. The feasibility study will be required to be reported back to Council upon completion. 15. The road stopping process outlined in Council Resolutions (e), (f) and (g) can commence following consideration of this report. Attachments Title Evaluation of the Merivale Community Centre Proposal Signatories Authors Cheryl Steiner: Team Leader Strategic and Corporate Planning Authorisers Christine Jones: General Manager Strategy Merivale Community Centre Proposal

4 Attachment 1 62, STANDARD PROPOSAL EVALUATION FORM PROPOSAL DESCRIPTION Proposal Name: Proposal Sponsor: Proposal Description: Merivale Community Centre Proposal Christine Jones: General Manager Strategy To consider a proposal from Merivale Community Incorporated for development of a new community centre in Merivale. EVALUATION BACKGROUND 2.1 Merivale Community Centre Merivale Community Centre Incorporated (MCI) was established by residents in 1992 with the mission of "Helping People to Help Themselves". Today the mission has evolved to "Building our Community Together". MCI currently rents the Council owned property at 10 Kesteven Ave, Merivale for use as a community centre operating since In summary the community centre provides a place where: the office of MCI is located the community can come together for community activities the community can gain information and support the youth programmes provided by MCI are delivered from whanau support programmes are provided from other agencies deliver support services to the people of Merivale community based meetings are held Merivale Community Centre has a long established history of working closely with their local community and is often identified and recognised through awards as a best practice example of community development within Tauranga. 2.2 Council Support for Merivale Community Centre Propertv Council purchased 10 Kesteven Ave in 1995 in response to a request from MCI to have premises to operate a community centre from. The property (land and building) is leased to Merivale Community Centre (MCI) at a peppercorn rate of $1 per annum. The current lease expires on 31 August 2015 with no right of renewal. Council purchased 417 Fraser Street in 2013 for the purpose of providing additional land for the potential expansion of the MCC. This vacant site is now incorporated into the existing lease arrangement. Refer Attachment A for a site plan.

5 Relationship 63 Since 1995 Council has had a close working relationship with MCI. This recognises the significant work that MCI do within their community and the challenges they face in doing this particularly with regard to Merivale being an area of high deprivation. Council works closely with MCI on a range of things either where Council is planning to undertake works in the local area (eg Southern Pipeline), or where MCI have identified issues that Council can play a role in helping to address (eg graffiti, road safety, recreation). 2.3 Merivale Community Incorporated Proposal MCI have identified that their premises are too small to enable them to more effectively deliver services to their community, and fully achieve their objectives as outlined in MCI strategic documents. To this extent, MCI is seeking the following areas of support from Council to enable them to progress development of a new community centre: a) Provision of land at 10 Kesteven Avenue and 417 Fraser Street for the purpose of development of a new community centre. MCI request that Council gift this land to a new charitable entity whose sole purpose will be to own and manage the centre for the benefit of the community in perpetuity. b) Agreement for MCI to sell the existing Council owned building on 10 Kesteven Ave and use the proceeds of sale towards development of the new community centre. c) Agreement to remove the paper road between 417 Fraser Street and 10 Kesteven Ave at Council's cost. d) Agreement to assist MCI with costs associated with the consenting process. Other matters of relevance are: MCI will lead a fundraising project to fund the development and construction of the new community centre and have stated that no additional ratepayer funding will be sought for the design and construction (additional to provision of land and proceeds from sale of existing building). If a lease arrangement is put in place, MCI request to continue with the current peppercorn rate. There will be a percentage of space in the new community centre that will be rented commercially to provide an income stream to support operational costs of the building. Certainty of funding operational costs has been an ongoing issue with MCI. The development of the new community centre will be staged so that MCI can maintain a continuous service to the community An initial concept plan of what the new community centre could look like is included in Attachment B. The new charitable entity will provide the opportunity for other organisations to potentially share the space with the MCI, and provide co-ordinated service delivery to the Merivale community. Subject to Council approval MCI anticipate holding a fundraising and project launch. Conservative estimates from MCI are that the fundraising process will take one year and then the actual construction of the new community centre would take around eight months.

