Agenda of Economic Development Committee

PALMERSTON NORTH CITY COUNCIL

Economic Development Committee MEETING

3 June 2020

Order of Business

NOTES:

· The Economic Development Committee meeting coincides with the ordinary meeting of the Infrastructure Committee. The Committees will conduct business in the following order:

- Infrastructure Committee

- Economic Development Committee

· Due to the changing situation in relation to COVID-19, this meeting will also be held via audio visual links. A recording of the meeting will be made available on our website shortly after the meeting has finished.

If you wish to attend this meeting via audio visual link then please contact the Democracy & Governance Administrator, Natalya Kushnirenko, on natalya.kushnirenko@pncc.govt.nz to request a link.

1. Apologies

2. Notification of Additional Items

Pursuant to Sections 46A(7) and 46A(7A) of the Local Government Official Information and Meetings Act 1987, to receive the Chairperson’s explanation that specified item(s), which do not appear on the Agenda of this meeting and/or the meeting to be held with the public excluded, will be discussed.

Any additions in accordance with Section 46A(7) must be approved by resolution with an explanation as to why they cannot be delayed until a future meeting.

Any additions in accordance with Section 46A(7A) may be received or referred to a subsequent meeting for further discussion. No resolution, decision or recommendation can be made in respect of a minor item.

3. Declarations of Interest (if any)

Members are reminded of their duty to give a general notice of any interest of items to be considered on this agenda and the need to declare these interests.

4. Public Comment

To receive comments from members of the public on matters specified on this Agenda or, if time permits, on other Committee matters.

(NOTE: If the Committee wishes to consider or discuss any issue raised that is not specified on the Agenda, other than to receive the comment made or refer it to the Chief Executive, then a resolution will need to be made in accordance with clause 2 above.)

5. Presentation - RACE Incorporated Page 7

6. Presentation - Manawatu Chamber of Commerce Page 9

7. Presentation - Central Economic Development Agency Page 11

8. Confirmation of Minutes Page 21

“That the minutes of the Economic Development Committee meeting of 11 March 2020 Part I Public be confirmed as a true and correct record.”

9. Summary report on the March 2020 Palmerston North Quarterly Economic Monitor, Major Developments, and Quarterly Retail Report for April 2020 Page 27

Memorandum, presented by Peter Crawford, Economic Policy Advisor and Linda Stewart, CEO, CEDA.

10. Business Improvement District Policy Page 65

Memorandum, presented by David Murphy, City Planning Manager.

11. Inner City/CBD Portfolio Update (May) Page 103

Memorandum, presented by Councillor Leonie Hapeta.

12. Committee Work Schedule Page 107

13. Exclusion of Public

To be moved:

“That the public be excluded from the following parts of the proceedings of this meeting listed in the table below.

The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under Section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows:

General subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Ground(s) under Section 48(1) for passing this resolution

This resolution is made in reliance on Section 48(1)(a) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by Section 6 or Section 7 of that Act which would be prejudiced by the holding of the whole or the relevant part of the proceedings of the meeting in public as stated in the above table.

Also that the persons listed below be permitted to remain after the public has been excluded for the reasons stated.

[Add Third Parties], because of their knowledge and ability to assist the meeting in speaking to their report/s [or other matters as specified] and answering questions, noting that such person/s will be present at the meeting only for the items that relate to their respective report/s [or matters as specified].

Palmerston North City Council

Minutes of the Economic Development Committee Meeting Part I Public, held in the Council Chamber, First Floor, Civic Administration Building, 32 The Square, Palmerston North on 11 March 2020, commencing at 9.02am

Members

Present:

Councillor Tangi Utikere (in the Chair), The Mayor (Grant Smith) and Councillors Brent Barrett, Susan Baty, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Patrick Handcock ONZM, Leonie Hapeta, Bruno Petrenas, Aleisha Rutherford and Mr Ruma Karaitiana.

Non Members:

Councillor Lorna Johnson.

Apologies:

Councillors Rachel Bowen, Zulfiqar Butt (for early departure), Lew Findlay QSM, Billy Meehan and Karen Naylor.

NOTE: Prior to the commencement of the meeting, Mr Ruma Karaitiana made a Declaration of Office.

Councillor Zulfiqar Butt left the meeting at 10.39am during consideration of clause 5. He entered the meeting again at 11.46am during consideration of clause 8. He was not present for clauses 5 to 7 inclusive.

