Tauranga ratepayers are likely to be forced into making a $44,000 contribution to a community housing project after the council was "boxed into a corner" by TECT.
The Tauranga Community Housing Trust's planned redevelopment of a former council pensioner village in Clarke St relied on a $200,000 donation by TECT to complete the $850,000 purchase price from the council. However, a condition of TECT's donation was that the trust obtained the council's agreement to halve the consent and development fees.
The deal between TECT and the trust came to a head this week when the council agreed to grant the $44,000, but only after TECT had reconfirmed its condition that the council halved its fees.
The trust intends to build 14 new units on the 2500sq m site for people on low incomes with serious housing needs.
Deputy mayor David Stewart said he reluctantly supported it because if someone did not pay their fair share of fees then someone else had to make up the difference.
"Unfortunately we have been boxed into a corner by TECT on the way they have put it to us ... it needs to be cleared up for the future."
The council agreed to "establish protocols" with TECT on future funding applications where conditions like this were attached.
Councillor Stewart said a ratepayer contribution was justified because the community housing development was good for Tauranga. Councillor Terry Molloy said there was no coercion and it was a straightforward partnership with TECT.
Councillor Murray Guy said he had huge issues with the condition on TECT's donation, saying it was "cheque book manipulation of ratepayer resources".
Mayor Stuart Crosby pounced on the comment, saying it suggested that something inappropriate had happened. "That is demeaning of TECT and others."
He said the trust had agreed to purchase the site at the market value and had made it clear that it would come back to the council asking for help. "There was no stealth here, no one should be surprised."
Councillor Rick Curach argued the council had been put into a very difficult situation and he successfully called on TECT to reconfirm its condition that the trust obtained a 50 per cent reduction in council fees.
Councillor Larry Baldock said it was a win-win situation for the trust and the council. The council was able to flog off its land and put the proceeds into upgrading its elder housing, and the property continued to be used for community housing.
Council property services manager Anthony Averill told the council last June the property's rating valuation was $1 million.
The trust accepted TECT's conditional offer last October, with the terms and conditions needing to be confirmed by October 31 this year.
The council's $44,000 grant would be funded from the $3.7 million surplus in its rating account.