6 64 DECISION MAKING BACKGROUND 3.1 Community Profile and Need Key statistics for the Merivale community (defined by the Yatton Park Area Unit) sourced from the 2006 and 2013 census information are outlined below: Tauranga Average 2013 Population Households Single parent with children 37% 40% 17% Couples without children 26% 27% 45% Residents under the age of 15yrs 30% 28% 21% Residents over the age of 65yrs 10% 11% 19% Maori population 39% 37% 17% Households with total income less than $20,000 15% 19% 11% Residents aged 15yrs with no qualification 33% 33% 22% Of the households in this area unit that lived in 38% 31% 8% rented property, the number that are Housing NZ tenants Over 15yrs that are unemployed 11% 5% Regular smokers over 15yrs 33% 29% 14% No internet access at home 59% 36% 23% No motor vehicle 9% 14% 6% In summary, a high deprivation rate (based on low levels of income, employment, living standards and education - see Attachment C) is a key factor that has influenced the extent of social problems within the Merivale community which includes poverty, alcohol and drug issues, anti-social behaviour and social disruption. While the statistics for Merivale generally track below average in a number of areas of concern, there are poslives and strengths that can be built on. Over the past ten years, MCI have carried out extensive engagement within their community, and research and analysis of the outcome of this. Through this work MCI have identified that a large proportion of the community want to see their community improve, particularly for the children to be encouraged to develop their capability to be the best that they can be as contributing members of the community. The two key documents that summarise this information are: Positive and Proud - Building a Better Future for Merivale (2008), and Puahou - A New Model for Community Development (2013). MCI are in the process of undertaking a feasibility study for the new community centre which will include a detailed business plan to ensure the project is financially viable. This will use the above documents as a basis to provide clear

7 65 justification for the need for the new community centre, and also help to ensure the design of the facility best meets the needs of the community. 3.2 The New Community Centre MCI are leading the project for development of a new community centre in Merivale. MCI anticipate that the new building will be a services hub for the Merivale, Gate Pa and Greerton areas. There are a number of other agencies that have been involved to date including Merivale School, Whanau Aroha Early Childhood Centre, and Tutarawananga Te Kohanga Reo. The involvement of the local community has occurred through the continuing interaction MCI has with local residents. Discussions have also been had with other agencies and community groups including NZ Police, Housing New Zealand, Te Tuinga Whanau, Pacific Island Community Trust Tauranga, and health providers. MCI have identified the following objectives for the new community centre: To better meet the needs of the community (than the existing community centre can do) Provision of a service hub for multiple organisations with a range of services that complement existing provision To serve the Merivale community with capacity to expand support to Gate Pa and Greerton Enhanced space for a focus on youth programmes and youth services provision High technology hub Provision of easy, effective access to services A service hub that is recognised as a model for best practice for interagency collaboration A resource for residents to support the advancement of community causes In summary, from a physical point of view the new community centre aims to provide a larger, more inviting and accessible facility. The proposed location of the community centre on Fraser Street will also provide a stronger profile to both the local community and other communities nearby, purely from a visibility perspective. From a social perspective, the new community centre has the potential to positively contribute to the Merivale community in the same way that the Arataki Community Centre has done for the Arataki community. The facility will enable an enhanced range of services to be delivered to the community through greater collaboration with other agencies. Most importantly for MCI, the new facility will send a clear message to the community that there is a strong willingness to continue to proactively work to address the social problems that this community face. 3.3 Why should Council support this proposal? Community Development describes the process of empowering communities to actively participate, make decisions, and work towards self-reliance. Communities tend to have the best knowledge of their local needs and priorities and how these can be addressed. Communities however can't always do it alone, which provides an opportunity for Council (and other agencies) to look at how they can empower communities to build self-reliance. Communities can