Councillor Lew Findlay QSM was present when the meeting resumed at 11.08am. He was not present for clauses 1 to 5 inclusive.

Mr Ruma Karaitiana was not present when the meeting resumed at 1.09pm. He was not present for clauses 9 and 10.

1-20

Apologies

Moved Tangi Utikere, seconded Leonie Hapeta.

The COMMITTEE RESOLVED

1. That the Committee receive the apologies.

Clause 1-20 above was carried 13 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Brent Barrett, Susan Baty, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Patrick Handcock ONZM, Leonie Hapeta, Lorna Johnson, Bruno Petrenas, Aleisha Rutherford, Tangi Utikere and Mr Ruma Karaitiana.

2-20

Public Participation at Meetings

Memorandum, presented by Natalya Kushnirenko, Democracy & Governance Administrator.

Moved Tangi Utikere, seconded Leonie Hapeta.

The COMMITTEE RESOLVED

1. That the Economic Development Committee set aside a public comment section of not more than 30 minutes at the commencement of each ordinary meeting of the Committee to provide members of the community the opportunity to comment.

Clause 2-20 above was carried 13 votes to 0, the voting being as follows:

For:

3-20

Presentation - Agriculture and Investment Services, Ministry for Primary Industries

Messrs Andrew Clark and Blair Jamieson made a presentation updating the Committee on Ministry for Primary Industries (MPI) activity in the region.

MPI’s focus was on encouraging provincial growth and developing and supporting rural innovations. This was achieved by promoting and advocating for the needs of primary industry, assessing and supporting grant proposals and/or loans and building effective partnerships with government agencies and industry.

Supporting Māori agribusiness was a priority for MPI. With more land being returned to Māori, MPI was providing assistance in deciding on the best use of the land. Māori business teams were facilitating Māori in getting products to market and producing feasibility studies and business cases. Some Māori land blocks are too small to be productive on their own, so a collective approach was being used to group several blocks together to make them financially viable. In the next few years, the biggest investment in agriculture would be from iwi.

Work was also being done to plant one billion trees on unproductive land. Although there had been criticism of the scheme when planting had occurred on productive soil, this was an exception and most trees were planted on unproductive hill country land. MPI worked with unsuccessful applicants to strengthen their applications.

MPI also focused on building skills, encouraging people to attend agri-based training courses and supporting the development of agri-technologies, eg. the rural-lab think-tank at Massey University was developing digital technology to make agricultural systems more efficient.

Moved Tangi Utikere, seconded Leonie Hapeta.

The COMMITTEE RESOLVED

1. That the Economic Development Committee receive the presentation for information.

Clause 3-20 above was carried 13 votes to 0, the voting being as follows:

For:

4-20

Presentation - Central Economic Development Agency

Ms Christine Atkins (Talent Advisor) and Ms Linda Stewart (CEO) made a presentation updating the Committee on recent work done by Central Economic Development Agency (CEDA).

CEDA’s goals were to develop talent in the city, attract talent into the city and retain talent in the city.

Palmerston North was facing a skills shortage in the construction industry and in filling middle management positions. CEDA was encouraging the development of skills in secondary schools and partnering with Immigration New Zealand to attract migrants to Palmerston North.

The pilot programme Next Step which promotes local organisations to skilled migrants had been successful at promoting Palmerston North as a place to live and work. The pilot runs for nine months and tracks people who register, interact with businesses and apply for jobs.

CEDA had developed an educational resource to promote what school was like in New Zealand to international students, with a view to encouraging more international students to study in Palmerston North.

The Careers Expo would be held in May, which would be an opportunity to showcase the industries and businesses in Palmerston North and the Manawatū.

Moved Tangi Utikere, seconded Leonie Hapeta.

The COMMITTEE RESOLVED

1. That the Economic Development Committee receive the presentation for information.

Clause 4-20 above was carried 13 votes to 0, the voting being as follows:

For:

5-20

Summary report on the December 2019 Palmerston North Quarterly Economic Monitor, 2019 Annual Employment Report for the Manawatū region, Major Developments and Quarterly Retail Report for January 2020

Memorandum, presented by Peter Crawford, Economic Policy Advisor and Linda Stewart, CEO, CEDA.

Councillor Zulfiqar Butt left the meeting at 10.39am

Moved Leonie Hapeta, seconded Vaughan Dennison.

The COMMITTEE RESOLVED

1. That the Summary report on the December 2019 Palmerston North Quarterly Economic Monitor, 2019 Annual Employment Report for the Manawatū region, Major Developments, and Quarterly Retail Report for January 2020, be received.

