Magazine article New Zealand Management

Field of Dreams: The Neil Group's Albany Centre Strategy; Develop It and They Will Come-Underscores the Leap of Faith That Property Developer the Neil Group Took When It Acquired Rural Land on Auckland's North Shore from the Housing Corporation Back in 1993

Magazine article New Zealand Management

Field of Dreams: The Neil Group's Albany Centre Strategy; Develop It and They Will Come-Underscores the Leap of Faith That Property Developer the Neil Group Took When It Acquired Rural Land on Auckland's North Shore from the Housing Corporation Back in 1993

Article excerpt

The developer's success in progressively transforming 130 hectares of Albany dirt into a "city within a city" is a lesson in top shelf project management. (project management)

Instead of selling off disparate blocks of land to all-comers, The Neil Group had a "big" plan for its Albany turf. Based loosely on an Australian example and encouraged by Auckland's favourable growth demographics, the developer envisaged building a "city within a city".

What the demographics told The Neil Group was that, based on growth projections in both Albany and to the north in the adjoining Rodney District, the region lacked commercial and retail development. Being able to design and build a city from a big picture perspective, rather than the ad-hoc growth most cities experience, presented huge advantages, says special projects manager Phil Ainsworth.

Initial feasibility studies on the Albany site helped gauge retail and office requirements in general terms. Different scenarios were then drafted using cash-flow analysis to forecast a range of different outcomes. The project was then managed to ensure forecast outcomes were achieved within their respective time frames. But with the overall project expected to take 15 years to complete, detailed planning would be rendered obsolete over time. So, says Ainsworth, the Group's risk and return profile on the site was always going to be a moving target.

The key early concern was to get sufficient building activity going on which to create future momentum. Three key factors contributing to that momentum were:

* Massey University's Albany Campus: Located adjacent to the Albany Centre, it currently has 4300 internal students and this is expected to increase to 15,000 in coming years.

* North Harbour Stadium: An integral part of the Albany Centre, it's a multi-purpose entertainment and sporting venue.

* Northern motorway development: While two interchanges into the northern motorway were yet to be built, they knew it would happen eventually.

Developers like Neil prefer to be involved in the design and build phase before sites are on-sold. But in an attempt to get a stake in the ground, it opted to sell bare land for what would become two initial anchor sites: Pak'N Save (the largest supermarket in Australasia) and the site's first retail development, The Mega Retail Centre. The developer also agreed to sell bare soil to mall operator, Westfield's (formerly The St Lukes Group) for what could be New Zealand's largest mall.

Laying groundwork

The Neil Group initially concentrated on creating the infrastructure--roads, services, trees, greenbelt and other necessary amenities--to attract developments into the centre. Charged with overall responsibility for the Albany Centre, Ainsworth's job was to assign and direct a core team of five who met weekly to discuss outstanding issues.

Each member was assigned responsibility for key aspects of the project. Because the formerly rural land encompassed multiple titles, each with differing zoning criteria, the team's first job was an exercise in subdivision and rezoning.

With seven types of zoning, ranging from Business four (retail core) to Business 11 (allowing for high density residential)--subdividing presented its own challenges. Much of the team's early efforts were spent dealing with resource consents and complying with environmental codes. In fact, the current zoning on the overall Albany Centre site is the result of a submission process that's taken nine years to finalise.

Ainsworth and his project co-manager, Keith Maddison, are now, however, charged with selling the Albany Centre vision to the business community. And because the team was dealing with numerous people from several regulatory bodies simultaneously, the two managers decided that regular information sharing would play an important role in both communicating the vision and streamlining comprehensive site development. …

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