Business owners unhappy City Rail Link put in charge of $12 million hardship fund

Friday, 3 September 2021

Heart of the City appealed in January to transport minister Michael Wood for financial support for businesses whose revenue had plummeted as a result of the noise, smell and disruption of the City Rail Link construction. The minister’s long silence led to protest signs in shop windows: “Minister Wood, how much longer do we have to wait?”

A $12 million hardship fund is to be set up for businesses that have been negatively affected by the construction of the City Rail Link.

The fund was announced by Transport Minister Michael Wood and mayor Phil Goff on Friday morning, and while it was welcomed by the city’s business association, it said it was “long overdue”.

But local business owners are horrified the fund will be controlled by City Rail Link, which Shobhana Ranchhodji, owner of florist Roma Blooms on the corner of Albert St and Victoria St West, said had neglected them for so long.

City Rail Link (CRL) is the largest transport infrastructure project in New Zealand, costing $4.4 billion and taking eight years to build. It is expected to be complete by 2024.

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Wood said the project would deliver a “step-change” for the city’s public transport once complete but acknowledged it had caused disruption around its Aotea, Karangahape and Mt Eden sites.

The disruption caused by the project’s construction would continue for some time – which is why the targeted fund had been set up, he said.

“The Government and Auckland Council have listened to businesses and while the detailed eligibility criteria is worked through, advance interim payments will be made for those that are likely to be eligible for payment based on a high-level independent assessment,” Wood said.

In June, Shobhana Ranchhodji, owner of florist Roma Blooms, spoke at protests by business owners whose customers had been driven away by the noise, dirt, dust and smell of the Cit Rail Link construction work.

“There will be a significant value uplift for property owners once the project is complete, so it’s our expectation they will be working to support tenants as well.”

Wood said it was “unfortunate” a hardship fund wasn’t set up when the project started – and his expectation was that schemes such as this set them up in advance of any other major urban projects.

Minister Michael Wood’s decision to establish a $12 million hardship fund for businesses impacted by the City Rail Link construction comes a month and a half after a dozen business owners met with Labour MP Helen White. Restaurant owner Andy Ariano is pictured in front.

Wood said eligibility criteria would be finalised shortly by City Rail Link.

City Rail Link is in charge of the construction, but Ranchhodji said: “The fund looks encouraging, but City Rail Link is part of the decision-making. How can this happen? They have done such a bad job for us so far.

“How can the Government and the Council give them the right? They have neglected us for so long,” she said.

The local businesses believed Wood and Goff had only set up the fund when media coverage of owners’ suffering became embarrassing.

Ranchhodji said the fund would come too late for some business owners, whose businesses had closed.

Goff said the decision to create the hardship fund reflected the scale of construction and how long CRL would take to be complete.

The fund would cost ratepayers and taxpayers $12m, but Goff said he believed that was fair given the threat to small businesses caused by the disruption.

Andy Ariano pictured in July showing auctioneers where they could park up their truck in order to pack up his Albert St restaurant, which he was closing after a decade. He is a victim of the Auckland’s City Rail Link construction works which have killed his business.

“A targeted hardship fund is essential,” said Goff, who met with Ranchhodji and other local business owners after media coverage ramps up in July.

Despite having their incomes much-reduced as shoppers avoided the area around the City Rail Link construction, business owners continue to have to pay overheads, including rent to their landlords.

Goff said: “We also expect property owners who will receive windfall profits from the value added by ratepayer and taxpayer funded infrastructure to provide assistance through rent relief to these businesses.”

Viv Beck chief executive of CBD business association, Heart of the City, welcomed the “overdue” fund but said an independent panel to determine how it would work was needed to ensure it was fair.

“While this is long overdue, it is great that a decision has now been made,” Beck said.

“Financial support is desperately needed for businesses that have been massively impacted by this large scale and long-term project, and we hope this does bring the relief that is needed.

“The detail will be important, and we stress the importance of the need for an independent panel to determine how the scheme will work.”

Beck said she had spoken to business owners about the hardship fund on Friday morning and there was a degree of caution given what they had dealt with already.

“There will also be disappointment that the back dating does not go back to the start of the contract as we requested,” Beck said.

Heart of the City had called for a $50m hardship fund.

Payments would be backdated to February 1, 2021 and businesses must provide evidence to show they meet the criteria of suffering “genuine” hardship.

A review would be done in late 2022 to see whether more money needed setting aside to support businesses in the following two years.