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IN THE MATTER of the Resource Management Act 1991

AND

IN THE MATTER of Proposed Plan Change 2 to the

Hamilton City District Plan – Te Awa Lakes

Private Plan Change

STATEMENT OF EVIDENCE OF MARK CHRISP ON BEHALF OF

FONTERRA LIMITED

PLANNING

1. INTRODUCTION

1.1 My name is Mark Chrisp. I am a Director and a Principal Environmental

Planner in the Hamilton Office of Mitchell Daysh Ltd, a company which

commenced operations on 1 October 2016 following a merger of Mitchell

Partnerships Ltd and Environmental Management Services Ltd (of which I was

a founding Director when the company was established in 1994 and remained

so until the merger in 2016). I am currently serving as the Chairman of the

Board of Mitchell Daysh Ltd.

1.2 In addition to my professional practice, I am an Honorary Lecturer in the

Department of Geography, Tourism and Environmental Planning at the

University of Waikato. I am also the Chairman of the Environmental Planning

Advisory Board at the University of Waikato, which assists the Environmental

Planning Programme in the Faculty of Arts and Social Sciences in

understanding the educational, professional and research needs of planners.

1.3 I have a Master of Social Sciences degree in Resources and Environmental

Planning from the University of Waikato (conferred in 1990) and have 30 years'

experience as a Resource Management Planning Consultant.

1.4 I am a member of the New Zealand Planning Institute, the New Zealand

Geothermal Association, and the Resource Management Law Association.

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1.5 I am a Certified Commissioner under the Ministry for the Environment's 'Making

Good Decisions' course.

1.6 I have appeared as an Expert Planning Witness in numerous Council and

Environment Court hearings, as well as several Boards of Inquiry (most

recently as the Expert Planning Witness for the Hawke's Bay Regional

Investment Company Ltd's proposed Ruataniwha Water Storage Scheme).

1.7 I have undertaken a substantial amount of work within the dairy sector working

for New Zealand Dairy Group and then Fonterra Ltd ("Fonterra") over the last

25 years. Over that time, I have undertaken planning work in relation to all of

Fonterra's dairy manufacturing sites in the Northland, Auckland, Waikato and

Bay of Plenty regions. This has included re-consenting existing dairy

manufacturing operations and / or associated spray irrigation of wastewater

(e.g. the Hautapu and Edgecumbe sites) and major capacity expansion

projects.

1.8 I have assisted Fonterra in resource management matters relating to the Te

Rapa Dairy Factory over the last 25 years. This has included:

(a) project managing and being the principal author of the resource

consent applications and the Assessments of Environmental Effects

("AEE"), for the Te Rapa Capacity Expansion and Co-generation

Plant Project in 1996 – 1997. This project included the cream cheese

plant, the largest drier on the site, a dry-store extension, the grade

separated interchange, the wastewater treatment plant, and the co-

generation plant (owned and operated by Contact Energy Ltd

("Contact Energy"));

(b) developing the Mangaharakeke Pa Site Management Plan (the Pa

site is located in the north eastern part of the Te Rapa Dairy Factory

Site);

(c) extensive involvement in the hearing, submission and appeal

processes relating to the preparation of the operative Waikato District

Plan (which formed the basis of the planning provisions for the Te

Rapa North area now included in the Hamilton City District Plan – the

preparation of which I was also involved in on behalf of Fonterra);

(d) preparation of resource consent applications for the upgrade to the

water intake structure;

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(e) assistance with the development of the Te Awa River Ride as it

passes through the Te Rapa Dairy Factory site; and

(f) I am currently assisting Fonterra in relation to its resource consent

applications to Waikato Regional Council for the on-going operation

of the Te Rapa Dairy Factory (i.e. water take, and discharges to land,

air and water).

1.9 I have had extensive experience assisting operators of large-scale industrial

activities and / or energy infrastructure seeking to avoid the creation of reverse

sensitivity effects. This includes work undertaken for Fonterra in relation to its

dairy manufacturing sites and work undertaken for Contact Energy in relation

to its geothermal power stations and associated steamfield activities (including

24 / 7 drilling activities and steam venting) in the Central North Island.

1.10 I was a co-author of the Horotiu Industrial Study (which included the Te Rapa

North area) prepared for Waikato District Council in July 2004 as part of the

preparation of the (now operative) Waikato District Plan.

Code of Conduct

1.11 I confirm that I have read the Code of Conduct for Expert Witnesses 2014

contained in the Environment Court Practice Note and I agree to comply with

it. My qualifications as an expert are set out above. I confirm that the issues

addressed in this brief of evidence are within my area of expertise, except

where I state that I am relying on what I have been told by another person. I

have not omitted to consider material facts known to me that might alter or

detract from the opinions expressed.

Involvement in the Te Awa Lakes Proposal

1.12 I have assisted Fonterra on the planning aspects associated with the Te Awa

Lakes proposal from its inception. This has included discussions with Perry

Group in relation to the original plan change, the Special Housing Area ("SHA")

applications, the preparation of Fonterra's submission on Proposed Plan

Change 2 to the Hamilton City District Plan – Te Awa Lakes Plan Change

("Plan Change 2"), and expert caucusing in advance of this hearing.

Scope of Evidence

1.13 This statement of evidence will:

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(a) provide a brief summary of the development history in the Horotiu /

Te Rapa North area including the establishment of Fonterra's Te

Rapa Dairy Factory;

(b) summarise the planning history and the current planning regime

relating to the Horotiu / Te Rapa North area;

(c) provide an analysis of the Te Awa Lakes proposal in relation to the

relevant policy and planning documents prepared under the

Resource Management Act 1991 ("RMA");

(d) comment of the nature and scope of the analysis required under

section 32 of the RMA;

(e) discuss the position in relation to residential and industrial land

supply within Hamilton City;

(f) discuss the economic viability of industrial development on the

Hutchinson Road site and the timing of development in the Te Rapa

North area;

(g) discuss the nature and likelihood of reserve sensitivity effects arising

from the Te Awa Lakes proposal; and

(h) respond to matters raised in the section 42A report and the planning

evidence of Mr O'Dwyer and Mr Olliver.

1.14 Where appropriate and relevant, my evidence will reference and rely on the

evidence of other witnesses presenting evidence on behalf of Fonterra.

2. EXECUTIVE SUMMARY

2.1 The Te Awa Lakes proposal is located on a 62-hectare block of land bounded

by the State Highway 1 Waikato Expressway to the north-west, Te Rapa Road

to the west, the Waikato River to the east, and Hutchinson Road to the south.

The area is generally described as the Horotiu / Te Rapa North area. The Te

Awa Lakes proposal involves some tourism and commercial activities, but the

predominant land use proposed is the establishment of up to 1,100 residential

units.

2.2 My evidence sets out the lengthy development and planning history associated

with the Horotiu / Te Rapa North area which, apart from residential areas to

the south west of the Horotiu Freezing Works and in the vicinity of the Horotiu

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School, has been progressively planned and developed as an industrial area.

In the last 15 years, following the completion of the Horotiu Industrial Study,

that position has been reinforced by the identification of the Horotiu / Te Rapa

North area as a Strategic Industrial Zone in the Future Proof Strategy ("Future

Proof") and the Waikato Regional Policy Statement ("RPS"). Planning

provisions have also been included in the Waikato and Hamilton City District

Plans which provide for the ongoing development of industrial activities

(including large-scale industrial activities) and which seek to avoid the

establishment of incompatible land uses (including to avoid reverse sensitivity

effects).

2.3 Collectively, the planning provisions relating to the Horotiu / Te Rapa North

area have provided a level of planning certainty which has provided the

operators of industrial activities and the New Zealand Transport Agency

("NZTA") the confidence to invest significant sums of money in the area

(hundreds of millions of dollars). This includes:

(a) major capacity expansions and a co-generation power plant project

on the Te Rapa Dairy Factory site;

(b) the establishment of RX Plastics;

(c) the development of the Northgate Business Park;

(d) Open Country Dairies establishing adjacent to the Horotiu Freezing

Works;

(e) Ports of Auckland establishing a large inland port; and

(f) NZTA investing in the construction of the Te Rapa Bypass on the

basis of an agreed land use pattern in the Horotiu / Te Rapa North

area (being for industrial purposes).

2.4 In his evidence, Mr John Olliver (on behalf of Perry Group) has sought to

downplay or place little weight on aspects of the policy and planning regime

that militate against the approval of the Te Awa Lakes proposal, particularly

the aspects of Future Proof and the Waikato RPS which identify the Horotiu /

Te Rapa North area as a Strategic Industrial Node. This approach is typically

based on the age of the planning provisions in question (suggesting they are

out of date) or by way of a forensic analysis of opportunities for flexibility buried

in the detail of the planning provisions. As a general comment, I consider the

flexibility within these provisions is actually more to do with the timing of land

release to meet changes in demand rather than facilitating a radical departure

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from the agreed pattern of land use in the sub-region such as that represented

by the Te Awa Lakes proposal.

2.5 The age and longevity of the planning regime which has consistently provided

for large-scale industrial activities over many decades in the Horotiu / Te Rapa

North area (and also sought to exclude incompatible activities such as

residential land uses), and the significant level of private and public investment

that has occurred in reliance on that planning regime means that a significant

amount of weight should be placed on it in my opinion. The operators of large-

scale industrial activities in the Horotiu / Te Rapa North area, such as Fonterra,

Contact Energy, Affco, and Ports of Auckland (and the general community)

should be able to rely on the integrity of the planning regime that has been in

place for many years and that it will be upheld.