Clause 5-20 above was carried 12 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Brent Barrett, Susan Baty, Vaughan Dennison, Renee Dingwall, Patrick Handcock ONZM, Leonie Hapeta, Lorna Johnson, Bruno Petrenas, Aleisha Rutherford, Tangi Utikere and Mr Ruma Karaitiana.

The meeting adjourned at 10.51am.

The meeting resumed at 11.08am.

Councillor Lew Findlay QSM was present when the meeting resumed.

6-20

Manawatū Region Retail Health Check (2019) Report

Memorandum, presented by Peter Crawford, Economic Policy Advisor and Linda Stewart, CEO, CEDA.

Moved Patrick Handcock ONZM, seconded Leonie Hapeta.

The COMMITTEE RESOLVED

1. That the Manawatū Region Retail Health Check (2019) and Manawatū Region Retail Health Check Executive Summary (2019) be received.

2. That the Chief Executive be instructed to identify and report on other retail zones within the Central Business District.

Clause 6-20 above was carried 13 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Brent Barrett, Susan Baty, Vaughan Dennison, Renee Dingwall, Lew Findlay QSM, Patrick Handcock ONZM, Leonie Hapeta, Lorna Johnson, Bruno Petrenas, Aleisha Rutherford, Tangi Utikere and Mr Ruma Karaitiana.

7-20

Timetable for Updating Sector Profiles

Memorandum, presented by Julie Macdonald, Strategy & Policy Manager.

During discussion Elected Members acknowledged the timetable was a good starting point, but felt that it needed to be confirmed and endorsed prior to publication.

Moved Tangi Utikere, seconded Leonie Hapeta.

The COMMITTEE RESOLVED

1. That the timetable for updating sector profiles be received as outlined on page 124 of the Economic Development Committee Agenda dated 11 March 2020 be confirmed.

2. That all sector profiles be subject to the Economic Development Committee’s endorsement prior to publication, and that the work schedule be updated to reflect this.

Clause 7-20 above was carried 13 votes to 0, the voting being as follows:

For:

8-20

International Relations 6-monthly update

Memorandum, presented by Toni Grace, International Relations Manager.

Councillor Zulfiqar Butt entered the meeting at 11.46am

Moved Susan Baty, seconded Leonie Hapeta.

The COMMITTEE RESOLVED

1. That the Committee notes the progress of International Relations activity over the past six months, contributing to the International Relations Plan and Economic Development Strategy.

Clause 8-20 above was carried 14 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Brent Barrett, Susan Baty, Zulfiqar Butt, Vaughan Dennison, Renee Dingwall, Lew Findlay QSM, Patrick Handcock ONZM, Leonie Hapeta, Lorna Johnson, Bruno Petrenas, Aleisha Rutherford, Tangi Utikere and Mr Ruma Karaitiana.

9-20

Housing Portfolio Update (February 2020)

Memorandum, presented by Councillor Susan Baty.

After discussion Elected Members agreed that financial modelling should be undertaken regarding the possibility of retaining one third of sections at Whakarongo for public rental housing at market rates, in view of the current housing shortage.

The meeting adjourned at 12.01pm.

The meeting resumed at 1.09pm.

When the meeting resumed Mr Ruma Karaitiana was not present.

Moved Susan Baty, seconded Lorna Johnson.

The COMMITTEE RESOLVED

1. That the Housing Portfolio update report for February 2020 be received for information.

2. That the Chief Executive be instructed to undertake financial modelling on the possibility of retaining one third of sections at Whakarongo for public rental housing at market rates and reported back to the May 2020 Finance & Audit Committee meeting.

Clause 9-20 above was carried 13 votes to 0, the voting being as follows:

For:

10-20

Committee Work Schedule

After discussion Elected Members agreed to the additions to the Work Schedule.

Moved Tangi Utikere, seconded Leonie Hapeta.

