My Account
Self-described adrenalin junkie Leigh Hopper thrives on high intensity sports like motor racing and flying, but it is in business that he says he has faced some of the most hair-raising risks. As the managing director of Hopper Developments – a business started by his father and uncles – he is best known in Orewa for his part in developing Maygrove Retirement Village in the 1980s and more recently for promoting a higher density model of development for the Orewa beachfront. He spoke to Terry Moore about bureaucracy and the developers’ Holy Grail.
I’ve had a skinful over many years of consultation, submissions, hearings and court time across several councils. We are over regulated as a nation and excessive process and consultation delivers a level of risk that makes development not viable. Young people are leaving NZ because they are unable to find work – largely because the private sector has been held back from creating jobs and wealth. If you want prosperity, it comes from wages and salaries from an employer who has put together their toil, intellectual property and capital to produce goods and services and employ people. NZ has an entrepreneurial spirit that has stood us in good stead and led to a good standard of living, but it has been slipping because of excessive regulation. I think of it as a mountain of DURT (delay, uncertainty, regulation and taxation) that is put in front of progress – move the DURT and the capital will flow. No one will commit their capital and hard work if there is too much risk and process involved. There was a huge increase in the bureaucratic non-productive sector under the Labour government, and that has sucked the capital from the private sector. Of course you need some regulation, but excessive regulation stifles economic growth. John Key knows that and part of this government’s strategy is to reduce bureaucracy. High rates and excessive local government regulation are among the results of an increase in the non-productive sector. Thirty years ago, a District Plan was bedtime reading – a few inches thick. Now it’s almost a metre thick. Councils used to have one planner and a whole raft of engineers out building roads and sewage and other infrastructure but now it’s the other way round and that approach has provided more regulation. Those processes have to be simplified and some councils are doing that. The Thames District Council, for example, are moving towards less regulation and a new culture with a mission to reduce rates and simplify processes and costs to enable development in their region.
Our family has lived on the Hibiscus Coast since the late 1920s. I was born and bred in Vipond Rd in Stanmore Bay and went to Whangaparaoa Primary. My father Ian developed Pauanui, so the family moved there in 1969. I used to cross the river each morning on a tractor with pontoons on it, which my old man made, then go by bus to Thames High School. My three younger sisters still live in Coromandel. I came back to Orewa and still live here because that’s where my business is. I learned civil construction on the job, working six days a week for my father’s company, and re-established that side of Hopper Developments in 1990. My focus these days as managing director is on management and the overall design of our projects. We specialise in retirement, resort and marina/canal development such as the ones at Pauanui, Whitianga and Marsden Cove. In partnership with others, we were seeking to build some comprehensive medium rise residential near the Orewa foreshore and it was a frustrating process. Orewa has been identified in various regional development strategies over the years for its development potential and for intensification. There are a number of things that have to align to make intensive housing viable economically – the land needs to be flat, near services and in a relatively high value suburb and the beach is a big attraction. It doesn’t pay unless all these things are in alignment. Overall I am an advocate of providing more intensive development opportunities – it is not for the whole market, and doesn’t suit young families, for instance, who want a backyard, but does work for older folk and empty nesters looking for a more manageable property, close to services and social interaction. What the community and planners have to realise is that there are market influences on anything we build. Nobody will pay for a high-rise apartment unless they are getting amenity value, such as an attractive location, and nobody is going to risk building something unless they can see a profit in it, so everything becomes a trade-off. If you don’t want height, you have to spread out and that would mean removing trees and green spaces. Taller, thinner buildings supply the yield with lesser site coverage, and that is my preference because it produces a better landscape outcome at ground level. Sustainability is just one element of the regulatory process – the more you want to build that in, the more it will cost and often it’s more than the market is prepared to pay. Every developer is looking for the Holy Grail – how to build a property that everyone wants for half the price; trying to reach that goal is how you keep a competitive edge.
I have seen three Councils come and go and each one has looked at reviewing its District Plan to make intensification possible. The Rodney District Council went through the most extensive consultative process to give effect to its Orewa Plan (Variation 101) so the Environment Court process that threw out the Variation was very disappointing for us. It will be interesting to see what happens with Auckland Council’s Spatial Plan, which shows they want 70 percent development in existing built up areas – this is consistent with what we wanted. What we will watch with interest is whether the area plans are consistent with the spatial plans and actually deliver the planning instruments and zoning to attract risk capital so developers can pursue intensification – at the moment I’m not convinced. If developers are to accept the risk, there will have to be plan changes that make more intensive forms of development permitted or controlled activities, not subject to notification. That is what the Council needs to do, but whether it has the guts is questionable. We have blown more than $1 million on Variation 101 and we are not prepared to go down that road again and pursue that model unless plan changes make it viable.
The global financial crisis has made life in the development sector tough, particularly in the coastal region where it is often a discretionary product for holiday makers – that spend is down. Land development goes through peaks and troughs and it is possible to do well on a short-term development, provided you have the cycle right. Several companies have gone to the wall and arguably banks contribute to this by lending more than they should. If the development has more equity and less debt they are more likely to survive. We are in long-term projects of 10-30 years, and in that situation you have to be geared to withstand the shock of extended downturns. Recently we have been putting effort into broadening our market to attract international interest in buying lifestyle properties. We are so far away from the wealth of the Northern Hemisphere that it is very difficult for people to justify the outlay of visiting regularly. Immigration policy does not make it easy either and we are lobbying the Minister of Immigration regarding relaxing the criteria to attract high net worth individuals who we believe can make a positive contribution to the country’s economy. These are long-term strategies. Once a development is complete, you don’t just walk away – we put effort into building the social and cultural value of those communities, such as organising events, market days, car and boat shows. It makes it a vibrant place to want to live and be. Developers are not the bad guys: development provides a variety of built forms that provide richer cultural and social outcomes.
My days off tend to be at one of our coastal properties, combining work and play – boating, diving and fishing. I also enjoy aviation and have had a pilot’s licence since I was 21, for helicopters and fixed wing aircraft. A few years ago I took some World War II veterans who live at Maygrove Village for a flight. They were very frail, and it was great to see the smiles on their faces showing that the flight brought back a flood of memories for them – particularly when we did some tricky manoeuvres. I am also a keen rally driver and started racing in Targa NZ rallies with my son Stace. He lost his life in an aircraft accident two years ago when he was 27 years old. He was an awesome young man and a real adrenaline junkie. Initially we competed together in the Targa rallies, but I kept wrecking cars, so then we raced against each other in modified 50 horsepower Subaru cars. I have been racing his car with my other boy, Gray, as co-driver, ever since Stace died. We won the Targa Rotorua last year, came second in the Targa Bambina in February and also came second in last month’s Targa Rotorua, so we have one of the fastest Subarus in the country. I haven’t sustained any serious injuries in crashes – only to my pride and bank account. Gray is 27 and was diagnosed with osteosarcoma, a bone tumour, at the age of 14. They had to remove a portion of bone in his left leg and he now has an internal prosthesis. He’s had 11 operations and quite a bit of trauma, but recently had what we hope was his last operation. My daughter Shana is 23 and has just finished exams for her BCom. My family ethos, which has come down through the generations, comes from the realm of hard toil and a good work ethic. Work can be frustrating and hair-raising at times, but it is also exciting and building things is quite rewarding when you get it right.