2.6 The Te Awa Lakes proposal involves the establishment of a large-scale urban

residential neighbourhood in an isolated location, distant from existing

communities and services. The location fundamentally conflicts with the

settlement pattern defined through Future Proof and the Waikato RPS. When

preparing or changing a district plan, section 73(4) of the RMA requires local

authorities "to give effect to a regional policy statement". In my opinion, the Te

Awa Lakes proposal is inconsistent with the policy directives in the Waikato

RPS relating to the built environment (being the most relevant aspects of the

Waikato RPS) and does not meet the criteria for alternative land release. On

that basis, it is my opinion that Plan Change 2 does not give effect to the

Waikato RPS.

2.7 The policy regime in the Hamilton City District Plan (most of which is not

proposed to be changed as part of Plan Change 2), seeks to ensure that

industrial land is used for industrial purposes and that incompatible activities

(such as residential land uses) do not occur in proximity to industrial activities

or within areas planned for future industrial activities.

2.8 The location of the Te Awa Lakes proposal is within an established heavy

industrial area defined as a Strategic Industrial Node. The proposal conflicts

with one of the most fundamental and well-established resource management

principles; that being the need for separation between incompatible activities

to manage the actual and potential effects (particularly amenity considerations)

between a sensitive activity (residential) and less sensitive activities

(industrial).

2.9 The s32 analysis associated with Plan Change 2 should include an

assessment of the costs in terms of the Te Awa Lakes proposal constraining,

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limiting or preventing further industrial development in the surrounding parts of

the Te Rapa North Strategic Industrial Node. The s32 analysis has not

provided an assessment of this nature. While I appreciate that reverse

sensitivity and the effects of it can be hard to quantity, for the s32 to provide

an accurate representation on the potential economic effects of the

development on established industrial activities, there should be an analysis of

the effects on Fonterra of not being able to expand its activities on the Te Rapa

Dairy Factory or having its operations constrained, and other land in the Te

Rapa North area not being able to be developed for industrial purposes due to

reverse sensitivity issues.

2.10 The Te Awa Lakes proposal is not necessary to meet the required level of

supply of residential land within Hamilton City (there is a more than adequate

level of supply in other planned locations). The amount of industrial land

supply referred to in various reports and evidence prepared in relation to Plan

Change 2 appears to be based on what is zoned, rather than what is actually

available to the market. From my recent experience dealing with a number of

clients, the actual supply of industrial land in Hamilton City (and elsewhere

such as Cambridge) is not sufficient to meet current demand, let alone future

demand.

2.11 It is my view that no account should be taken of the applicant's financial

challenges resulting from its sand mining operation being undertaken in a

manner that I consider to be non-compliant with its own consent conditions.

Furthermore, the applicant should not be able to use that situation to justify the

establishment of land uses which are incompatible with the surrounding

industrial environment and in doing so effectively benefit from their non-

compliance with the RMA.

2.12 Some of the evidence for the Perry Group states that the site is not feasible for

industrial development for up to a 15-year period and possibly longer. The

current planning regime in the Hamilton City District Plan identifies most of the

Hutchinson Road site as Deferred Industrial Zone, whereby (for reasons

explained in my evidence) half the site (32 hectares) is not programmed for

development until at least 2041 in any event.

2.13 If approved, the Te Awa Lakes proposal will change the nature of the existing

and planned physical environment from an industrial environment (recognised

as a Strategic Industrial Node) to a residential environment. With that change

will come higher expectations of amenity from the owners of residential units

compared with that of an industrial environment. That, in turn, will make it more

difficult and expensive for industrial activities to establish or expand in the

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surrounding area. In a worst-case situation, the presence of sensitive land

uses (e.g. residential units) could effectively foreclose the development of

industrial activities. The evidence of Ms Buckley confirms that Fonterra may

not invest further in any expansion of activities on the Te Rapa Dairy Factory

site if the Te Awa Lakes proposal is accepted and implemented.

2.14 While reverse sensitivity is difficult to quantify, the potential for reverse

sensitivity effects on existing industrial activities cannot be avoided or

appropriately mitigated and the potential for future industrial activities to be

developed will be compromised by the Te Awa Lakes proposal (an outcome

which is contrary to the policy imperatives in the relevant regional and district

planning instruments).

2.15 If Fonterra proposed to replicate Te Rapa Dairy Factory within 325 m of an

existing residential area in Hamilton City, I would expect there to be a

significant level of opposition from the owners of the nearby residential

properties (and with good reason). Furthermore, I would not consider such a

proposal to be credible or in any way sensible from a land use planning

perspective. Such a proposal would, in my opinion, be contrary to sound

resource management planning practice. The only difference in this scenario,

compared with the Te Awa Lakes proposal, is the order in which the two types

of incompatible activity become established, but the end result is exactly the

same – a large scale industrial activity and residential activities in close

proximity to one another. If it is not acceptable for Fonterra to replicate the Te

Rapa Dairy Factory on a site within 325 m of an existing residential area in

Hamilton City (which I am certain would be the case), then surely the

establishment of up to 1,100 residential units on a site within 325 m of the Te

Rapa Dairy Factory is an equally unacceptable outcome.

3. THE HOROTIU / TE RAPA NORTH AREA

3.1 My evidence refers extensively to the "Horotiu / Te Rapa North area", which is

the area bounded by Ruffell Road to the south (being the former boundary

between Hamilton City and Waikato District up until 2011), the Waikato River

to the north and east (as far north as the Ngaruawahia Golf Course), and as

far west as the area that is variously zoned for industrial purposes (the details

of which are set out later in my evidence). The State Highway 1 Te Rapa

Bypass ("Te Rapa Bypass") forms the western boundary of the part of the

Horotiu / Te Rapa North area within Hamilton City.

3.2 The Horotiu / Te Rapa North area has been the site of heavy industrial activities

for over 100 years. The Horotiu Freezing Works (located approximately 1 km

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north of the Te Awa Lakes site) opened in 1916 and the Te Rapa Dairy Factory

(located approximately 300 m to the south of the Te Awa Lakes site) opened

in 1967. Fonterra regards the Te Rapa Dairy Factory as its North Island

Flagship Site. Ports of Auckland is currently establishing its Waikato Freight

Hub (an Inland Port) adjoining the North Island Main Trunk Line within the

Northgate Business Park (on the opposite side of the Waikato Expressway to

the Te Awa Lakes site). Fonterra owns land to the west of Te Rapa Road,

which is intended for the development of additional dairy related industrial

activity.

The Establishment of the Te Rapa Dairy Factory

3.3 In 1964, the New Zealand Co-operative Dairy Company Ltd made an

application to the Waikato County Council to establish the Te Rapa Dairy

Factory (by way of a letter with a plan attached). The consent was granted

subject to three conditions, namely that the development proceed in

accordance with the plan submitted (note the '"singular"' plan), that access was

to be provided by way of a T-intersection to be formed with State Highway 1,

and that consultation regarding the design of the T-intersection was to be

undertaken with the National Roads Board.

3.4 The site selected was approximately half way between Hamilton and

Ngaruawahia (reflected in the name of the small hill to the south of the site

where Te Rapa Road cuts through it, being "Half Way Hill"). As can be seen

from the following aerial photograph (Figure 1), taken in 1971 not long after the

opening of the Te Rapa Dairy Factory, the land uses surrounding the site were

predominantly rural in nature (pastoral farming and a sand quarry on the

opposite side of Te Rapa Road – formerly State Highway 1) along with a very

low density of dwellings that were mostly associated with the rural activities

being undertaken.

3.5 As can also be seen from the aerial photograph below (Figure 1), the Te Rapa

Dairy Factory included a workers' village when it was first established. A

workers' village was required as the Factory was so far out of town that it was

considered too far for workers to commute to work.

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Figure 1: Aerial Photograph of the Te Rapa Dairy Factory and

Surrounding Land Uses in 1971

3.6 The Te Rapa Dairy Factory was commissioned in 1967 and underwent major

expansions in 1989 and again in the late 1990s. The site has continued to

periodically expand since the last major expansion in the late 1990s and, given

its strategic location, is likely to do so in future. The latest project involved the

addition of a small evaporator to the Cream Plant to allow for the production of

a new cream product. The availability of land on the site and its zoning

(wherein dairy processing is a permitted activity) make the Te Rapa Dairy

Factory a good option for future development of additional processing capacity.

Other factors, such as the proximity of the site to a large workforce, to State

Highway One, the Fonterra Crawford St stores, Ports of Auckland's Inland Port,

and the future Ruakura Inland Port, also make it an attractive option for further

development.

3.7 As elaborated upon in the evidence of Ms Buckley, today the Te Rapa Dairy

Factory:

(a) is the largest dairy manufacturing site in the Waikato Region in terms

of processing capacity and people employed;

(b) processes approximately 7.5 million litres per day of milk during the

peak of the dairy season;

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(c) produces about 250,000 tonnes of milk powder per annum from the

four milk powder dryers with a combined throughput of 42 tonnes per

hour, and 75,000 tonnes of cream products per annum from the

cream plant;

(d) employs approximately 500 staff (excluding tanker drivers and

contractors), with seasonal variations; and

(e) has a replacement capital value of approximately $869 million.

