Te Ariki Tahi/Sugarloaf Wharf Upgrade

Update August 2024

Ariki Tahi Sugarloaf wharf upgrade to begin late 2024

The $21.95 million upgrade to increase commercial berths and create a separated recreational facility at Ariki Tahi Sugarloaf wharf is set to begin in late 2024, supporting the aquaculture industry’s growth strategy.

In 2020, $19.95 million was given by central government’s Provincial Growth Fund and $2 million from Waikato Regional Development Fund to support the critical upgrades. Consent was fast-tracked under COVID-19 recovery legislation, surviving a judicial review in the High Court, and granted in January 2024.

In late 2023, Ariki Tahi Sugarloaf Wharf Limited (ATSWL) Board tendered the design and construction of the wharf upgrade and awarded the work to a consortium headed by McConnel Dowell. McConnel Dowell and their design partners are currently working on the first stage of the design, which will separate recreational and commercial activities and increase the wharf’s commercial capacity.

Current design work includes the full scope for future development, and applications for further investment to develop land-side aquaculture activities and roading infrastructure will be prepared using the design and cost outputs later this year.

ATSWL is jointly owned by Thames-Coromandel District Council, Coromandel Marine Farmers Association, and the Crown.

Update February 2024

Finfish farm resource consent granted by Waikato Regional Council

Following the High Court decision in December 2023, which did not uphold an appeal of the project's resource consent by Waipapapa Bay Protection Society, Waikato Regional Council has granted resource consent to Finfish farm to begin developing its facility.

“We’re pleased there’s been a final resolution with the hearing and the focus can now be directed to building the facility. It's a positive opportunity to develop our aquaculture industry, and will have some real benefits for our local economy," says our Mayor Len Salt. "Green Lipped mussel volumes are set to increase significantly, potentially doubling by 2040."

The NZ Government Aquaculture strategy notes that the wharf investment will allow the industry to develop to $100 million in value. Aquaculture produces low cost, low emissions protein, which works in well with the environmental aspirations of the Hauraki Gulf Marine Park Act, which seeks clean, productive water.

Mussel extracts have anti-inflammatory health properties (lyprinol), and added value products, such as pharmaceuticals to support joint heath and function for people and pets, are rapidly growing markets.

"Iwi are a key shareholder in our aquaculture industry, who are thinking intergenerationally, holistically and for the benefit of wider whānau. This aligns with well Council and government wellbeing aspirations, and our desire to see wider socio-economic improvement supported," says Mayor Len.

Update: January 2024

Te Ariki Tahi Sugarloaf Wharf upgrade work to resume

Work on a significant upgrade to Te Ariki Tahi / Sugarloaf Wharf in Coromandel can now resume, following a decision by the High Court.

In a judgment released last month, the court did not uphold an appeal of the project’s resource consent by the Waipapa Bay Protection Society.

Te Ariki Tahi is a shared commercial and recreational wharf facility constructed on reclaimed land at the western end of Waipapa Bay, a short drive from Coromandel Town. It is the primary wharf for the thriving aquaculture industry in the Hauraki Gulf, handling 90 per cent of mussels harvested in the North Island.

The upgrade will double the size of the existing facility to establish five commercial berths and a separate recreation facility with dual boat ramps. It will allow for the continued growth and expansion of the aquaculture industry in the region, as well as provide safer segregation of recreational users from industrial areas. Consent to undertake the upgrade was fast-tracked under COVID-19 recovery legislation.

“We’re hugely relieved to be able to make progress again,” says Andrew Stevens, the independent chair of Ariki Tahi Sugarloaf Wharf Ltd, a joint venture company between Thames-Coromandel District Council, Coromandel Marine Farmers Association and the Crown, which was formed to fund and manage the upgrade.

“The wharf as it stands is over capacity. It’s not at all fit to meet the projected needs of the aquaculture industry, nor of recreational users,” says Mr Stevens. “The key objective of the Crown in funding the wharf was to see regional benefits from continued growth in aquaculture, and we’ll resume to realise that goal.”

He says procurement for initial project components is now underway, along with a re-evaluation of costs impacted by the delay, so a construction programme can be finalised.

The full High Court judgment can be read here.

Update: August 2023

An appeal to the resource consent for the Ariki Tahi Sugarloaf Wharf project had a one-day hearing in the High Court in July 2023. The decision is expected to be notified by the end of December 2023.

Update: April 2023

An appeal to the resource consent for the project is scheduled to proceed to a one-day hearing in the High Court in July 2023, unless some resolution can be reached between the parties before then. Ngaati Whanaunga have subsequently joined that appeal. Our Council and the Coromandel Marine Farming Association have joined in support of Ariki Tahi Sugarloaf Wharf.

Update: July 2022

A fast-track resource consent process is underway to decide whether a $20 million upgrade of Te Ariki Tahi Sugarloaf Wharf in Coromandel will go ahead.

If approved, the build will see the wharf platform extended and raised to account for sea-level rise. There will be four new berths for increased aquaculture activity and a separate facility for launching recreational boats.

The fast-track process has seen the Environmental Protection Authority appoint an Expert Consenting Panel to consider and determine the application.

A progress report on Te Ariki Tahi Sugarloaf Wharf's application can be found here.

Update: May 2022

An application to submit a resource consent application through the government’s fast track process, to upgrade Te Ariki Tahi Sugarloaf Wharf, has now been granted.

The next steps in that fast-track process is submitting the resource consent application to the Environmental Protection Authority (EPA). The EPA will then review the application before recommending whether it then be considered by an independent expert panel, made up of RMA commissioners who will either approve or decline the consent.

The fast-track process takes several months.

The proposed design

Sugarloaf design plans.png

The vision for the future look of the area:

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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.

Sugarloaf ownership.png

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.

Frequently Asked Questions

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.

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.

How much is the levy and what does it cover?

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.

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 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.

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.