8 66 achieve great outcomes beyond what Councils are able to deliver which if supported can only benefit Council and the city as a whole. Council provides support to a number of community groups in recognition of the role that they play in delivering valuable services to the community. The level of support differs for each community which recognises that not every community is the same in terms of their demographics, issues and opportunities. Council has increasingly recognised that communities play a pivotal role in community development, and that they cannot do this alone. The recent formation of the Community Development Committee and a community match fund are both ways in which Council is looking at providing support for local communities to make a difference. Recent examples of Council support for community centres include: Purchase of a church building to provide a location for the Welcome Bay Community Centre (which provides similar services to MCI) Provision of land and a cash contribution to development of the Hartford Ave community support centres (re-located from a council property on Dickson Road) Development of a new community centre in Arataki that has helped to provide a strong community focal point which didn't previously exist The potential outcomes that Council could contribute to through supporting the MCI proposal are: Continuing to empower the Merivale community to work together Continuing to connect Council and the community in a positive way Provision of space to enable the community to generate innovative solutions to local issues Contributing to building a more self-reliant and resilient community. Council's contribution to these outcomes could be recognised through: Provision of two properties for development of a new community centre Contribution from the sale proceeds of the existing building towards the new community centre Foregoing of potential land rental revenue eg commercial rent Assistance with resource consent costs 3.4 Financial Information The MCI plans are at the initial concept stage and more detailed work is required on these plans, a lot of which will be informed by the feasibility study. To this extent, further detail on the construction costs will be developed once agreement on use of the land for this purpose has been received and final plans developed. Once the size and function of the building has been determined, the income and operational costs can also be determined. Initial estimates based on the current concept plan and market rates is a possible rental income of $120,000 per annum, with operating cost estimates (excluding depreciation) around $60,000 per annum.

9 3.5 Property Information 10 Kesteven Ave 417 Fraser Street Purchase date Purchase price $140,000 as a residential property $290,000 as a vacant commercial property House built Tauranga City Plan zone The house was converted to a community centre in 1995 but basically remains as a house and the opportunity cost/value is most likely based on residential value. Passive Open Space $110,000 funded from development contributions collected for community building purposes and remainder funded from the Strategic Property Activity. n/a Commercial Land area 667m' 550m*^ or 668m'^ inclusive of the three metre road. Building information Approx 125m footprint. Weatherboard cladding and iron roof Average to fair condition. Improvement.s - large shed located to the rear of the site used as a meeting space/youth centre (approximately 63m^). Sale of the building is likely to yield minimal return once costs of removal and site clean-up are factored in Vacant site. Valuation Rating valuation is $255,000 (reflective of a residential value). Recent purchase price of $290,000. Other considerations The potential gifting or sale of this land to the new entity could raise Public Works Act offer-back implications which need to be investigated further should Council decide to proceed down this track. There is a 3 metre area of land located to the rear of the property that is identified as unformed road. The site is now vacant following the removal ofthe church building. New Communitv Centre - Propertv Considerations The total land area of both sites is 1335m^. The total value of the two sites is $545,000 based on recent purchase price and rating valuation. The area of land occupied by the new community centre would increase from the current building area of 188m^ to approximately 844m^, with the top floor providing an additional 280m2 of floor space. MCI have requested that 10 Kesteven Ave and 417 Fraser Street be gifted to the new charitable entity. Council owns a significant amount of land that is leased to community organisations. It is recommended that 10 Kesteven Ave and 417 Fraser Street remain in Council ownership to ensure Council has a