3.8 Having established the Te Rapa Dairy Factory in an appropriate location away

from sensitive land uses (apart from a small number of rural dwellings),

Fonterra and its predecessors have had to contend with successive planning

regimes and proposals that could or would give rise to the establishment of

incompatible land uses adjacent, or in close proximity, to the Te Rapa Dairy

Factory. This has included planning provisions that allow for rural residential

subdivision and development, as well as applications for a rural residential

farm park. Fonterra has had mixed success in avoiding the establishment of

incompatible land uses adjacent, or in close proximity, to the Te Rapa Dairy

Factory (e.g. there is a Country Living Zone on the opposite side of the Waikato

River).

3.9 Nevertheless, successive planning regimes (discussed in the next section of

my evidence) have consistently recognised the importance of the large-scale

industrial activities in the Horotiu / Te Rapa North area, and have included

planning provisions that seek to avoid (or at least do not provide) for the

establishment of incompatible sensitive land uses (e.g. residential activities).

3.10 The following aerial photograph (Figure 2) shows the Te Rapa Dairy Factory

and the Te Awa Lakes site located 325 m further north. It also shows the Rural

Residential area on the eastern side of the Waikato River and the SH1 Te

Rapa Bypass to the west.

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Figure 2: Te Rapa Dairy Factory and Te Awa Lakes Site

4. PLANNING AND REGULATORY HISTORY OF HOROTIU / TE RAPA

NORTH AREA

4.1 The industrial nature of activities within the Horotiu / Te Rapa North area

(including large-scale heavy industrial activities) has been recognised and

provided for in successive policy and planning documentation prepared under

the RMA (and previous legislation) as well as other related documents

including:

(a) The 1972 Hamilton Area Study, which confirmed that, due to the

existence of the Te Rapa Dairy Factory (and Horotiu Freezing

Works), the area should be regarded as an "area of restraint" and

that urban residential development should be directed elsewhere.

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(b) The 1995 Waikato District Plan zoned the Horotiu Freezing Works

and land to the south as a Special Industrial Area. The Te Rapa

Dairy Factory was zoned as a Dairy Industrial Zone.

(c) The Horotiu Industrial Study was prepared for Waikato District

Council in 2004 by Environmental Management Services Ltd (now

part of Mitchell Daysh Ltd). It involved extensive consultation and

(with the support of the vast majority of landowners in the area)

recommended that the Horotiu / Te Rapa North area be zoned for

Heavy Industrial Purposes – an outcome that was largely reflected in

the Proposed Waikato District Plan (dated 25 September 2004).

Following the resolution of appeals, a combination of Heavy

Industrial, Industrial and Deferred Industrial zoning was confirmed for

the Horotiu / Te Rapa North area in the Waikato District Plan.

(d) The 2005 Strategic Agreement on Future Urban Boundaries agreed

between Hamilton City Council and Waikato District Council following

public consultation provided for the future transfer of all land located

between the Hamilton City boundary and the Waikato Expressway to

the west of the Waikato River (referred to as Growth Cell HT2), to be

developed for industrial purposes. The subsequent transfer of the

land to Hamilton City in 2011 gave effect to that intention.

(e) Future Proof (the Waikato Sub-Regional Growth Strategy) identified

the Horotiu / Te Rapa North area as a Strategic Industrial Node.

Tables 5 and 6 in Future Proof set out the land allocations for

Strategic Industrial Nodes, after which it states:

The allocations set out in Tables 5 and 6 cover a longer timeframe

than the other parts of the settlement pattern. This is because it is

important to have a general long-term indication of industrial land

given the large amount of land required, the longer lead-in times

and the importance of having certainty as to where the strategic

industrial nodes for the sub-region are likely to be now and into the

future.

(f) The Hamilton Urban Growth Strategy, prepared in parallel with

Future Proof, identified sprawl as a major contributor to the

unaffordability of land for residential development and specifically

directed future residential growth towards the southern end of the city

where it would support, and be supported by, existing and planned

infrastructure and services and would contribute towards the

revitalisation of the central city. The Strategy aims to promote a

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"compact and sustainable city", identifying the Horotiu / Te Rapa

North area as an Employment Zone.

(g) The outcomes set out in Future Proof and the Hamilton Urban

Growth Strategy noted above were subsequently given statutory

weight in the operative Waikato RPS, the Waikato District Plan

(relating to the Horotiu area) and the Hamilton City District Plan

(relating to the Te Rapa North area). These are discussed in more

detail in the next section of my evidence.

4.2 Following the completion of the Horotiu Industrial Study (which I co-authored),

I was involved in all of the planning processes associated the preparation of

the policy and planning documents referred to above on behalf of Fonterra.

Fonterra was very dubious about the prospect of the Te Rapa Dairy Factory

falling within the boundaries of Hamilton City. The prospect of falling within the

jurisdiction of an "urban" local authority (compared to the predominantly rural

Waikato District) gave rise to concerns about the likelihood of future planning

decisions that would be inconsistent with the historic industrial use of the

Horotiu / Te Rapa North area.1 At the time, Fonterra's concerns were

addressed by the 2005 Strategic Agreement on Future Urban Boundaries,

specifically stating an agreement:

That the agreed purpose of the growth cells will be to provide for the full

range of urban uses required to ensure the sustainable development of

Hamilton City and its communities. It is noted that the principle intention of

the Growth Cell HT2 is to provide for the continued expansion of the Te

Rapa Industrial area, and its eventual integration with the proposed Horotiu

Industrial cell within the Waikato District. It is however acknowledged that

not all land in area HT2 may be suitable for industrial usage. This includes

the extension of buffers to protect the Waikato River (and its tributaries)

where it adjoins this area. (emphasis added)

4.3 In my view, the qualification at the end of the paragraph above provides no

basis upon which to fundamentally alter the nature of the intended land use

within the HT2 Growth Cell.

5. CURRENT POLICY AND PLANNING FRAMEWORK

5.1 The following section of my evidence identifies the relevant provisions of the

statutory planning framework applicable to the Horotiu / Te Rapa North area,

1 This concern was raised in Fonterra's submission on the 2005 Strategic Agreement on

Future Urban Boundaries (which I wrote for Fonterra).

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including the Te Rapa Dairy Factory site and the Hutchinson Road site owned

by Perry Group on which the Te Awa Lakes development is proposed.

Te Ture Whaimana – Vision and Strategy for the Waikato River

5.2 The Vision and Strategy is most important policy document guiding

development within the Waikato River catchment. As noted in the s42A report,

the Te Awa Lakes proposal presents an unresolved level of risk in relation to

the Waikato River due to geotechnical concerns associated with the Land

Dam. In that regard, in my opinion, significant weight should be placed on

Objective f. of the Vision and Strategy which requires:

The adoption of a precautionary approach towards decisions that may result

in significant adverse effects on the Waikato River, and in particular those

effects that threaten serious or irreversible damage to the Waikato River.

5.3 I acknowledge that the plan to address the existing Alligator weed issue on the

Te Awa Lakes site will provide benefits to the Waikato River by reducing (but

apparently not resolving) a significant current biohazard risk.

National Policy Statement for Urban Development Capacity ("NPS-UDC")

5.4 As noted in the Joint Witness Statement of Economic / Strategic Issues (and

agreed by all Planners), the NPS-UDC forms part of the statutory environment,

but is not determinative of the outcome in relation to Plan Change 2.

Future Proof

5.5 Future Proof identifies the Horotiu / Te Rapa North area as a Strategic

Industrial Node. The key aspects of Future Proof (including the land use

pattern) have been given statutory weight by way of provisions incorporated

into the Waikato Regional Policy Statement, Waikato District Plan and the

Hamilton City District Plan.

Waikato Regional Policy Statement (RPS)

5.6 The site of the Te Awa Lakes proposal forms part of a Strategic Industrial Node

identified in the Waikato RPS, which also includes the Te Rapa Dairy Factory

site.

5.7 The Te Rapa Dairy Factory is identified in the Waikato RPS as a "Regionally

Significant Industry", defined in the Waikato RPS as follows:

Regionally significant industry - means an economic activity based on the

use of natural and physical resources in the region and is identified in

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regional or district plans, which has been shown to have benefits that are

significant at a regional or national scale. These may include social,

economic or cultural benefits.

