Several well-known Wellington businesses are raising concerns over a proposed change to the city council's rates system, warning that the move could significantly increase their annual costs at a time when many are already struggling.
According to a report by 1News, Wellington City Council is seeking public feedback on changes to how it calculates property rates, including a proposal to shift from a capital value-based system to a land value-based approach.
Under the proposed model, Moore Wilson's, a prominent food and grocery retailer that has been part of Wellington's food scene for more than 100 years, could see its annual rates bill increase by around $500,000.
Director Julie Moore described the potential increase as "not sustainable", adding that business was "tough as it is", 1News has quoted.
"It's a kick in the guts for the council to even propose this," she said.
Supporters of the proposed change argue that a land value-based rating system could encourage more housing development and help make homes more affordable. However, the proposal has raised concerns among businesses about the financial impact, as reported by 1News.
Wellington Mayor Andrew Little said the council was seeking public input before making a decision.
"Get your submissions in, that's the way we get to make a good decision," Little said, as quoted by 1News.
The potential impact could also be significant for businesses in the city's entertainment and hospitality sectors. Trinity Group owner Jeremy Smith said the proposed changes were "absolutely crazy", "ridiculous", and "ludicrous".
He estimated that the rates for the group's Courtney Place business could increase by between $700,000 and $1 million, warning that businesses in the area were already facing difficulties.
"The Courtney Pl business is going to go up somewhere between $700,000 and a million dollars. And each of the businesses down there are struggling to survive as it is."
Brooklyn Cinema, operated by Penthouse, is also concerned about the financial implications, estimating that its annual rates could rise by $77,000.
General manager Fergus Kisby-Macleod said the cinema would need to significantly increase sales to cover the additional expense.
"About 600 ice creams a week extra, and then also 80 tickets a week on top of what we already sell", 1News has quoted.
He also expressed concerns about the timing of the proposed changes, given the uncertainty surrounding future business conditions.
"Already we don't know what trading conditions are going to be like next year, depending on the government and what happens with the public sector, especially in Wellington," he said, as quoted by 1News.
Little acknowledged that some residents considered land value-based rates a fairer approach, but said the council had yet to reach a conclusion.
"We just don’t know".
"I just want to deal with the issue, come up with a conclusion and put it to bed once and for all", 1News has quoted.
However, Wharangi/Onslow-Western Ward councillor Diane Calvert argued that the city should focus on more immediate economic challenges.
She said the council "has more pressing problems" to address.
"We need to get our economy thriving. That will encourage more people to be here," she said, as quoted by 1News.
The council is also considering other rating changes, including a proposal that would reduce rates for commercial properties.
Public submissions on the proposals were due by Sunday, with councillors expected to discuss the feedback next month.