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Rent hike stuns growers
29.10.2005
JONATHAN DOW
Organic gardeners Judy Moss and Janet Chambers knew the rent on their leasehold land was going to increase, but they were expecting to pay $4100 not $17,500.
The business partners, who run JJ's Organics in Riverbend Road, Napier, had been paying the Hawke's Bay Regional Council $753 a year for 1.3 hectares of the 2.5 hectares they garden.
They knew the rent was going to increase and trying to decide whether they could afford to freehold the land, they asked the council how much.
In June 2003 the council wrote to say their "best guess" was the rent would increase 500-600 percent to $4100 when the lease came up for review in October 2005.
The lease on their other 1.2ha was predicted to increase, too, from $681 to $3750. Their organic vegetables shop in Marewa was not doing well, but they scraped together $110,745 to freehold that lot.
Then late last month they received a letter: The rent would not be $4100 but would increase this year to $17,500 with a further increase to $21,000 in 2012.
Stunned, they were unsure if their business would still be viable without this land.
"There's no doubt that had we had any inkling we would have freeholded years ago," Mrs Moss said.
The council discussed on Thursday whether the council should have known, in June 2003, of the change to the status of the land as well as predicting the huge increase in land values.
The value of rural properties in the Meeanee area have increased between 280 and 560 percent over the last three years.
Valuers Telfer Young put the increase down to a strong increase in rural lifestyle land values and Napier City Council changing the permitted use for the land from rural to rural lifestyle.
Alone in the public gallery on Thursday, Mrs Moss and Mrs Chambers nervously waited to hear if their application for a discount on the freeholding price was approved.
They have decided that they would rather pay the money on a mortgage than on a lease. The price of $280,000 plus GST for the land - "a lot of money for a little organic orchard" - was out of their reach, Mrs Moss said.
Council staff recommended a 5 percent discount (potentially $17,500) not be approved as it would set a precedent.
But Cr Neil Kirton disagreed. "They ought to be able to rely on the advice of the council," he said later, describing the council as a "fat-cat landlord".
"If it were me, I would sue."
The matter was put off until the council's next meeting in November while staff were to determine whether the advice they gave Mrs Moss and Mrs Chambers was as good as it could have been.
The same factors that have driven up Meeanee land values meant Mrs Chambers and Mrs Moss could freehold the land and subdivide it into lifestyle blocks.
News source
29.10.2005
JONATHAN DOW
Organic gardeners Judy Moss and Janet Chambers knew the rent on their leasehold land was going to increase, but they were expecting to pay $4100 not $17,500.
The business partners, who run JJ's Organics in Riverbend Road, Napier, had been paying the Hawke's Bay Regional Council $753 a year for 1.3 hectares of the 2.5 hectares they garden.
They knew the rent was going to increase and trying to decide whether they could afford to freehold the land, they asked the council how much.
In June 2003 the council wrote to say their "best guess" was the rent would increase 500-600 percent to $4100 when the lease came up for review in October 2005.
The lease on their other 1.2ha was predicted to increase, too, from $681 to $3750. Their organic vegetables shop in Marewa was not doing well, but they scraped together $110,745 to freehold that lot.
Then late last month they received a letter: The rent would not be $4100 but would increase this year to $17,500 with a further increase to $21,000 in 2012.
Stunned, they were unsure if their business would still be viable without this land.
"There's no doubt that had we had any inkling we would have freeholded years ago," Mrs Moss said.
The council discussed on Thursday whether the council should have known, in June 2003, of the change to the status of the land as well as predicting the huge increase in land values.
The value of rural properties in the Meeanee area have increased between 280 and 560 percent over the last three years.
Valuers Telfer Young put the increase down to a strong increase in rural lifestyle land values and Napier City Council changing the permitted use for the land from rural to rural lifestyle.
Alone in the public gallery on Thursday, Mrs Moss and Mrs Chambers nervously waited to hear if their application for a discount on the freeholding price was approved.
They have decided that they would rather pay the money on a mortgage than on a lease. The price of $280,000 plus GST for the land - "a lot of money for a little organic orchard" - was out of their reach, Mrs Moss said.
Council staff recommended a 5 percent discount (potentially $17,500) not be approved as it would set a precedent.
But Cr Neil Kirton disagreed. "They ought to be able to rely on the advice of the council," he said later, describing the council as a "fat-cat landlord".
"If it were me, I would sue."
The matter was put off until the council's next meeting in November while staff were to determine whether the advice they gave Mrs Moss and Mrs Chambers was as good as it could have been.
The same factors that have driven up Meeanee land values meant Mrs Chambers and Mrs Moss could freehold the land and subdivide it into lifestyle blocks.
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