5.8 The Waikato RPS sets out an extensive range of strongly worded policy

directives in relation to the built environment, including Regionally Significant

Industry. While there are provisions in the Waikato RPS that the proposal is

consistent with, in my opinion, the Te Awa Lakes proposal is contrary to the

most applicable policy directives including the following:

(a) Objective 3.12(c):

integrating land use and infrastructure planning, including by

ensuring that development of the built environment does not

compromise the safe, efficient and effective operation of

infrastructure corridors;

(b) Objective 3.12(g):

minimising land use conflicts, including minimising potential for

reverse sensitivity;

(c) Policy 4.4:

The management of natural and physical resources provides for

the continued operation and development of regionally

significant industry … by … recognising the value and long-term

benefits of regionally significant industry to economic, social and

cultural wellbeing … [and] … avoiding or minimising the

potential for reverse sensitivity;

(d) Implementation Method 6.1.2:

Local authorities should have particular regard to the potential

for reverse sensitivity when assessing resource consent

applications, preparing, reviewing or changing district or

regional plans and development planning mechanisms such as

structure plans and growth strategies. In particular,

consideration should be given to discouraging new sensitive

activities, locating near existing and planned land uses or

activities that could be subject to effects including the discharge

of substances, odour, smoke, noise, light spill, or dust which

could affect the health of people and / or lower the amenity

values of the surrounding area.;

(e) Policy 6.14(g):

where alternative industrial and residential land release patterns

are promoted through district plan and structure plan processes,

justification shall be provided to demonstrate consistency with

the principles of the Future Proof land use pattern;

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(f) Policy 6.16(f):

maintain industrially zoned land for industrial activities unless it

is ancillary to those industrial activities, while also recognising

that specific types of commercial development may be

appropriately located in industrially zoned land;

(g) Section 6A Development Principles (h) and (o):

New development should … be directed away from identified

regionally significant industry … [and] … not result in

incompatible adjacent land uses (including those that may result

in reverse sensitivity effects), such as industry, rural activities

and existing or planned infrastructure.

5.9 In respect of the Waikato RPS direction relating to the management of reverse

sensitivity, many of the provisions require councils to minimise land use

conflicts including the potential for reverse sensitivity. The use of the word

"potential" is notable and, in my opinion, it recognises that reverse sensitivity

is not "an issue until it is an issue" in that the effects of reverse sensitivity prior

to development can be difficult to quantity. The thrust of the provisions relating

to reverse sensitivity is that where there is potential for reverse sensitivity, this

should be actively minimised. There is no need to confirm that reverse

sensitivity is an issue for the Waikato RPS provisions to carry weight, which in

fact would largely be impossible as reverse sensitivity only becomes an issue

when it constrains lawfully established operations. It could take a number of

years for reverse sensitivity to become an issue for an activity, which is why

the potential for reverse sensitivity has to be managed appropriately. One of

the key mechanisms utilised in planning to minimise land use conflicts and

reverse sensitivity is through appropriate zonings. As Ms Buckley has noted,

with any sensitive activity (e.g. residential) locating near its assets there is

always the potential for reverse sensitivity issues to arise.

5.10 In my opinion, the policies that have the most weight are those in respect of

adopting the Future Proof land use pattern (and alternative land release

provisions) and the provisions that relate to Regionally Significant Industry

given that the Te Awa Lakes proposal is located in the vicinity of such industry,

including the Te Rapa Dairy Factory, Horotiu Freezing Works and the Ports of

Auckland inland port at Horotiu.

5.11 Policy 4.4 provides significant policy support for the Te Rapa Dairy Factory and

there needs to be weight placed on this policy given that the Te Rapa Dairy

Factory is a Regionally Significant Industry (as expressed through the

provisions of the Hamilton City District Plan).

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5.12 This policy requires that the Council manage resource management processes

so as to provide for the continued operation and development of the Te Rapa

Dairy Factory. Policy 4.4 requires that this provision for the operation and

development of Regionally Significant Industry by (relevant to the Te Rapa

Dairy Factory):

(a) Recognising the benefits of industry (clause a);

(b) Ensuring that the effects of industry are appropriately managed

(clause c);

(c) At least maintaining (and in some instances, enhancing) access of

industry to natural and physical resources, while balancing demands

for resources (clause e); and

(d) Avoiding or minimising the potential for reverse sensitivity (clause f).

5.13 Clause (f) is fundamental in respect of the Te Awa Lakes proposal. As with

Objective 3.12 it requires the Council to avoid or minimise the potential for

reverse sensitivity. In this regard, the test is to analyse whether there is

potential reverse sensitivity rather than proving there actually will be reverse

sensitivity (which, again, is difficult to confirm until there is an actual issue due

to reverse sensitivity). In my opinion, locating up to 1,100 residential dwellings

in an industrial area creates the potential for reverse sensitivity to constrain

Fonterra's operations or any future expansion at the Te Rapa Dairy Factory or

new industrial activities on the surrounding land.

5.14 In my opinion, the Te Awa Lakes proposal does not avoid or minimise the

potential for reverse sensitivity (which is a directive clause) and therefore, the

residential component of the Te Awa Lakes proposal would not be giving effect

to the Waikato RPS if approved and developed.

5.15 In my view, the proposal is inconsistent with Policy 4.4 and the change of

zoning would not be giving effect to Policy 4.4 of the Waikato RPS.

5.16 In relation to the provisions relating to the adoption of the Future Proof land

use pattern, it is acknowledged that the proposal is contrary as it is located

within a Strategic Industrial Node. To provide some degree of flexibility to allow

for circumstances where it may be appropriate to deviate from the Future Proof

land use pattern, the Waikato RPS also includes "alternative land release"

provisions. Section 6.14.3 of the Waikato RPS sets out the criteria for any

alternative residential or industrial land release. It states:

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6.14.3 Criteria for alternative land release

District plans and structure plans can only consider an

alternative residential or industrial land release, or an alternative

timing of that land release, than that indicated in Tables 6-1 and

6-2 in section 6D provided that:

a) to do so will maintain or enhance the safe and efficient

function of existing or planned infrastructure when

compared to the release provided for within Tables 6-1

and 6-2;

b) the total allocation identified in Table 6-2 for any one

strategic industrial node should generally not be

exceeded or an alternative timing of industrial land

release allowed, unless justified through robust and

comprehensive evidence (including but not limited to,

planning, economic and infrastructural/servicing

evidence);

c) sufficient zoned land within the greenfield area or

industrial node is available or could be made available in

a timely and affordable manner; and making the land

available will maintain the benefits of regionally

significant committed infrastructure investments made to

support other greenfield areas or industrial nodes; and

d) the effects of the change are consistent with the

development principles set out in Section 6A.

5.17 Section 6.14.3 of the Waikato RPS is tightly worded. It states that "District

plans and structure plans can only consider an alternative residential or

industrial land release … provided that" (emphasis added) all four of the

following criteria are met (insofar as they are engaged by a particular

development proposal).

5.18 In terms of each of the four criteria in Section 6.14.3 of the Waikato RPS

(quoted above):

(a) In relation to (a), the analysis of the alternative land release

provisions in Table 9 of the AEE supporting the Te Awa Lakes

proposal does not provide any analysis in relation to the safe and

efficient function of Te Rapa Road (a form of infrastructure). It was

primarily the constraints in the roading network that gave rise to the

staged land release provisions relating to the Te Rapa North

Industrial Zone (discussed later in my evidence). The evidence of

Mr David Smith concludes that the safe and efficient function of Te

Rapa Road will be compromised if Plan Change 2 goes ahead,

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compared to the staged land release for industrial purposes set out

in the Hamilton City District Plan.

(b) Criterion (b) is not relevant to the Te Awa Lakes proposal on the

basis that the industrial land release is not being exceeded, but rather

reduced.

(c) Criterion (c) is more to do with bringing forward the timing of a

particular land release rather than changing the nature of the

intended land use (and is therefore not particularly relevant to the Te

Awa Lakes proposal).

(d) In relation to criterion (d), as noted above, the Te Awa Lakes

proposal is contrary to the Development Principles in Section 6A of

the Waikato RPS that require that new development "be directed

away from identified regionally significant industry" and "not result in

incompatible adjacent land uses (including those that may result in

reverse sensitivity effects), such as industry, rural activities and

existing or planned infrastructure". Due to its isolated location, the

Te Awa Lakes proposal is also contrary to Development Principle (i)

which is to "promote compact urban form, design and location to …

[amongst other outcomes] minimise the need for private motor

vehicle use".

5.19 When preparing or changing a district plan, section 73(4) of the RMA requires

local authorities "to give effect to a regional policy statement". In my opinion,

the Te Awa Lakes proposal is inconsistent with the policy directives in the

Waikato RPS quoted above and does not meet the criteria for alternative land

release. On that basis, it is my opinion that Plan Change 2 does not give effect

to the Waikato RPS.

5.20 In relation to Implementation Method 6.3.1(d) of the Waikato RPS, the private

plan change states that:

The Te Awa Lakes plan change does not include industry. The plan change

does not have any impact on existing industries in the locality or future

industries in the Te Rapa North or Horotiu Strategic Industrial Nodes which

will continue to have good access to the strategic transport network

comprising the Waikato Expressway and the North Island Main Trunk

Railway. The ITA demonstrates that the effects of traffic generated from Te

Awa Lakes can be readily mitigated, as provided for in the Plan Change

rules.

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5.21 This statement, in my opinion, is not correct. While I agree that the plan

change does not provide for industry, the plan change results in industry not

being able to locate in the area, which has links to strategic transport networks.

As detailed in the evidence presented by Mr David Smith, there will be adverse

effects of the development on the roading networks.

Hamilton City District Plan

5.22 In his evidence (at paragraphs 4.6 – 4.18), Mr John Olliver provides an account

of the planning history of the Horotiu / Te Rapa North area from 2004 onwards.

He characterises the Horotiu / Te Rapa North area as having evolved into a

"mixed-use" area with reference to the enclave of residential land uses in the

vicinity of the Horotiu School and potential development of the Country Living

Zone to the south of the school. As can be seen from the Planning Map of the

Horotiu area in the Waikato District Plan below (Figure 3), there are two areas

of actual or potential residential development. One is centred around Horotiu

School and the other is to the southwest of the Horotiu Freezing Works.