10 68 level of control over the ongoing use of these properties for community purposes. The level of investment on the site by the new entity can be recognised as part of the negotiation of the lease terms and conditions. The lease would also include appropriate clauses to ensure the new community centre is run primarily for community purposes with reporting standards to give effect to this. The three metre unformed road will need to be stopped to enable the development to proceed, regardless of whether the land is gifted or leased. Road stopping is a publicly notified process (which Council would undertake) and includes the following; property owners/tenants adjoining the legal road (unformed) to be stopped will be directly consulted with. - the process is advertised in the local newspaper and signs placed on site, any objections received need to be considered by Council at a formal meeting. If objections are received and are not resolved/withdrawn, and Council chooses to disallow them, the objections together with the plans, and a full description of the proposed road stopping are required to be sent to the Environment Court who will make the final decision. 4. STRATEGIC CONTEXT 4.1 Merivale Neighbourhood Plan (2003) The Merivale Neighbourhood Plan was developed in Council facilitated the process with MCI and the local community. The Plan identified that MCI was not able to provide sufficient facilities or programmes to meet community demand from the Merivale area, and that their ability to do this was limited by the size of the building that they occupy (and lack of carparking). The Merivale Neighbourhood Plan has now been superseded with MCl's Positive and Proud community development plan, and more recently the launch of Puahou (a new model for community development). These documents support expansion of the volume of events, programmes, courses and activities run by the centre, with particular emphasis on children and young people. 4.2 Our Community Places Strategy (2008) The vision of the Strategy is that "Our Community Places... connect and support strong communities". The vision recognises the key role that community facilities play in developing and supporting strong communities. This can be through providing venues that allow people to connect and belong, creating an identity within that community, and providing a community heart to the local area. The focus of the strategy is primarily on facilities that Council has direct involvement in, however, it is recognised that privately owned and/or non- Council facilities such as schools, churches, and clubrooms also make a considerable contribution to the network of community facilities available for use. In some cases such as provision of the Merivale Community Centre,

11 69 Council has entered into a partnership with another organisation where the facility supports or significantly contributes to an identified community demand. The Strategy outlines a variety of options for Council involvement and assistance with community organisations which include: direct financial assistance (eg: grants, contracts), organisational support (eg: training, advice), rebates or remissions (eg: rates relief), indirect assistance (eg: leasing land and buildings), community share agreements. Specific comments in the strategy relating to MCI recognise the strong community support for this facility and the essential social and health services provided to the community. The strategy also recognises that lack of funding is a constant issue for MCI to enable them to do what they want to do in the community and that the size of the community centre and inability to expand restricts their growth. 4.3 Positive and Proud (2008) This report was developed by MCI to provide a snapshot of how the residents of Merivale feel about their suburb, and identifies a vision and strategies to move help move the community forward. The three strategies recommended in the document are: Connecting Merivale - expanding the volume of activities, events, programmes etc with particular emphasis on children and young people, developing an overarching philosophy affirming everyone's right to feel safe all ofthe time, and revitalising the area around the shops. Manaaki Mokupuna - develop a new model for supporting parents and whanau through better inter-agency co-operation and joint working, to enhance the quality of parenting. Transition Merivale - under the umbrella of Transition Towns, develop a programme of education and action to prepare the community for the challenges and changes associated with climate change and peak oil. Positive and Proud recognises the role that the MCI has in being an effective catalyst for change. It also called on social agencies and community organisations to listen to the community and work together more effectively. 4.4 Puahou (2012) This report was developed in 2012 to identify a new model for community development in Merivale, as a next step of the journey from Positive and Proud. The following is an extract from this document to explain what it sets out to achieve: "Puahou is founded on the idea that good relationships are at the heart of positive personal and community growth. Local solutions to local problems are increasingly regarded as best practice, however our experience is that local communities are seldom truly empowered and supported to do this. If we can accept that we are failing those in most need in our society, we can then set upon a refreshed search to understand how we are failing, what may be going on that we may have misunderstood, and how we can respond to that."

