Lakeland Queen owner told to build new jetty, gift it to iwi, lease it back

For 36 years, the Lakeland Queen provided tourists and locals with opportunities to cruise and dine on Lake Rotorua. But for the last three, the iconic paddle boat has been sitting on dry land. Local Democracy Reporting's Laura Smith finds out why.

Terry and Raewyn Hammond operated Rotorua's iconic Lakeland Queen for 36 years until the Covid-19 pandemic forced the tourism business into hibernation, and 15 staff members were made redundant.

The pair now want to restore the business and need to replace their deteriorated lakefront jetty at an estimated cost of up to $460,000, but face what Terry Hammond views as a "preposterous" situation of being required to gift the new structure to iwi then lease it back.

Lakebed owner Te Arawa Lakes Trust says understanding the potential impact on the environment, water quality, taonga species and particularly regarding the dredging or lakebed disturbance required for the Lakeland Queen's channel, "we emphasise that any such action would be subject to approval from [the trust], who represent the interests of hapū and iwi as lakebed owners".

Rotorua Lakes Council says it has done all it can to help the Lakeland Queen owners and it and the trust say they communicated the process to Hammond.

The council kicked off its $40 million Rotorua Lakefront Development project in 2019.

It contributed $20.1m and the rest came via the government's Provincial Growth Fund.

The project included a revamp of the water's edge, but not the jetties used by tourism operators.

The council's attempt to get government shovel-ready funding for the jetties was unsuccessful, leaving operators to foot the bill.

'None of it makes sense'

The cost of a new jetty was finalised in 2022 and Hammond told Local Democracy Reporting the council confirmed he would need to pay the $345,000 to $460,000 cost.

He said he was told he would then need to gift the jetty to iwi and Te Arawa Lakes Trust would lease it back to his business. He understood he needed to pay for the jetty maintenance.

Hammond said he had "no idea why" this was necessary.

In his view: "The whole thing is preposterous".

He said at the start of the project and in preliminary discussions he understood a jetty would be built, and he would pay Te Arawa a lease to use it.

"Somehow it morphed into us paying and building the jetty after shovel-ready funding was not approved."

Hammond emailed the council last year asking whether, if he built the jetty, ownership would be transferred to the trust if it was to be leased back to him.

The council responded advising that Hammond vesting and leasing the jetty gave the trust "more ability to manage any stranded or abandoned structures if there are changes to operators".

It also said the council paid the trust for a licence to occupy sections of boardwalk that passed over the lake bed.

Hammond said Te Arawa Management Limited told him the iwi did not want him to operate from his usual position as to not disturb the lake bed. This was also confirmed by the council, he said.

Te Arawa Management Limited is the asset-holding arm of Te Arawa Lakes Trust.

He said he was told the trust was not in a position to build the jetty.

Hammond, 76, said he felt pushed out and he worried about the pair's retirement.

"We haven't had any income for three years. February 2020 when Covid hit, all our traffic ceased," he said.

"I've been trying to make sense of it for a few years now. None of it makes sense."

A 2019 memorandum of licence stated the annual rent would be $11,500.

It said the trust wanted to ensure any new structures on the lake bed were strictly controlled and consistent with its environmental and cultural aspirations.

The lease would cover 25 years and the Lakeland had the right of renewal for another 15, then 10.

There would be other annual fees.

Local Democracy Reporting put Hammond's concerns to Te Arawa Lakes Trust and asked why he would be required to pay to build the jetty, gift it and lease it, and whether he was given a reason for this arrangement.

Trust chief executive Daryn Bean said it appreciated the engagement and concerns posed for and by the Lakeland Queen owners and stakeholders during the lakefront development process.

"Despite the challenges posed by Covid-19 disruptions, the comprehensive redevelopment has significantly improved the quality of the lakefront, contributing to the restoration of mauri at specifically, Kōura Māwhitiwhiti."

He said understanding the potential impact on the environment, water quality, taonga species and particularly regarding the dredging or lakebed disturbance required for the Lakeland Queen's channel, "we emphasise that any such action would be subject to approval from [the trust], who represent the interests of hapū and iwi as lakebed owners".

He said the council and trust were addressing safety concerns related to several jetties.

Bean said the trust maintained open communication with the Lakeland Queen owners and other organisations.

"Multiple engagements have taken place, and discussions, including the potential sale of the business, which have been ongoing.

"We understand all commercial operators received potential lease terms before the council's demolition work began, underscoring our dedication to transparency and collaboration."

Council infrastructure and environment general manager Stavros Michael said the council did not pay to build jetties used exclusively by commercial operators and had not offered this for the Lakeland Queen.

He said Hammond was "well aware of the council's position" and had been told the jetty replacement cost would sit with him as the commercial operator.

He said staff had "numerous discussions" with Hammond over the years and the trust's process for lakefront jetties was explained.

Hammond would be transferred the resource consent once the jetty was fit-for-purpose.

Michael listed ways the council had helped Hammond, including the attempt to secure government funding and paying to commission potential concept designs for the jetty.

Among other examples were waiving slippage charges for the Lakeland to dry dock since 2021, as well as extensions for the permit to keep it there for Hammond to consider his options to sell or remove it.

He said an independent engineer assessed the lakefront's commercial jetties and in 2022 found the Lakeland Queen's was in "poor" to "unsatisfactory" condition, recommending repairs or replacement.

The council offered to pay to remove the old jetty when the boardwalk was finished, but this was not taken up, Michael said. It also offered to cover consenting costs, and council contractors had repaired loose boards on the jetty.

"The council has done all that it can to assist Mr Hammond."

- Local Democracy Reporting is Public Interest Journalism funded through NZ On Air