Figure 3: Waikato District Planning Map

5.23 The Planning Map shows that the vast majority of the Horotiu area is zoned for

industrial purposes (being the various shades of purple on the Planning Map).

Horotiu, along with the Huntly Power Station, is the only part of the Waikato

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District that has a Heavy Industrial Zone (i.e. the dark purple area on the

Planning Map which includes the Horotiu Freezing Works). While it is zoned

Rural Zone, the large triangular area of land between the Heavy Industrial Zone

and the Waikato River is owned by Affco and used for the management and

treatment of wastewater as part of the Horotiu Freezing Works (i.e. it is

essentially an extension of the industrial activity / area).

5.24 The following aerial photograph of the Horotiu area (Figure 4) shows that

residential development surrounding the Horotiu School is more potential than

reality at present. It includes long established activities such as SD European

and Keith Hay Homes. However, if and when this area is developed for

residential or rural residential purposes, it will have a separation from the Te

Rapa Dairy Factory of over 1km (with the Te Rapa Bypass being an intervening

feature with its own level of effects on the surrounding environment). With

minimum lot sizes of 5,000 m2, the rural residential development in the Country

Loving Zone (along the Waikato Expressway frontage) will also be of a much

lower number and density of residential activities than Te Awa Lakes.

Figure 4: Development Surrounding the Horotiu School

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5.25 The following Planning Map in the Hamilton City District Plan (Figure 5) shows

the situation to the south and east of the Te Rapa Bypass (within the northern

part of Hamilton City).

Figure 5: Operative Hamilton City Planning Map - Zoning

5.26 Apart from a strip of land along the Waikato River, the Planning Map shows

that the entirety of the Te Rapa North area is zoned Te Rapa North Industrial

Zone (the orange shading) with mostly Industrial Zone to the south (the yellow

shading). The reserve area (shaded green) to the south of the Te Rapa North

Industrial Zone is mostly occupied by the Hamilton Wastewater Treatment

Plant and an equestrian centre.

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Figure 6: Operative Hamilton City Planning Map - Features

5.27 Figure 6 shows that the Te Rapa Dairy Factory is identified as a "feature"

(within the Te Rapa North Industrial Zone) and the surrounding land is Deferred

Industrial Zone. The latter provides for 14 hectares of land2 to be developed

for industrial purposes prior to 2021 and a further 46 hectares3 from 2021

onwards. The original version of this staged land release was developed as

part of the resolution of appeals on the (now operative) Waikato District Plan.

Those provisions included the balance of the land in the Te Rapa North area

2 7 hectares on Fonterra's land on the western side of Te Rapa Road and 7 hectares on

the Hutchinson Road site owned by Perry Group. 3 23 hectares on each of Fonterra's and Perry Group's land referred to above.

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(beyond the 60 hectares discussed above) being released for industrial

development from 2041 onwards. The latter was not included in the Hamilton

City District Plan when those provisions were transposed into that document

on the basis that 2041 was considered to be well beyond the planning horizon

of the Plan.

Objectives and Policies in the Hamilton City District Plan

5.28 Chapter 2 of the Hamilton City District Plan sets out the strategic framework

for the development of the city. As with the Waikato RPS, there are provisions

that the proposal is consistent with. However, the proposal is inconsistent with

a number of key objectives and policies, and in my view, significant weight

should be placed on the provisions I discuss in the following paragraphs.

5.29 Cascading from Objective 2.1.1 (in which Hamilton is to be characterised by a

sustainable form), is Policy 2.2.1c which states that land use zoning and

subdivision controls will be used as methods to achieve the sustainable use of

the city's land resources including providing for separation, proximity and

agglomeration of land uses.

5.30 Policy 2.2.1c sets out that zoning will be used as a method to achieve the

sustainable use of the city's land resources. In the context of the proposal, the

re-zoning of the land would not provide sufficient separation of two

incompatible land uses and does not result in the agglomeration of compatible

land uses.

5.31 The requirement for developments to be consistent with the Waikato RPS

growth management policies is enshrined in the Hamilton City District Plan

through Objective 2.2.2 and Policy 2.2.2a which states that "development shall

occur in locations that are consistent with the growth management policies of

the Waikato Regional Policy Statement". As demonstrated earlier in my

evidence in relation to an analysis of the Waikato RPS growth management

policies, it is my opinion that the Te Awa Lakes proposal is not consistent with

the growth management policies of the Waikato RPS as required by Policy

2.2.2a.

5.32 Chapter 2 of the plan includes the following objective, policies and explanation

under the heading "Business and Industry":

(a) Objective 2.2.5

Industrial and business activities contribute to the economic,

cultural, social and environmental wellbeing and prosperity of

the community.

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(b) 2.2.5a:

The positive effects of business and industry on economic,

cultural, social and environmental wellbeing are encouraged

and promoted.

(c) 2.2.5b:

Business and industrial activities and development shall use

land allocated and serviced for business and industrial

purposes.

(d) 2.2.5c

Industrial zoned land shall be safeguarded for industrial

purposes.

(e) Explanation:

Industrial and business activities contribute to the economic,

social and environmental wellbeing of the community. Sufficient

land is required to cater for those activities and should be

protected for these purposes.

5.33 The Hamilton City District Plan states, as part of the "purpose" of the Industrial

Zone that:4

The industrial land base in the City is a key economic driver for the

regional economy. Industrial land in the City represents a finite and

valuable resource that needs to be recognised and protected.

5.34 Following an objective5 that "Industrial land uses are able to establish and

operate within the [Te Rapa North Industrial] zone in an efficient and effective

manner", there are a large number of policies and other objectives which

recognise and provide for industrial activities and seek to avoid the

establishment of incompatible activities in industrial areas. These policies

seek to achieve outcomes such as:

(a) Policy 12.2.1a - Industrial land is used for industrial uses.

(b) Policy 12.2.1b - Non-industrial uses establish and operate only

where they are ancillary to industrial activities, supporting industrial

activities, or are consistent with industrial land uses.

4 Section 9.1(a) of the Hamilton City District Plan. 5 Objective 12.2.1 of the Hamilton City District Plan.

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(c) Policy 12.2.1c - Non-industrial uses do not adversely affect the

industrial use of the Te Rapa North Industrial Zone, or impact

adversely on the strategic role of the Central City as the primary

office, retail, and entertainment centre, and the other commercial

centres in the City.

5.35 In my view, the Te Awa Lakes proposal is contrary to the objectives and

policies set out in the preceding paragraphs. The focus of these objectives

and policies is to ensure that industrial land is used for industrial purposes and

that non-industrial uses (including residential activities) are not located in such

areas unless they are ancillary to, and support, industrial activities, and do not

adversely affect the use of the zone for industrial purposes. The Te Awa Lakes

proposal is also contrary to most of the other objectives and policies relevant

to the Te Rapa North Industrial Zone as follows:

(a) Objective 12.2.3 - Industrial development is consistent with the long

term land use pattern for the Te Rapa North Industrial Zone and

occurs in an integrated, efficient and coordinated manner.

(b) Policy 12.2.3a - The development of land in the Te Rapa North

Industrial Zone is undertaken to ensure it aligns with the Regional

Policy Statement.

(c) Policy 12.2.3b - Industrial development in the Te Rapa North

Industrial Zone occurs in an integrated and coordinated manner that

aligns with capacity improvements to the existing reticulated

infrastructure (water and wastewater) and roading, or which is in

accordance with exemptions from the requirement to connect new

development to that infrastructure.

(d) Policy 12.2.3c - Industrial development in the Te Rapa North

Industrial Zone, beyond the first 7 ha for each Stage (1A and 1B6),

is timed to coincide with the availability of all necessary reticulated

infrastructure unless an express exception is provided for in this Plan.

(e) Policy 12.2.3f - The development of land within Stages 1A and 1B is

undertaken in a manner which ensures the integrated and efficient

development of the Te Rapa North Industrial Zone.

6 Stage 1B relates to the land owned by Perry Group on which the Te Awa Lakes

proposal is intended to be located.

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(f) Policy 12.2.3g - The development of land beyond the areas identified

for development in this District Plan shall be avoided until specific

district plan provision is made for that development.

(g) Objective 12.2.4 - Strategically important infrastructure and

investment are supported and not compromised by inappropriate

land use activities.

(h) Policy 12.2.4a - A limited area of land in Stage 1A should be

developed as a dairy business cluster in conjunction with and

complementary to the existing Te Rapa Dairy Manufacturing Site.

(i) Policy 12.2.4b - A limited area of land in Stage 1B in the vicinity of

the proposed Te Rapa/Ngaruawahia sections of the Waikato

Expressway interchange should be developed as a service centre

and associated industrial activities for traveller service and support.

(j) Policy 12.2.4c - Activities allowed within the Te Rapa North Industrial

Zone should not give rise to reverse sensitivity effects in relation to

existing or future industrial activities.

(k) Objective 12.2.5 - Investment in the Te Rapa Dairy Manufacturing

Site as a national and regionally important strategic facility is

supported.

(l) Policy 12.2.5a - The Dairy Manufacturing Site should be recognised

for the important benefits it contributes to the community and dairy

industrial base for the Waikato.

(m) Policy 12.2.5b - Subdivision, use and development shall not

compromise the ongoing and efficient operation of the Dairy

Manufacturing Site.