The COMMITTEE RESOLVED

1. That the Economic Development Committee receive its Work Schedule dated March 2020, with the following additions:

      -     June 2020            CEDA Projects/Activities Report
-     June 2020            Portfolio Update – Inner City/CBD
-     June 2020            Sector Profiles Timetable
-     October 2020      Portfolio Update – Science, Technology &                                               Innovation
-     December 2020   Portfolio Update – Defence
-     December 2020   Portfolio Update – Education & Students

Clause 10-20 above was carried 13 votes to 0, the voting being as follows:

For:

The meeting finished at 1.19pm

Confirmed 3 June 2020

Chairperson

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Economic Development Committee

MEETING DATE: 3 June 2020

TITLE: Summary report on the March 2020 Palmerston North Quarterly Economic Monitor, Major Developments, and Quarterly Retail Report for April 2020

Presented By: Peter Crawford, Economic Policy Advisor and Linda Stewart, CEO, CEDA

APPROVED BY: Sheryl Bryant, General Manager - Strategy & Planning

RECOMMENDATION(S) TO Economic Development Committee

1. That the summary report on the March 2020 Palmerston North Quarterly Economic Monitor, Major Developments, and Quarterly Retail Report for April 2020 are received.

1.1 This memorandum presents a summary of:

a. the key themes in the latest Palmerston North Quarterly Economic Monitor for the March 2020 quarter;

b. the outlook for major construction projects in the region; and

c. the latest CEDA retail report for the three months ended January 2020.

1.2 The latest Palmerston North Quarterly Economic Monitor report indicates weaker GDP growth in the city in the year ended March 2020 due to the impacts of Covid-19 restrictions in March. The additional lead day in February provided a slight offset to the estimated decline.

1.3 It is important to note that Infometrics uses production-based GDP for reporting economic growth. Alternatives for measuring economic activity are income-based and expenditure-based GDP measures. Quarterly income-based GDP is not produced by Statistics New Zealand but would show a smaller decline in GDP in New Zealand during the Covid-19 Level-3 and Level-4 restrictions. Many organisations were not able to operate during the Level-4 restrictions but were still paying salaries and wages to their employees, so the decline in income during this period was smaller than the decline in production.

1.4 Infometrics is forecasting an 8.4% decline in Palmerston North employment in the year to March 2021 and a 9.8% decline for New Zealand. Treasury forecasts in the Budget on 14 May suggest a smaller decline, forecasting a 1.0% decline in national employment in the year to June 2020 and a further decline of 2.4% in the year to June 2021. The Treasury forecasts appear to be more realistic, with increased government spending and Reserve Bank stimulus offsetting some of the negative impacts expected from Covid-19 restrictions.

1.5 There are challenges with forecasting the impact of the coronavirus outbreak due to uncertainty over how long New Zealand will remain under Level-2 restrictions and difficulty in estimating the productivity impacts of the restrictions applied under Levels 1 and 2. However, it is likely there will be less impact on the city than the overall trend for New Zealand because:

a. Palmerston North has a high share of government employment in the city. In February 2019, 29.9% of jobs in the city were in central and local government entities, while there was a 19.9% share for New Zealand. Earnings data for the year ended March 2018 showed 37.9% of salaries and wages paid in the city came from these central and local government entities.

b. the primary sector is performing well, with the lower New Zealand dollar helping to offset some weakness in international commodity prices.

c. Palmerston North has a low share of international visitor spending and a low share of domestic accommodation spending, due to the high proportion of visitors to the region who stay with friends and family. We also have high share of visitor expenditure coming from day visitors because of our central location.

d. strong growth is occurring in building consents, which will be important in driving economic growth during the remainder of 2020 and may contribute to increased movement of people into the region for work from regions where construction activity has slowed.

1.6 Retail spending in the city was impacted significantly due to the domestic travel restriction applied during Levels-3 and 4. Data recently purchased by the Council shows that 46% of retail spending in the city’s central business district (CBD) usually comes from non-residents. Marketview has been providing weekly retail data since late March, which will be useful for monitoring the improvement in economic activity under Level-2.

1.7 It is difficult to assess what impact there will be on population growth from the recent short-term from the surge in net overseas migration, which has been caused by an increase in the number of New Zealanders returning from overseas. Net overseas migration for New Zealand increased from 49,573 people in the year to March 2019 to 71,456 in the year to March 2020, the highest annual net migration gain recorded. There is an 18-month delay in the publication of local authority net migration data.

1.8 There was a 24% increase in the number of people in the city registered for the job seeker benefit in April (from April 2019), which was significantly weaker than the 41% increase in national job seeker numbers. It has been reported that some of the growth in national job seeker benefits has been due to the increase in New Zealanders returning from overseas.

2. palmerston North quarterly economic monitor – march 2020

2.1 Estimated annual gross domestic product (GDP) growth in Palmerston North was 1.3% in the year ended March 2020, compared with an increase of 3.3% in the year to March 2019. New Zealand GDP is estimated to have increased by 1.7% in the year to March 2020.

