Te Ariki Tahi/Sugarloaf Wharf upgrade

Preliminary Design

 

Above: Design rendering of before and after - click to expand.

 

Above: New wharf layout - click to expand.

The Funding & Ownership of ASTWL

The wharf will be owned by a Special Purpose Vehicle (SPV) which will be a new company to be incorporated. The consent, design, and construction is funded by the Provincial Growth Fund (PGF) with some co-funding from WRC. The SPV called Ariki Tahi Sugarloaf Wharf Limited (ATSWL) is owned jointly by the Crown, CMFA, and our Council at one third each.

Alignment

  • That Sugarloaf needs to be expanded for the future
  • That the facility needs to be professionally managed by our Council in a way that best meets the needs of industry
  • That recreational users will continue to have a facility

FAQ

Why should I support the redevelopment of the wharf?

It will better cater for the larger more modern vessels, provide wharf capacity for industry growth, reduce current health and safety issues and based on recent delay analysis increase productivity / efficiency of users operations and provide resilience for future sea level rises. There will also be better segregation of use between commercial and recreational users.

Who will own the wharf?

The wharf will be owned by a Special Purpose Vehicle (SPV) which will be a new company to be incorporated.

 

Click to expand.

What will happen to the ownership of the existing wharf?

Construction will occur on top of it.

Who owns the land or reclamation currently?

There is no title for the land, therefore the Crown

Will existing users have any ownership rights?

No, although the CMFA will hold 33.3% of the ordinary shares in the SPV, our Council will hold 33.3% and the Crown the remaining third.

Will existing users have any preference over the wharf?

No, a levy will be charged to all consent holders to cover their service providers. Our Council will manage the day-to-day operations as part of an Operational Agreement.

Can the wharf be sold or transferred?

The Crown can transfer their ordinary shares and Preference Shares to another Crown entity and / or Iwi of the region. The provisions of the shareholder agreement would remain in place. Shares offered for sale must be offered to existing shareholders first at Fair Value.

How will CMFA ensure operational certainty for its members?

Through the appointment of two directors to the Board of ATSWL and an independent Chair jointly with our Council and shareholder control over key decisions, e.g. adopting/change Levy Policies. Marine Farmers are currently the only commercial users of the wharf and the benefits from continued growth of the industry remain the key objective of the Crown in funding the wharf.

How will marine farming remain the key purpose and use of the commercial wharf?

The overall purpose of the wharf is set out in the current and proposed resource consent, this purpose is reflected in the shareholders agreement and also in the PPS Subscription (funding) agreement with the Crown. I.e. the wharf is for marine farming activities and recreational use.

What is a Perpetual Preference Share (PPS)?

A perpetual preference share is a type of preferred share that pays a fixed dividend to the investor for as long as the company is in business, unless redeemed. The fixed dividend is dependent on “distributable earnings”, there is not expected to be material levels of distributable earnings because of restrictions to the levying regime.

When does the PPS agreement end?

The PPS is perpetual, meaning it does not have a fixed expiry or end date.

Will the current consent conditions change?

It is likely some conditions will change, but we will be attempting to ensure key consent conditions are retained or enhanced. Will be consultation with CMFA on an ongoing basis via appointed directors.

What does the levy cover?

The levy will cover the cost of operating expenses, including appropriate contingency’s and provisions for future capital maintenance programs agreed by the Board. There is scope for a fixed dividend return to be included in the levy in the longer term as users grow and a cash surplus can be generated, subject to an assessment of marine farmer affordability

How much is the levy?

The initial levy price is not yet finalised, both direct costs to be incurred by ATSWL and the amount charged by our Council as operator are being worked on.

How will the levy be set?

The levy will be set to cover direct operating costs incurred under the Operating Agreement and directly by the ATSWL and provisions for future maintenance expenditure. The costs will be allocated on a per developed hectare basis.

Who will pay the levy?

The levy will be invoiced to the consent holder who will be obligated to pay the levy in order for access to the wharf, but can pass this on, e.g. to their lessee.

Who can use the wharf for servicing farms?

All consent holders will be required to pay the annual levy to enable them or their appointed Marine Farmers and maintenance contractors access to the wharf and the ability to land mussels.

How will access to the commercial wharf be restricted to approved users?

The wharf will have locked gates, accessed by unique pin-numbers and will have surveillance cameras in operation.

When will the new levy arrangement be implemented?

The new levy arrangement is subject to finalisation of the transitional arrangements, it may be enacted before construction of the wharf is finished in order to meet additional transitional costs..

How will the resource consenting phase be managed?

Envirostrat will manage the process, with Richard Turner of Mitchell Daysh likely to be the primary planning agency.

Are there other wharf users?

The shareholders agreement requires ATSWL to allow other users access to the wharf in the future. The levy or charge will be relative to the capacity of the wharf consumed compared to existing users.

Who will govern the wharf owning Company?

Our Council and CMFA have each appointed up to two directors, a single independent director must also be appointed buy CMFA and our Council jointly and act as chairperson.

When will construction commence?

Following consenting which is targeted to be Q4 2020

Will the wharf be operational throughout construction?

Yes, it has been designed to ensure operations (commercial and recreational) will continue uninterrupted.

Planning for the future

This is a multi-decadal project to enable the marine farming sector in the Coromandel.

The marine farming sector has significant plans for growth; over time, that will be impacted if Te Ariki Tahi/Sugarloaf is not upgraded to handle the forecasted additional volume of mussel production (increase from ~25,000 to ~42,000 tonnes over the next few decades).

Central government, Waikato Regional Council (WRC), and our Council have reiterated infrastructure projects like this one adopt a long-term view (100 years) with regard to physical assets; accounting for climate change-related impacts (e.g. sea level rise) and long-term industry growth trends.

Our Council has a separate project (‘Connected Journeys’) improving transport infrastructure within Coromandel, which will consider key roading upgrades needed for the sector and other users. One of the work streams in the Connected Journeys work is an upgrade of Te Kouma Rd onto SH25. This is the main road coming off Te Ariki Tahi, so will be widened and extended to allow for better turn around for traffic Design, planning and consenting is in progress with work planned for the 2021-2022 financial year.