Another perspective on land

Monday October 08, 2018 Published in Letters to the Editor
Another perspective on land

I've read the regular letters in your paper from Tim Tepaki and feel compelled to offer some input. I am a Cook Islander by descent and am in the process of moving my life to Rarotonga to live on the land of my forefathers. My life has been spent in business and in the real estate world.

 

May I give some perspective on what seems to be a very seductive offer from the Merchant of Paradise.

It needs to be remembered that Tim is a developer. And it seems he's a good one. A developer’s role is to remove as much of the value of a piece of land from its owners and transfer some of it to a new owner. and in the process acquire a healthy profit for themselves. And so their main focus is on selling developments and land. The long-term success of a development is not their concern (witness the Viamaanga/Sheraton debacle - the fact that it never operated was not an issue for the developer - they did not care if it ever made a dollar as they were paid for the process, not its ultimate success).

The MOP - Merchant of Paradise will do what the name suggests - sell Paradise until there is none left then move on because that is what they do.

But the long-term success of these projects is important to those who own the land so Tepaki’s involvement in the discussion as to how the project will work is, in my opinion, uncomfortable and even inappropriate.

So, with respect to the deal I have a few thoughts to offer land owners. Please consider them when you look at the deals:

•  Firstly, $100,000 upfront per acre is a pittance over a 60-year lease. By way of comparison, 45 years ago my pay packet was $67 a week. That’s about $3500 a year. It was pretty good money back then. So it stands to reason that a lease for 60 years at $100,000 now, is going seem like a pittance as the years go on. Every Cook Islands family can remember a lease that was agreed years ago for just a few hundred dollars or less. (In my family there is a piece of land that was given up for a bottle of scotch). I suggest you consider taking a smaller upfront payment and get annual payments linked to inflation. This way you create cashflow and income for years to come and don't lock up your descendants’ land for immediate gain. Your land is actually worth millions and MOP knows this.

•  Secondly, 67 per cent of profit seems to me a complete fallacy.  It sounds great but means nothing. It is routine for large multinationals all around the world to find costs like management fees so that there is no bottom line profit to share (or tax). Big companies like Apple and Microsoft have been making suckers of countries like Australia with that one for years. Please, Cook Islands, don't fall for that one.

•   Consider increasing the percentage of gross turnover (1.5 per cent) - that is a percentage of every dollar in the till, because no organisation can hide from that. Take your royalty off the top number, not the bottom one.

•  Contributions to the community shared by the landowner? You must be joking, Tim. These should be made directly by the owners of the enterprises, not the land owners. Cook Islanders are naturally generous to a fault to their churches, and community organisations already. Corporate businesses should step up and do their part from their own income.

It is time for Cook Islanders to become prosperous. We are the custodians of a part of the world that is priceless and we have a duty to keep it safe for the generations to come. This duty was put on our shoulders by your ancestors.

People love this part of the world and will pay good money to come and enjoy it. We are all entitled to share in the prosperity that comes with that duty.

The traditional land leases of old are inappropriate for the 21st century. They were instigated in the 19th century to help Ariki share land with their people, not as a means to lose control of their lands for generations.

Tim Tepaki's own lawyer helped draft the Unit Titles Bill, which effectively sold the air above the ground. Use that legislation - landowners become the leaseholders.

I admire the way that Cook Islands is taking a long term, considered approach to the seabed - recognising the riches there and ensuring that a sustainable, long term use of it benefits all Cook Islanders. The land onshore is no less and perhaps more important and the same long-term view of it needs to be taken for projects of this magnitude.

Do not be browbeaten or rushed into yet another deal like the others that have deprived so many Cook Islanders of wealth which is rightfully theirs. On the surface of it, I believe this MOP plan is not worth your consideration - send them away and get them to give you a serious deal.

One last thought: beware of the Chinese and our fish supplies. The Chinese have all but fished out their own fish supplies through reckless disregard for keeping their fishing sustainable. They are eyeing fish everywhere in the world. Certain outer island projects are part of a plan to get closer to this rich resource too.

            John David

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