(n) Policy 12.2.5c - The Dairy Manufacturing Site, as an integral facility

to the agricultural sector of Waikato, shall retain its opportunities for

continued use, intensification and expansion.

(o) Policy 12.2.5d - The ongoing development and use of the Dairy

Manufacturing Site shall be supported through the application of

specific provisions to enable buildings and structures, noise

emissions and heavy vehicle movements occur in a manner to

ensure the efficient operation of the Dairy Manufacturing Site.

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5.36 The policy regime above (most of which is not proposed to be changed as part

of Plan Change 2), seeks to ensure that industrial land is used for industrial

purposes and that incompatible activities (such as residential land uses) do not

occur in proximity to industrial activities or within areas planned for future

industrial activities.

5.37 Objective 12.2.3 seeks that "Industrial development is consistent with the long

term land use pattern for the Te Rapa North Industrial Zone and occurs in an

integrated, efficient and coordinated manner" and Policy 12.2.3a requires "The

development of land in the Te Rapa North Industrial Zone is undertaken to

ensure it aligns with the Regional Policy Statement". These reinforce the long

history of industrial development and associated planning provisions relating

to the Te Rapa North area.

5.38 Another key aspect of the policy regime (and associated planning provisions)

in the Hamilton City District Plan is the staged release of land for residential

and industrial purposes (discussed later in my evidence).

6. SECTION 32 OF THE RMA

6.1 As with any plan change, a proposed re-zoning of land needs to be considered

in relation to the matters set out in s32 of the RMA. At its most basic level, a

key part of any such s32 analysis is the ability to reach a conclusion that the

land is suitable for the intended purposes that the new zoning will allow. In this

regard, Mr Eccles has concluded that the land identified for commercial

purposes is suitable for its intended purpose (and I have no issue with that

conclusion).

6.2 However, at the time of writing his s42A report, Mr Eccles has concluded that

he does not have sufficient information to conclude that the balance of the land

is suitable for residential purposes. His conclusions are based on concerns

about geotechnical and stormwater management issues. In my view, there are

a number of other reasons why the same conclusion can be reached for

aspects of the proposal that do not relate to geotechnical considerations or

stormwater management issues:

(a) Existing constraints in the roading network, which will only be made

worse with the capacity of the network (particularly Te Rapa Road)

being taken up with predominantly residential activities (as discussed

in the evidence of Mr David Smith). The fact that the applicant has

proposed a resource consent application process for each

development cell forming part of the Te Awa Lakes proposal

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(including an Integrated Transportation Assessment supporting each

application) illustrates the fact that a conclusion cannot be reached

at this point in time that the Hutchinson Road site is suitable for its

intended purpose(s) from a roading perspective as proposed by way

of Plan Change 2.

(b) One of the reasons why the Hon Jenny Salesa, Associated Minister

of Housing and Urban Development, declined the SHA applications

relating to the Te Awa Lakes proposal was:7

I am also concerned the proposed SHA would result in a small

residential community which is car dependent, separated from

community facilities, and with no current provision for mass transit.

This would be contrary to the Government's priorities for urban

development in New Zealand.

(c) The isolated nature of the Te Awa Lakes proposal from other

residential areas and services in Hamilton City, as discussed in the

evidence of Mr David Smith and Mr Brad Coombs.

(d) Incompatibility with surrounding land uses resulting in reverse

sensitivity effects and the development of industrial land being

compromised (discussed later in my evidence).

6.3 In relation to the last point above, the s32 analysis associated with Plan

Change 2 should include an assessment of the costs in terms of the Te Awa

Lakes proposal constraining, limiting or preventing further industrial

development in the surrounding parts of the Te Rapa North Strategic Industrial

Node. It does not include an assessment of this nature.

7. RESIDENTIAL AND INDUSTRIAL LAND SUPPLY

7.1 In relation to the supply of residential land within Hamilton City, it is my

understanding that all relevant experts agree that the Te Awa Lakes proposal

is not necessary to meet the required level of supply of residential land.8

7 Letter from the Hon Jenny Salesa, Associated Minister of Housing and Urban

Development, to His Worship Mayor Andrew King (undated) declining the SHA

applications in relation to the land owned by Perry Group at Hutchinson Road. 8 See, for example, paragraph 24 of the Joint Statement of Economics / Strategic Issues

Witnesses.

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7.2 In relation to the supply of industrial land, a point I noted in the Expert

Caucusing9 is that all of the various assessments of industrial land supply

appear to be based on what is zoned, rather than what is actually available to

the market. From my recent experience, unless you want a 2,000 – 5,000m2

industrial lot (which are available in the Arthur Porter Drive area), it is very

difficult to find industrial land for sale in Hamilton City. The following provides

four recent examples of clients of Mitchell Daysh having to look elsewhere due

of a lack of actual supply of industrial land in Hamilton City:

(a) Architectural Profiles Ltd ("APL") – APL is New Zealand's largest

manufacturer and supplier of aluminium doors and windows which is

currently located in Te Rapa on four sites separated by arterial roads.

APL needed about 28 hectares of industrial land to consolidate and

expand its business activities. No land of this size was available

anywhere in Hamilton City. Tainui Group Holdings Ltd could offer up

to 13 hectares but would not sell the land (and the scale of

investment involved would never be made on leased land). In order

to meet APL's needs, Mitchell Daysh advanced Private Plan Change

11 to the Waipa District Plan to rezone land for industrial purposes

at Hautapu, just north of Cambridge. Plan Change 11 was approved

by Waipa District Council in December 2018 and construction of

APL's new facilities is now well under way.

(b) Another client of my firm, a primary producer10, is seeking to establish

their Global Packing and Distribution Centre in Hamilton. Again, no

industrially zoned and serviced land of sufficient size was able to be

found within Hamilton City. To resolve this situation, Mitchell Daysh

is working with a land owner in the Te Rapa North area and the

Council to enable the development of part of the Deferred Industrial

Zone.

(c) Meadow Mushrooms Ltd is based in Christchurch but Auckland is its

largest market. The company is currently seeking about 12 hectares

of industrially zoned land to establish a mushroom growing operation

which will employ up to 650 staff. Again, we have not been able to

find a suitable site within Hamilton City (or elsewhere within a 30km

radius of Hamilton City – proximity to a large labour force being a key

criteria).

9 See paragraphs 20 and 21 of the Joint Statement of Economics / Strategic Issues

Witnesses. 10 The identity of the client is the subject of a confidentiality agreement.

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(d) BBC Technologies Ltd ("BBC") is a research and development

company with a manufacturing component. For some years, we

have been looking for a suitable site for BBC to relocate to from its

undersized premises at Ingram Road near Hamilton Airport. The

company needs about 4.5 hectares of land. We are currently working

on "creating" a site for BBC on land in the Waipa District which is

within the Rural Zone.

7.3 The same situation exists at Hautapu – a Strategic Industrial Node just north

of Cambridge. At Hautapu there is a large area of land zoned Industrial Zone

but the land owner will not release it to the market. While we were advancing

Plan Change 11 for APL, we had numerous enquiries from industrial

businesses wanting to locate at Hautapu but could not find any land available

to the market.

8. ECONOMIC VIABILITY AND TIMING OF DEVELOPMENT

8.1 Perry Group has advanced the Te Awa Lakes proposal on the basis that

industrial development of the site is not economically viable. While questions

remain as to what could occur on the site in terms of different or partial

industrial development scenarios (see the evidence of Mr Michael Martin) or

other alternative uses, I note that the management of a quarry operation is

typically influenced and guided by the intended end use of the site. The sand

quarries that I have consented have included progressive rehabilitation of the

site to a state that is suitable for the intended future use and the costs of doing

so are factored into the business operation from the outset.

8.2 The proposed rehabilitation has not occurred in relation to the Hutchinson

Road site, which appears to be a breach of the relevant consent conditions.11

The following (Figure 7) is a plan contained in Perry Aggregates "Hutchinson

Road Quarry – Management Plan Version 3" – September 2012).12 It includes

(in the legend) dates by when areas are to be reinstated in accordance with

11 See for example, Condition 38 of Resource Consent 69 03 028 granted by Waikato

District Council which requires that:

"The rehabilitation of the land to which this consent relates shall be undertaken such

that:-

…

ii the site is rehabilitated progressively and in conjunction with the sand mine

development, such that at any one time the total area disturbed by mining

and permanent rehabilitated activities is generally limited to 10 hectares." 12 Presented in Appendix 11 of the AEE supporting PPC2.

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Condition 38 of the Resource Consent 69 03 028 granted by Waikato District

Council.

Figure 7: Sand Quarry Reinstatement Plan 2012

8.3 If you compare the plan in Figure 7 above with the current state of the site as

shown in Figure 2 of my evidence, it is clear that most of the reinstatement

required by the management plan has not occurred within the required

timeframes. On that basis, the sand quarry is in breach of Condition 39 of

Resource Consent 69 03 028 which states:

Rehabilitation of the site shall be undertaken in accordance with the

approved management plan required by Condition 38 and 38b and

implemented under the supervision of persons with appropriate

rehabilitation experience.

8.4 Having extracted the mineral resource (and the associated financial returns),

it is common practice for mining sites which end up with a large void which fills

up with water to be "retired" from future productive uses or are otherwise used

for non-commercial uses (e.g. a lake and associated recreational use – both

on and around the lake). In that regard, the recreational activities proposed by

Perry Group on the Hutchinson Road site are, in my opinion, entirely

appropriate.