2.2 Annual salaries and wages paid in Palmerston North in the year ended March 2019 were $2,723 million, increasing by 7.1% from the previous year, while earnings for New Zealand increased by 6.2%.

2.3 Total filled jobs in Palmerston North were 47,540 in the March 2019 quarter, increasing by 0.8% from the previous year, while filled jobs for New Zealand increased by 2.4%. There was a 4.6% increase in jobs in the city in the year to March 2018, when several large projects were getting underway.

2.4 Annual median salaries and wages paid in Palmerston North in the year ended March 2019 were $52,130, increasing by 4.7% from the previous year, while median salaries and wages for New Zealand were $53,770, increasing by 4.2% from the previous year.

2.5 The average quarterly worker turnover rate in Palmerston North in the year ended March 2019 was 14.6%, declining from 14.8% in the year to March 2018, while the average worker turnover rate for New Zealand was 16.3%, declining from 16.7% in the previous year.

2.6 Electronic card retail spending in Palmerston North in the March quarter was $287 million, an increase of 0.8% from the March 2019 quarter, while national growth was 1.0%.

a. Annual electronic card retail spending in Palmerston North for the year ended March 2020 was $1,210 million, an increase of 2.1% from 2019. This compares with an increase of 2.3% for New Zealand.

2.7 The total value of building consents issued in Palmerston North in the March 2020 quarter was $84 million, compared with $48 million in the March 2019 quarter, an increase of 76%. National consent values declined by 7%.

a. Building consents to the value of $279 million were issued in Palmerston North in the year to March 2020, an increase of 11% from the previous year. National consent values increased by 5% over the year to March 2020.

b. Consents for 115 new residential dwellings were issued in Palmerston North in the March 2020 quarter, compared with 95 in the March 2019 quarter, an increase of 21%. National consents were unchanged from 2020.

c. Consents for 464 new residential dwellings were issued in Palmerston North in the year ended March 2020, compared with 427 in the previous year, an increase of 9%. National consents also increased by 9%.

d. Non-residential consents to the value of $107 million were issued in Palmerston North during the year to March 2020, an increase of 15% from the previous year. National consents declined by 1% over the same period.

2.8 The average value of dwellings in Palmerston North was $504,229 in the three months ended March 2020, an increase of 15.7% from the March 2019 quarter. The average value for New Zealand was $728,276, an increase of 6.1%.

2.9 Car registrations in Palmerston North declined by 13.1% in the year ended March 2020 (national registrations declined by 11.5%) while the number of commercial vehicles registered declined by 6.0% (compared to a national decline of 12.8%).

2.10 It is estimated the annual average unemployment rate in Palmerston North in the year ended March 2020 was 4.5%, which was above the unemployment rate of 4.1% for New Zealand.

2.11 The number of people in Palmerston North registered for the MSD Job Seekers benefit increased by 1.9% in March 2020 from March 2019, while the number in New Zealand increased by 15.2%. The MSD benefit numbers reported in the Infometrics report are based on the average of the last four quarters.

2.12 Traffic flows in Palmerston North in the year to March 2020 declined by 0.4% from 2018, while there was a decline of 0.2% for New Zealand.

2.13 Tourism spending in Palmerston North was $433 million in the year ended March 2020, increasing by 1.2% from the previous year. New Zealand tourism spending increased by 1.4%.

a. Domestic visitor spending in Palmerston North was $359 million in the year ended March 2020, declining by 0.4% from the previous year (with a 0.4% increase for New Zealand). Spending in the city increased strongly during January and February but declined by $13 million in March compared with March 2019. Major events cancelled during the month included the Field Days and national secondary schools’ volleyball tournament.

b. International visitor spending in Palmerston North was $74 million in the year ended March 2020, increasing by 10.0% from the previous year (2.9% increase for New Zealand). Spending in the city increased slightly between February and March due to growth in spending from visitors from the United States. The biggest decline in spending was from the rest of Europe (other than the UK and Germany).

2.14 Population estimates, based on primary health organisation registrations, suggest Palmerston North’s population increased by 3.6% between March 2019 and March 2020 (with a 3.0% increase for New Zealand overall).

