CCTO development kicks off

Published: 18 July 2024

Napier City Council today considered the first steps in forming a Council-Controlled Trading Organisation (CCTO) to manage its investment assets and resulting investment income.

Council’s objective in setting up the CCTO is to create an inter-generational investment portfolio that will benefit current and future generations of Napier residents. 

Napier Mayor Kirsten Wise says current and future funding challenges mean Council must think boldly and differently. 

“We can’t expect to see different results if we keep doing things the same way. The CCTO will set Napier up for a more financially sustainable future by managing our investment assets, such as Parklands property development and our leasehold land portfolio, in a way that maximises their financial return.” 

“Our goal is to reduce our reliance on rates funding. Continuous high rates increases are not sustainable for our community. We need to find new income streams to fund the services and facilities our residents want and need from us.” 

Public feedback was sought on the proposal during this year’s Three-Year Plan 2024-27 consultation. A majority of those who responded on this matter were in favour of introducing a CCTO to manage Napier’s investment assets.

The project plan to develop the CCTO acknowledges the feedback received from those who made submissions. These included ensuring social and ethical responsibilities were kept in mind, and that the CCTO would be set up in a transparent manner.

“Transparency during the CCTO’s establishment phase is important because in future, it will make commercial investment decisions outside of the public arena. Our workshops to establish the CCTO’s principles, values and governance structure will be open to the public,” says Mayor Wise. 

The first public workshop was held today, which set the scene and provided elected members with an overview of the set-up process.

Potential returns from actively managing Council’s investment assets are expected to be significant over the long term. Returns are expected to grow year on year, with around $8 million worth of income forecast from property and cash assets in 2034/35.  

“I see real benefits in having a team of professionals dedicated to managing the investment asset portfolio. We’ll be able to maximise the income we can generate from property development and enhance our ability to acquire new assets and grow the portfolio and its income over time,” says Mayor Wise.

The public workshop dates for next steps in the process will be notified on napier.govt.nz (keyword search #meetingagendas). It is anticipated that the CCTO’s legal establishment will take place in the final quarter of 2024/25, along with the appointment of a director.

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