8.5 If the Commissioners accept the evidence of Perry Group and the Council

which concludes that the land is not suitable for industrial development in the

short to medium term, that does not in itself mean that the land is suitable for

residential development (this was an agreed point at the Planning Caucusing).

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The most financially economic use of any site is not necessarily the best

outcome from a land use planning perspective. In my opinion, for the reasons

discussed in my evidence, the site is not suitable for residential development.

8.6 Mr O'Dwyer, for the Council, places significant weight on the conclusions of

various technical reports that "the site is not feasible for industrial development

for up to a 15-year period and possibly longer". A key point to note is that the

current planning regime in the Hamilton City District Plan (previously discussed

in my evidence) identifies most of the Hutchinson Road site as Deferred

Industrial Zone, whereby half the site (32 hectares) is not programmed for

development until at least 2041. That was an outcome agreed to by Perry

Group as part of the resolution of the appeals on the (now operative) Waikato

District Plan. The staged land release (which is now in the Hamilton City

District Plan) was to allow time for all the necessary infrastructure, particularly

roading, to be in place to service the development of industrial activities. It was

also due to the fact that the development of the Rotokauri area was

programmed as the first priority in terms of industrial land supply (being

adjacent to the existing Te Rapa industrial area and representing a logical

growth of the city progressively to the north).

8.7 Most of the other properties in the Te Rapa North Industrial Zone are in the

same situation, whereby none of them are allowed to develop for industrial

purposes within the life of the current Hamilton City District Plan (they can

effectively only carry on with existing uses – mostly farming activities). Those

areas (including just over half the Hutchinson Road site) have been purposely

set aside for future industrial development, whereby development is not

anticipated until at least 2041. I consider this is directly relevant to the

evidence for Perry Group that focuses on economic feasibility within the next

15 years.

8.8 Mr O'Dwyer (at paragraph 119 of his evidence) acknowledges that the

"challenging ground conditions" have arisen from the actions of the current

land owner. He then (in paragraph 120 of his evidence) states that "the starting

point of any feasibility analysis can only have regard to what has been lawfully

established, irrespective of whether the applicant is partly responsible for the

ground conditions on the site". I accept that the sand quarry was lawfully

established in the first instance (it has all the necessary consents under the

RMA), however, it does not appear to have been operated in a lawful manner

(as noted above, the rehabilitation of the site has not occurred in accordance

with the conditions of Resource Consent 69 03 028). ''I do not consider that

applicant's financial challenges resulting from the its sand mining operation

being undertaken in a manner that I consider to be non-compliant with its own

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resource consent conditions should weigh in favour of the plan change being

approved.

8.9 Mr O'Dwyer (from paragraph 183 onwards in his evidence) also discusses

potential alternative uses of the Hutchinson Road site. In relation to a potential

rural use of the site, he notes (in the table in paragraph 184 of his evidence):

Will result in a rural land use site in the middle of an urban area. Unlikely

/ unknown if such a site in this location could reasonably be used for

rural production.

8.10 The Hutchinson Road site is not "in the middle of an urban area". It is at the

very northern tip of Hamilton City. The Te Rapa North Industrial Zone provides

for "Farming activity" as a Permitted Activity.13 In terms of the "unlikely /

unknown" aspect of the issue identified by Luke O'Dwyer, as can be seen from

the aerial photography (including Figure 2 of my evidence) and a site visit, the

majority of the Te Rapa North Industrial Zone is currently used for farming

purposes while, in accordance with the policy and planning regime, it awaits

the opportunity to be developed for industrial purposes should the owners of

that land wish to do so (including Fonterra's land on the western side of Te

Rapa Road, which is a similar size to the Hutchinson Road site).

8.11 In relation to a potential open space / recreational use of the site, Mr O'Dwyer

dismisses this option on the basis of there being no demand (despite Perry

Group proposing a substantial recreational component as part of the Te Awa

Lakes proposal) and the cost to Council in purchasing the land. In relation to

the latter, there should not be any presumption that the Council needs to

purchase the land if part of it was, for example, to be developed as a lake and

used only for recreational purposes (like many other remediated quarries).

8.12 Of the alternative options considered, in my opinion, residential development

would have to be the least desirable from a strategic land use perspective

(particularly for the reasons discussed in the next section of my evidence).

9. REVERSE SENSITIVITY

9.1 In its submissions, Fonterra raised significant concerns about reverse

sensitivity effects arising on their activities if the Te Awa Lakes proposal is

approved.14

13 Rule 12.3.3(d) which provides for activities in the Future Urban Zone as a Permitted

Activities which includes "Farming activity" in Rule 14.3(d). 14 Contact Energy raised similar concerns.

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9.2 I understand that various decisions of the Environment Court have identified

the following "planning principles" with respect to reverse sensitivity:

(a) The concept of reverse sensitivity is a valid effect under the RMA and

may arise when "sensitive uses" (usually residential or

accommodation activities) locate in close proximity to existing uses

forming part of the "existing environment" which have actual or

potential offsite effects. The owners and occupiers of these more

recent sensitive land uses then seek to constrain the existing use or,

just as importantly, will oppose any attempt to further develop or

expand the existing activity. Reverse sensitivity effects also arise

when particular land uses compromise the use and development of

a natural resource (e.g. quarries or geothermal resources).

(b) District Councils are responsible for managing these reverse

sensitivity effects (e.g. by making appropriate provisions in their

District Plans and in the determination of resource consent

applications).

(c) Generally, buffer zones or setbacks are appropriate around existing

uses where those uses have taken reasonable steps to avoid,

remedy or mitigate their offsite effects. Sensitive uses wanting to

establish within those zones or setbacks are required to be assessed

against various criteria to determine the potential level of reverse

sensitivity effects, and may be subject to conditions (e.g. acoustic

insulation) reducing those potential effects.

9.3 Experience has demonstrated that compliance with consent conditions or

performance standards by the operators of large-scale industrial activities does

not always avoid the creation of reverse sensitivity issues. It is not always the

actual effects of large-scale industrial activities which give rise to reverse

sensitivity issues, but rather the perception of an adverse effect caused by

higher expectations of amenity being imposed on the environment (in this case

the surrounding industrial environment) by the owners of residential, rural

residential and/or lifestyle block developments (or, in this case, it would also

include guests in a hotel). This is often best illustrated by complaints about

odours in the rural environment such as silage or the use of tractors and other

machinery beyond daylight hours.

9.4 Reverse sensitivity effects can manifest in a number of ways, including:

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(a) complaints in relation to the effects of industrial activities, and the

costs associated with having to respond to such complaints

irrespective of the merits of those complaints;

(b) additional costs associated with resource consent applications. For

example, the extent to which third parties would be notified in relation

to any resource consent applications by Fonterra (e.g. air discharge

permit) would significantly increase due to 1,100 additional

potentially "affected parties" who will have an interest in protecting

residential amenity values (being an outcome higher than expected

in an industrial environment);

(c) a significantly increased likelihood of objections to resource consent

applications made by the operators of industrial activities and

appeals in relation to any decision to grant such consents; and

(d) submissions and / or further submissions on district and regional

plans seeking greater limitations or restrictions on industrial

activities.

9.5 All of the above manifestations of reverse sensitivity effects have already been

experienced by Fonterra in relation to the Te Rapa Dairy Factory (and I have

been involved in many of those situations faced by Fonterra over the last 25

years). Those types of adverse effects can only realistically be expected to

get worse (they would be likely to significantly increase) as a result of up to

1,100 additional residential units establishing in close proximity to the Te Rapa

Dairy Factory.

9.6 Mr O'Dwyer acknowledges15 that "there may be a perception of reverse

sensitivity effects resulting from the project" but dismisses concerns about

reverse sensitivity effects on the basis that "the scale and dimensions of

perceived effects are not known or quantified". In my opinion, this is not an

adequate response to a potentially very significant environmental effect.

Reverse sensitivity effects are driven by subjective human perceptions and are

rarely quantifiable (particularly in advance of them occurring).

9.7 As previously noted, the policy regime in the Waikato RPS and the Hamilton

City District Plan include strongly worded policy directives which require

"minimising land use conflicts, including minimising potential for reverse

sensitivity"16 or "not give rise to reverse sensitivity effects in relation to existing

15 At page 6 (last bullet point) of his evidence. 16 Waikato RPS Objective 3.12(g).

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or future industrial activities"17 and a requirement that "Subdivision, use and

development shall not compromise the ongoing and efficient operation of the

Dairy Manufacturing Site"18 (emphasis added).

9.8 The Te Awa Lakes proposal will change the nature of the existing and planned

physical environment from an industrial environment (recognised as a

Strategic Industrial Node) to a residential environment. With that change will

come higher expectations of amenity from the owners of residential units

compared with that of an industrial environment. That, in turn, will make it more

difficult and expensive for industrial activities to establish or expand in the

surrounding area. In a worst-case situation, the presence of sensitive land

uses (e.g. residential units) could effectively foreclose the development of

industrial activities. The evidence of Ms Buckley confirms that Fonterra may

not invest further in any expansion of activities on the Te Rapa Dairy Factory

if the Te Awa Lakes proposal is accepted and implemented. This situation has

occurred in the past. I was involved in a project for Fonterra whereby it was

proposing a new large drier on the Te Awamutu site. Having worked through

the issues associated with that project, it was abandoned on the basis of the

proximity of neighbouring residential properties and the inability to maintain

"residential" standards of amenity for those properties.