2.15 The Palmerston North Quarterly Economic Monitor report for the March 2020 quarter is attached.

3. major developments

3.1 Major development and construction projects announced for Palmerston North and the Manawatū region amount to at least $3.0 - $3.5 billion of construction activity to 2030. Projects which have been updated or added since the last report in March include:

a. Updated investment plan for 2020-2030 for Massey University. The 2016 – 2026 plan signalled investment of $186 million, while the new plan signals investment of $230 million.

b. Updated investment data for MidCentral DHB. The new acute services block is now budgeted to cost $370 million, an increase from the original $197 million estimate.

c. A consent was lodged in March for the construction of the new $66 million Countdown distribution centre.

3.2 A summary of major developments in the Manawatū region is attached.

4. manawatŪ region quarterly electronic card retail report for april 2020

4.1 The latest CEDA quarterly retail report for the three months ended April 2020 shows an 18.6% decline in electronic card retail spending in the Manawatū region, while New Zealand retail spending declined by 18.3% over the same period.

4.2 Spending by residents at Manawatū region retailers declined by 13.0% in the three months ended April 2020, while spending by residents in other regions declined by 29.2%. There was a 31.7% decline in domestic visitor spending in the region, with visitor spending from the rest of the Horizons region declining by 38.2%, and visitor spending from the rest of New Zealand declining by 29.7%. International visitor spending increased by 29.7% but contributed just $4.9 million out of total spending of $277 million in the quarter.

4.3 Retail precinct data shows a 52% decline in spending in Broadway, while there was a decline of 23% in the rest of the Palmerston North CBD. Total spending in Palmerston North declined by 19.2%, while spending in spending in Manawatū District declined by 8.9%.

4.4 Food retailing, which accounted for 45% of spending in the quarter, recorded an increase of 17% in spending compared with the same period last year, while all other store types recorded declines, ranging from 20.8% for appliances to 50.8% for apparel retailers.

4.5 Manawatū region residents spent $36.5 million online in the three months ended April 2020, accounting for 12.1% of total electronic card spending by residents in the region. This remains below the 15.5% online share for all New Zealand residents. Manawatū region resident online spending increased by 29.8% in the three months ended April while national growth was 15.0%.

4.6 The Manawatū Region Electronic Card Quarterly Retail Report is attached.

5. Compliance and administration

Does the Committee have delegated authority to decide?		Yes
Are the decisions significant?		No
If they are significant do they affect land or a body of water?		No
Can this decision only be made through a 10 Year Plan?		No
Does this decision require consultation through the Special Consultative procedure?		No
Is there funding in the current Annual Plan for these actions?		Yes
Are the recommendations inconsistent with any of Council’s policies or plans?		No
The recommendations contribute to Goal 1: An Innovative and Growing City
The recommendations contribute to the outcomes of the Economic Development Strategy
The recommendations contribute to the achievement of action/actions in the Economic Development Plan The action is: Attract investment expansion and new businesses
Contribution to strategic direction and to social, economic, environmental and cultural well-being	Reporting on economic trends in the city and Manawatū region, and the longer-term outlook for growth, is important for encouraging local businesses to invest in growing their business and attracting new businesses to the city.

Attachments

1.	Palmerston North City Quarterly Economic Monitor Report - March 2020 ⇩
2.	Major Developments ⇩
3.	Manawatu Quarterly Electronic Card Retail Report for April 2020 ⇩

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Economic Development Committee

MEETING DATE: 3 June 2020

TITLE: Business Improvement District Policy

Presented By: David Murphy, City Planning Manager

APPROVED BY: Sheryl Bryant, General Manager - Strategy & Planning

RECOMMENDATION(S) TO Council

1. That the Business Improvement District Policy (2020), as attached to the memorandum reported to the 3 June 2020 Economic Development Committee titled “Business Improvement District Policy”, be received.

2. That the Business Improvement District Policy (2020) as attached to the memorandum reported to the 3 June 2020 Economic Development Committee be adopted.

3. That the Mayor and Chairperson of the Economic Development Committee be authorised to make minor amendments to the Business Improvement District Policy (2020), as attached to the memorandum reported to the 3 June 2020 Economic Development Committee titled “Business Improvement District Policy”, prior to a Business Improvement District proponent putting forward a proposal to Council under the Business Improvement District Policy (2020).

1. ISSUE

1.1 There are opportunities for greater collaboration and organising power within the business community to contribute to the growth, development, and sense of place of the city centre. Projects such as Streets for People, Palmy Unleashed and placemaking partnerships have shown the value of business-city relationships.

1.2 Unlike most cities in New Zealand, Palmerston North does not have a self-governed local economic initiative dedicated to specific business districts, e.g. the city centre. Palmerston North previously had a City Centre Marketing group, however a membership-based scheme and little integration with Council strategic direction led to an insufficiently-resourced group without adequate collaboration with Council activities.

