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@deirdrekent To be expected when income is taxed and capital gain not...
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@bernardchickey @YourHomeLoanNZ Add ring fencing loses / deal to negative gearing and we might see some balance develop in the economy.
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19
JUN 13

Drive one away and the others will follow




A recent article featured in The Press entitled “Future of factory to be decided soon” outlined Woolston based gelatine producer Gelita’s upcoming decision: will they invest 18 million dollars necessary to restore their Woolston site? We have already produced two articles around this reverse sensitivity issue, “Mobile NIMBYs” and “Where there’s muck there’s brass”.

The last Press article showed a table portraying the number of complaints received by ECAN regarding Gelita, from 2007 to 2013. Generally the issue here is a combination of building damage through the disaster period covered by the table and increased level of complaint. As more inappropriate activities (from the city plan point of view) attract more people causing the classic reverse sensitivity problem. The surprising thing is that consents were granted by the CCC for mixed use on the assumption that ECAN were not finding problems at the time, a simple phone call would have demonstrated that problems would be exacerbated by the mixed use consent. It should not have been granted.

In Woolston the specific example is Cassel’s & Sons bar, who even solicit complaints by displaying a chalkboard with ECAN’s contact details, encouraging patrons to call and complain if they don’t like the smell. This only serves to exacerbate an already difficult situation threatening substantial economic activity and long term productive investment that our city desperately needs.

Consider this problem from the standpoint of an offshore investor, do you want to increase your investment in a place where that investment is threatened, or would you see the risk too great? What are the gains and losses to our community? On the one hand, we have property speculation activity betting on the gentrification of an industrial zone, adding a bar, a few shops and maybe a bottle store threatening several factories and hundreds of jobs and the industrial zone in the City Plan.

Focusing on Gelita, they have operated on the site for have around 100 years; they currently employ 60 people, spending around $7 million into Christchurch through wages, rates, waste charges and materials, adding to a total of around $20 million throughout New Zealand in the last financial year. Gelatin processing is a key part of extracting value from our primary waste stream. If the material can’t be processed it would go to land fill; a cost not a benefit.

If our city continues to demonstrate it has no interest in activities like Gelita we force decision makers to invest elsewhere, as the risk of stranding assets simply become too significant. As a result industrial economic activity that depends on the unique infrastructure in Woolston quickly falters, falls, and exits New Zealand. How many bars and shops will be needed to fill the gap and more importantly where does the money come from to support all that consumption?

Christchurch needs industry, far more than it needs a few more shops and bars. Christchurch needs investment into productive activity. Unless Christchurch demonstrates it has the collective will to remove, as opposed to increase, the risks around industrial investment, that investment will not happen.

Those advocating for a “nicer” less industrial Woolston should think about what it means to 100s of jobs in Woolston, 1000s of jobs in the city; and more broadly what it means to Christchurch and New Zealand and recognise that if they have their way we will all be poorer.

The economic loss will never be replaced by what flows from a few bars and shops.
 


tags: manufacturing, gelita, reverse sensitivity, mobile nimbys, exports
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