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The Gore District Council’s foray into the residential subdivision market has been shelved in the face of increasing development costs.

The council launched the Matai Ridge subdivision in February. It has already spent $328,345 but only one section has been sold.

This week the council decided not to continue with the development and the site will be restored to pasture and retained by the council.

Gore District Mayor Tracy Hicks and deputy mayor Cliff Bolger voted to continue with the project but were defeated.

“I was in favour of carrying on,” Mr Hicks said.

However, he understood the councillors’ caution.

Despite the failed subdivision, the council’s focus on developing and growing the population and infrastructure had not changed, Mr Hicks said.

Council chief executive Steve Parry said the initial price forecast for stages one and two was $2.4 million but a revised cost came in at $3.5 million.

Initially the council engaged a designer who came up with the first cost for infrastructure for the project. The council decided the design was not up to the standard it required, Mr Parry said.

A second designer was employed and the revised cost was given to the council.

Mr Parry said councillors were torn when making the decision to shelve the project.

“The option was we do the whole lot or do nothing,” Mr Parry said.

But councillors needed to weigh up whether there would be sufficient demand for the sections.

“It was a hard decision for the councillors to make.”

Mr Hicks said the council’s decision to “land-bank” the site meant it still had an approved, fully designed residential development it could roll out when the time was right.

The costs so far covered design and construction costs, project management and legal fees.

“I still believe there will be an opportunity for this project to be realised, when you look long term and take into consideration the impact of such developments as Mataura Valley Milk,” Mr Hicks said.

The sale of only one section contributed to the council’s lack of confidence to go ahead with the project at this time.

The council will refund the purchaser’s deposit.

Matai Ridge had been the main focus of the council’s growth development

First National Real Estate has been marketing the subdivision.

First National co-owner Tara Maxwell said she and her husband Graham had been involved in the project during the past year.

“We are extremely disappointed it’s not going ahead but we understand and respect the decision around the increased cost,” Mrs Maxwell said.

When the council called for a second design it meant delays for people wanting to build.

“We do believe we had a lot of good interest in it, but obviously because of the delays it is a barrier to the sales.”

Ready for Growth steering group chairman Richard McPhail said while the plans for Matai Ridge had been put on hold he believed there would be a need for more subdivision in the future.