1.3 Business Improvement Districts (BID) have been found globally to enhance the way that business districts strategically position themselves for economic and social development.

2. BACKGROUND

2.1 Council has sought to actively encourage self-organisation within the city centre business community since 2017, prompted by the now superseded Vibrant City Centre Plan. This Plan was developed with Peter Smith of Place Governance Partners and produced programme outcomes such as Palmy Unleashed.

2.2 City centre engagement has been ad-hoc to date, often established on an ‘as needs’ basis depending on the engagement requirements of individual programmes and projects. In recent history, coordination efforts between businesses have mainly focused around single-issue concerns regarding carparking and landscaping.

2.3 Individual engagements and partnerships with businesses remain effective, for instance maximising public space for business use in streetscape design, or the activation and co-creation of business initiatives to enhance the uniqueness of that public space. Higher-level strategic collaboration across precincts in the city centre has however been difficult to maintain on the side of both Council and the business community.

2.4 Within the business ecosystem (Figure 1, Attachment 1), there are a number of economic development agencies with an interest, but not a distinct responsibility for local precincts such as the city centre. This means that their ability to influence and drive specific initiatives in these areas is limited.

2.5 Compared to the individual and ad-hoc engagement experienced in Palmerston North, other city centres can collaborate with a business association or BIDs to advocate for better-informed decision-making on strategy and capital programmes, and better align expectations and delivery for levels of service. Likewise, BIDs are an international standard for self-governing city centre communities. BIDs operate with their own strategic plan, board of directors, relationship manager/s, and their own resourcing to implement projects and programmes for the wellbeing of their trading environment.

2.6 The following extracts from the City Centre Plan 2018 highlight Council’s strategic intent to explore the use of BIDs to support trading environments in Palmerston North:

“Council needs to work with city centre stakeholders to establish a business association that will use marketing, events and management to promote and reinforce community attachment and place-identity in other locations within the city centre. In other cities, Business Improvement Districts (BIDs) are formed to drive this activity. This approach needs to be considered in Palmerston North.”

Where we are now…

“• There is a lack of coordination and leadership by city centre stakeholders.

• There is no city centre business association.

• There is no business improvement district(s) (BID).”

Where we want to be…

“• There is a strong business association which supports the establishment of a self-funded business improvement district (BID).”

New ongoing actions to achieve this purpose…

”• Facilitate the formation of a business association and supporting contacts register for the city centre business community.

• Formulate a self-funded business improvement district (BID).”

2.7 BIDs require a targeted rate to be applied to a geographic area to be their main source of income. The targeted rate can be viewed by BID members as part of their marketing budget that delivers projects that reinforce the identity and non-price competition to attract customers to shop local. As such, a BID Policy is necessary in order to guide how rating mechanisms are to be used for the purposes of a business community.

2.8 The Long-Term Plan and an additional resolution of Council allocated funding to assist with expenses incurred to develop a BID proposal and support communications for a city centre BID. These are detailed at paragraph 2.9 and 2.10 below.

2.9 Long Term Plan (2018-28) Programme 1471 - Formation of City Centre Business Association:

“Seed funding for formation of city centre business association and development of city centre contacts register.”

2.10 Resolution in the Council Meeting of 23/09/2019:

“1. That $48,000 of unbudgeted expenditure be authorised to progress the Proposed City Centre Business Improvement District.

2. That it be noted that the Chief Executive will seek to absorb the $48,000 of unbudgeted expenditure to progress the Proposed City Centre Business Improvement District within existing Strategy and Planning budgets.”

2.11 The BID Policy has been drafted with the entire city in mind, so that if BID proponents were to propose a BID structure for a village or suburban trading environment, then the policy can provide for that opportunity.

2.12 The Draft BID Policy has been informed by the following BID Policies, in addition to the BID Playbook developed for Palmerston North:

· Wellington BID Policy.

· Auckland BID Policy.

· Hastings BID Policy.

· Christchurch BID Policy.

· Hamilton BID Policy.

3. Outline of community engagement

3.1 Community engagement has included:

· July 2017: Vibrant City Centre Presentations in the Palmerston North Conference and Function Centre and Downtown Cinemas.

· June 2017: BID research and ‘Playbook’ developed for Palmerston North. Manawatū Chamber of Commerce interviewed as part of this research.