12 Puahou identifies five action areas: 70 Connect - build relationships, get to know people Be active - movement, exercise, play Take notice - insight and awareness Keep learning - hobbies, education, courses Give - generosity, compassion, time 4.5 Creating a Merivale Youth Space (2012) This report was developed by the young people of Merivale to help them achieve their vision of a dedicated youth space in Merivale. Funding for this was partly sourced from Youth Development Partnership Funding that Council secured in partnership with MCI in The youth space would offer a wide variety of youth-based programmes, social services and activities, all housed on site. The report states that this will need to occur through a community based partnership. Four options for a youth space are considered: Construction of an independent youth space next to Surrey Grove Reserve Re-development of the existing community centre site - building a 2 storey building housing the community centre, with a dedicated youth space Redevelopment of the whole corner site and existing community centre site Re-development of the Merivale shops A youth leadership team has been established to help guide this proposal through to the next stage, and it is anticipated that this group will work with MCI to progress development of the new community centre and a dedicated youth space within it. 5. KEY CONSIDERATIONS OF OPTIONS ANALYSIS 5.1 Feasibility Study and Business Case MCI have identified that they will be undertaking development of a feasibility study to ensure there is clear rationale for development of a new community centre and to also guide the detailed design and function ofthe centre. There is already a significant amount of research and community engagement that has taken place by MCI to inform this study. This information demonstrates a strong community need for continuation of enhanced services from the MCI. As the design is only at a conceptual stage, MCI are seeking Council approval for use of this land prior to developing more detailed design and subsequently a detailed business plan to ensure ongoing financial viability of the new community centre. This information could be required to be reported back to Council to provide a level of comfort with the ongoing sustainability of the new community centre and its operations.

13 Council investment and financial considerations Council have supported the Merivale community through purchase of 10 Kesteven Ave and 417 Fraser Street for community centre purposes. The land rental has remained at $1 per annum since Moving forward, MCI have identified that they would fund the construction of the new community centre through fundraising efforts. The ongoing operational costs would also be funded by MCI through funding efforts and also through annual revenue from commercial use of the building. It is recognised that from a financial perspective, MCI struggle from time to time to both meet their ongoing costs, and deliver the extent of services that they feel is necessary for their community. The provision of a new community centre could address the lack of space issue but could also place significantly more financial pressure on the organisation. However the potential to secure revenue from commercial use of the new community centre building noting that this would be complementary to existing commercial use in the area, would provide MCI with ongoing certainty of income to assist with day to day operational costs. MCI, with the support of Council, had previously explored a targeted rate to help with this funding but this was not supported by a large number of the community. 5.3 Community consultation on the proposal The use of 10 Kesteven Ave for a community centre is a long established and accepted use of this site. The purchase of 417 Fraser St was considered outside of an Annual Plan process and therefore the community were not involved in this decision. Council could choose to undertake consultation on the proposed use of 10 Kesteven Ave and 417 Fraser Street for development of a new community centre. This could either occur as part of the LTP process (March/April 2015) or as a separate consultation process with the community. A consultation process will impact on the timeframes of MCI as they require a level of certainty on the future use of this land to enable them to commence the fundraising process. 5.4 Legislative considerations The road stopping for the area in between 10 Kesteven Ave and 417 Fraser Street will need to be carried out in accordance with the Local Government Act. If Council direction is to consider gifting 10 Kesteven Ave as per the MCI request, further work will need to be done on the acquisition of this property to assess whether the Public Works Act offer back requirements need to be applied. 417 Fraser Street was purchased with full offer back waivers. 5.5 User Fees and Charges Review Council is reviewing the user fees and charges methodology for Council land/buildings occupied by community organisations. The outcome of this review will flow through into the LTP process and will be applied as rent reviews are required. As the MCI lease expires in August 2015, the rent

14 72 could be reviewed to align with the proposed new methodology. The outcome of this on the MCI site is unknown at this stage. 6. SUMMARY OF OPTIONS CONSIDERED Option Key Components Accept Merivale Community Centre Incorporated Proposal a) Provision of land at 10 Kesteven Avenue and 417 Fraser Street for the purpose of development of a new community centre. MCI request that Council gift this land to a new charitable entity whose sole purpose will be to own and manage the centre for the benefit of the community in perpetuity. b) Agreement for MCI to sell the existing Council owned building on 10 Kesteven Ave and use the proceeds of sale towards development of the new community centre. c) Agreement to remove the paper road between 417 Fraser Street and 10 Kesteven Ave at Council's cost. d) Agreement to assist MCI with costs associated with the consenting process. Accept Tauranga City Council Staff Recommendation As per Option 1, but Council would retain ownership of 10 Kesteven Ave and 417 Fraser Street and enter into a lease arrangement with the new charitable entity. Decline Merivale Community Centre Incorporated Proposal Status Quo. 10 Kesteven Ave and 417 Fraser Street are retained in Council ownership and leased to MCI for the purpose of operating a community centre from the existing residential building.