9.9 The change in land use character resulting from the Te Awa Lakes proposal

also effectively "locks in" the current level of off-site effects associated with the

ongoing operation and any future expansion of the Te Rapa Dairy Factory.

This, in turn, will foreclose any increased level of industrial activity which brings

with it a proportional increase in off-site effects. Those off-site effects, and any

increase, such as noise, are unlikely to be an issue in relation to industrial

neighbours, which are also predominantly day time activities, whereas the

Noise Control Boundary relating to the Te Rapa Dairy Factory site is a night-

time noise limit of 45 dB LAeq (15 min). Mitigating noise effects on a small

number of existing residential neighbours, e.g. double glazing, (if required) is

an achievable outcome, whereas attempting to do the same for a significant

residential suburb is not.

9.10 The evidence of Steven Pearce points out that most of the complaints about

odour emanating from the Te Rapa Dairy Factory have been from residents on

the eastern side of the Waikato River. That is, to a large extent, due to the fact

that the eastern side of the Waikato River is where the highest number and

density of sensitive receptors (i.e. residential activities) are located. If up to

17 Policy 12.2.4c of the Hamilton City District Plan. 18 Policy 12.2.5b of the Hamilton City District Plan.

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1,100 residential dwellings are located on the Hutchinson Road site, there

would be a significantly greater risk of complaints arising from that area

(particularly compared with the total absence of residential activities on the site

at present).

9.11 If concerns from neighbours arise in relation to odour emitted from the Te Rapa

Dairy Factory, the nature of the surrounding environment is a critical factor to

be considered in relation to the FIDOL factors19 to determine whether nor not

an odour is "objectionable or offensive" (being the effect that consent

conditions require be avoided at or beyond the boundary of the site emitting

the odour). The L of FIDOL is "Location". If an odour is being experienced in

an industrial location where no one lives (they mostly only work there during

the day), there is a higher tolerance or threshold for an odour to be considered

objectionable or offensive based on the nature of that location. In contrast,

there is a much lower threshold if that same odour is experienced by

neighbours in a residential location. Accordingly, the changed nature of the

receiving environment (if the Te Awa Lakes proposal is approved) means that

Fonterra will then be held to a higher standard in terms of what is deemed to

be an objectionable or offensive odour in a location that is now a residential

environment. As a result, there is an increased likelihood of complaints (a

manifestation of reverse sensitivity). Mr O'Dwyer (at paragraph 64 of his

evidence onwards) discussed the future incorporation of the HT1 Growth Cell

into Hamilton City in the future and it being developed for "urban purposes" in

addition to the existing Country Living Zone along the eastern margin of the

Waikato River. This appears to be an argument along the lines that there will

be residential activities on the opposite side of the Waikato River in the future

and therefore Fonterra should not be concerned about the Te Awa Lakes

proposal being a similar distance away. I do not accept that argument.

Fonterra has undertaken significant measures to insulate itself from the

existing (and future) residential neighbours on the opposite side of the Waikato

River. This has included a very large earth bund (fully planted) along the top

of the river bank to screen the Dairy Factory from neighbours (both in terms of

visual and noise screening).

9.12 I have previously noted some of the concerns that Fonterra had in relation to

the formulation of the 2005 Strategic Agreement on Future Urban Boundaries.

At the time, in relation to the HT1 Growth Cell, Fonterra came to the realisation

that it was futile attempting to halt the residential growth of Hamilton City on

the eastern side of the Waikato River. However, Fonterra was of the view that

19 The annoyance of an odour is a function of the FIDOL factors, which are Frequency,

Intensity, Duration, Offensiveness and Location.

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the land on the western side of the Waikato River (HT2 Growth Cell) should be

for industrial purposes (an outcome which was incorporated into the 2005

Strategic Agreement on Future Urban Boundaries).

9.13 I note that concerns about reverse sensitivity effects was one of the reasons

why Central Government declined the application by Perry Group for a SHA

for essentially the same proposal as is currently being advanced by way of

Plan Change 2. Specifically, the letter from the Hon Jenny Salesa, Associated

Minister of Housing and Urban Development, to the Council declining the SHA,

states:20

The introduction of residential development in the area has the potential

to constrain future industrial activities within the area by way of reverse

sensitivity.

9.14 I agree with that conclusion. There are numerous examples of residential

encroachment throughout New Zealand which have given rise to reverse

sensitivity effects, often resulting in the demise of the pre-existing activity.

Examples include Bay Park Raceway at Mt Maunganui (which had to relocate)

and Western Springs in Auckland. The RNZAF Base at Whenuapai is a recent

example of a neighbouring land owner seeking a rezoning of land adjacent to

the air force base for residential purposes and then seeking to constrain

activities at the base due to concerns about noise (a classic example of reverse

sensitivity in action).

9.15 One of the most fundamental and well-established principles of sound

resource management planning practice is the separation of incompatible

activities. As a good example of this in practice, on behalf of Hamilton

International Airport, John Olliver has successfully (and appropriately in my

opinion) secured a range of planning provisions in the Waipa and Waikato

District Plans that restrict the establishment or expansion of noise sensitive

activities in proximity to the Airport. The policy regime in the Waikato RPS and

the Hamilton City District Plan (previously discussed in my evidence) strongly

supports the separation of incompatible activities in the Te Rapa North area,

particularly to avoid reverse sensitivity effects.

9.16 The Te Awa Lakes proposal conflicts with this planning principle of separating

incompatible activities (and the policy regime seeking the same outcome). The

Horotiu / Te Rapa North area is an established heavy industrial area defined

20 Letter from the Hon Jenny Salesa, Associated Minister of Housing and Urban

Development, to His Worship Mayor Andrew King (undated) declining the SHA

applications in relation to the land owned by Perry Group at Hutchinson Road.

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in the Waikato RPS as a Strategic Industrial Node. Since the 2011 local

authority boundary relocation, the Te Rapa Dairy Factory is the largest heavy

industrial activity in Hamilton City. Introducing up to 1,100 residential units in

the middle of a Strategic Industrial Node, and within 325 m of the Te Rapa

Dairy Factory, is contrary to the principle of separating incompatible activities.

9.17 Little in the way of mitigation has been proposed by Perry Group to avoid the

creation of reverse sensitivity effects. Perry Group has not, for example,

proposed no-complaint / no objection covenants. While covenants are not

themselves sufficient to avoid reverse sensitivity effects, they are certainly

helpful in that regard (and would be essential in relation to the Te Awa Lakes

proposal).

9.18 If Fonterra proposed to replicate Te Rapa Dairy Factory within 325 m of an

existing residential area in Hamilton City, I would expect there to be a

significant level of opposition from the owners of the nearby residential

properties (and with good reason). Furthermore, I would not consider such a

proposal to be credible or in any way sensible from a land use planning

perspective. Such a proposal would, in my opinion, be contrary to sound

resource management planning practice. The only difference in this scenario,

compared with the Te Awa Lakes proposal, is the order in which the two types

of incompatible activity become established, but the end result is exactly the

same – a large scale industrial activity and residential activities in close

proximity to one another. If it is not acceptable for Fonterra to replicate Te

Rapa Dairy Factory on a site within 325 m of an existing residential area in

Hamilton City (which I am certain would be the case), then surely the

establishment of up to 1,100 residential units on a site within 325 m of the Te

Rapa Dairy Factory is an equally unacceptable outcome.

10. CONCLUSION

10.1 The age and longevity of the planning regime consistently providing for large-

scale industrial activities over many decades in the Horotiu / Te Rapa North

area (and also seeking to exclude incompatible activities such as residential

land uses), and the significant level of private and public investment that has

occurred in reliance on that planning regime means that a significant amount

of weight should be place on it in my opinion. The operators of large-scale

industrial activities in the Horotiu / Te Rapa North area, such as Fonterra,

Contact Energy, Affco, and Ports of Auckland (and the general community)

should be able to rely on the integrity of the planning regime that has been in

place for many years and that it will be upheld.

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10.2 My evidence concludes that the Te Awa Lakes proposal advanced by way of

Plan Change 2:

(a) presents an unresolved level of risk in relation to the Waikato River

due to geotechnical concerns associated with the Land Dam and, in

that regard, in my opinion, significant weight should be placed on

Objective f. of the Vision and Strategy;

(b) is directly contrary to a significant number of objectives and policies

in the Waikato RPS and therefore does not "give effect to" the

Waikato RPS as required by section 73(4) of the RMA;

(c) is directly contrary to a significant number of objectives and policies

in the Hamilton City District Plan;

(d) is contrary to one of the most fundamental and well-established

principles of sound resource management planning practice, being

the separation of incompatible activities;

(e) will give rise to reverse sensitivity effects on existing industrial

activities and compromise the development of further industrial

activities in an area identified as a Strategic Industrial Node where

all of the relevant statutory instruments (and other non-statutory

planning documents) have planned for such activities to occur; and

(f) does not include sufficient mitigation measures to avoid or minimise

actual or potential reverse sensitivity effects and effects on the

capacity of the roading network.

Mark Chrisp

18 November 2019