· March-April 2018: Consultation on the City Centre Plan via Long-Term Plan consultation.

· June 2018: BID presentation to the city centre business community and expressions of interest for BID Leadership Group, Palmerston North Conference and Function Centre.

· November 2018: BID presentation to the city centre business community, Downtown Shopping Centre.

· March 2019: City centre leadership group strategy workshop, Palmerston North Conference and Function Centre.

· February 2020: Draft BID Policy consultation with BID Leadership Group, Downtown Shopping Centre.

3.2 Ongoing engagements:

· Temporary BID relationship manager contracted from August 2018 to engage all businesses in the city centre about BID concepts and city centre collaboration

· BID representatives involved in a Streetscape Design Sub-Committee to inform the way that the Streets for People Programme is delivered.

· BID Leadership Group meeting on a regular basis to discuss common issues and opportunities in the city centre.

· Engagement with Manawatū Chamber of Commerce and BID Leadership Group Chair to provide input into BID constitution and communications.

3.3 Future engagement touchpoints in the BID process:

· Bid establishment poll – minimum of 25% voter turnout, with a greater than 50% majority vote in favour of establishing a bid.

· Council’s Long Term Plan Consultation regarding any targeted rate that the BID Association applies for.

4. NEXT STEPS

4.1 Enable Palmy BID proposal to explore a city centre BID with their community by providing targeted rate options and completing a comprehensive voting register for the bid proponent to progress consultation and voting on a city centre BID.

4.2 Engage an independent election consultant to run a BID establishment poll once the BID proponent had run full consultation.

4.3 If BID establishment is successful, a targeted rate on the BID area would be included in the Draft Long-Term Plan to resource the delivery of the BID Association’s strategic plan and be subject to the Long Term Plan consultation process.

5. Compliance and administration

Does the Committee have delegated authority to decide?		No
Are the decisions significant?		No
If they are significant do they affect land or a body of water?		No
Can this decision only be made through a 10 Year Plan?		No
Does this decision require consultation through the Special Consultative procedure?		No
Is there funding in the current Annual Plan for these actions?		Yes
Are the recommendations inconsistent with any of Council’s policies or plans?		No
The recommendations contribute to Goal 2: A Creative and Exciting City
The recommendations contribute to the outcomes of the Creative and Liveable Strategy
The recommendations contribute to the achievement of action/actions in the City Centre Plan The action is: “Formulate a self-funded business improvement district (BID).”
Contribution to strategic direction and to social, economic, environmental and cultural well-being	A BID Policy provides the process and communicates expectations to prospective business communities wishing to increase the social, economic, environmental, and cultural wellbeing of their precincts.

Attachments

Business Improvement District Policy 2020 ⇩

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Economic Development Committee

MEETING DATE: 3 June 2020

TITLE: Inner City/CBD Portfolio Update (May)

Presented By: Councillor Leonie Hapeta

APPROVED BY: Sheryl Bryant, General Manager - Strategy & Planning

RECOMMENDATION(S) TO Economic Development Committee

1. That the Inner City/CBD Portfolio update report for May 2020 be received for information.

1. ISSUE

The Inner City/CBD portfolio is reporting to the Economic Development Committee for May 2020.

2. BACKGROUND

The Inner City/CBD portfolio members are encouraged to continue to update their goals and activities throughout the year.

3. Compliance and administration

Does the Committee have delegated authority to decide?		Yes
Are the decisions significant?		No
If they are significant do they affect land or a body of water?		No
Can this decision only be made through a 10 Year Plan?		No
Does this decision require consultation through the Special Consultative procedure?		No
Is there funding in the current Annual Plan for these actions?		No
Are the recommendations inconsistent with any of Council’s policies or plans?		No
The recommendations contribute to Goal 3: A Connected and Safe Community
The recommendations contribute to the outcomes of the Connected Community Strategy
Contribution to strategic direction and to social, economic, environmental and cultural well-being	Active Citizenship Plan – the portfolios provide an opportunity for Elected Members to report on their engagement with organisations in their sector.

Attachments

Inner City/CBD Portfolio Update_May 2020 ⇩

Tangi Utikere (Chairperson)
Leonie Hapeta (Deputy Chairperson)
Grant Smith (The Mayor)
Brent Barrett	Lew Findlay QSM
Susan Baty	Patrick Handcock ONZM
Rachel Bowen	Ruma Karaitiana
Zulfiqar Butt	Bruno Petrenas
Vaughan Dennison	Aleisha Rutherford
Renee Dingwall