15 OPTION EVALUATION Option 1: Merivale Community Incorporated Proposal Option Description This option is the full proposal from MCI: a) Provision of land at 10 Kesteven Avenue and 417 Fraser Street for the purpose of development of a new community centre. MCI request that Council gift this land to a new charitable entity whose sole purpose will be to own and manage the centre for the benefit of the community in perpetuity. b) Agreement for MCI to sell the existing Council owned building on 10 Kesteven Ave and use the proceeds of sale towards development of the new community centre. c) Agreement to remove the paper road between 417 Fraser Street and 10 Kesteven Ave at Council's cost. d) Agreement to assist MCI with costs associated with the consenting process Strategic Fit and Identified Need There is a history of strategic and community research and analysis that identifies the need for MCI to expand their services to the community and have larger premises to do this from Option Advantages Signals Council commitment to continue to invest and support community development in Merivale. Provides opportunity for MCI to expand their services to the community. Provides MCI and the new entity with flexibility as to how the land is used in the future, and fulfils the MCI proposal request. Provide MCI with land assets that could assist with the fundraising process Option Disadvantages Sale of Council land limits any future opportunity for use of this land by Council should community circumstances change. The potential for community resistance to gifting and use of Council land for this purpose without public consultation on the proposal. Further work required on potential offer-back provisions for 10 Kesteven Ave which may impact on the ability to carry out this option Financial Considerations Costs to Council of this option: gifting the estimated value of 10 Kesteven Ave and 417 Fraser Street to a new charitable entity. The total value of both sites is approximately $545,000 based on a recent rating valuation and recent purchase price. forego any potential future revenue from the lease of these sites, mainly with regard to potential commercial revenue from 417 Fraser Street. costs associated with the road stopping process (consultation, legal). costs associated with the resource consenting process.

16 Option 2: Tauranga City Council Staff Recommendation Option Description As per Option 1, but Council would retain ownership of 10 Kesteven Ave and 417 Fraser Street and enter into a lease arrangement with the new charitable entity and apply a peppercorn land rental of $1 per annum Strategic Fit and Identified Need There is a history of strategic and community research and analysis that identifies the need for MCI to expand their services to the community and have larger premises to do this from Option Advantages Signals Council commitment to continue to invest and support community development in Merivale. Provides opportunity for MCI to expand their services to the community. An advantage for Council over Option 1 is that the land continues to be retained in Council ownership so that future opportunities for Council use of this land could be realised Option Disadvantages Does not fully achieve the MCI proposal as land would nol be gifted, however MCI did indicate that if this was the case, they would like to continue with a peppercorn land rental of $1 per annum. The potential for community resistance to lease of Council land (417 Fraser Street) at a peppercorn rate for this purpose without public consultation on the proposal Financial Considerations Costs to Council of this option: forego any potential future revenue from the lease of these sites, mainly with regard to potential commercial revenue from 417 Fraser Street. costs associated with development of a new lease costs associated with the road stopping process (consultation, legal). costs associated with the resource consenting process.

17 7.3 Option 3: Decline Proposal Option Description Status Quo. 10 Kesteven Ave and 417 Fraser Street are retained in Council ownership and leased to MCI for the purpose of operating a community centre from the existing Council owned residential building Strategic Fit and Identified Need There is a history of strategic and community research and analysis that identifies the need for MCI to expand their services to the community and have larger premises to do this from. If Council was to decline the MCI proposal, MCI would need to look at other options available to them to expand their services to the community. This could involve the purchase of land located elsewhere in the Merivale area Option Advantages Potential for Council to consider other options for the use of 417 Fraser Street Option Disadvantages Does not meet the MCI objectives to expand their services to the community from their existing location. Will require MCI to consider other options for potential expansion Financial Considerations This depends on whether Council wish to review the current land rental of $1 per annum for MCI to occupy 10 Kesteven Ave and 417 Fraser Street, to align with the outcomes of the user fees and charges review.