Otago’s regional council stands accused of rubberstamping non-notified water consents for a new hotel planned near Queenstown without adequately considering the effects on a nearby scenic lake. David Williams reports.

After years of being lobbied to increase its efforts in Queenstown, last year the Otago Regional Council got the message. It stood accused of dragging its feet on multiple issues, including public transport, wilding pine control and water monitoring, while squirrelling money away for a new Dunedin headquarters. There was fighting talk about creating a unitary authority.

The pressure told and the floodgates of ratepayer money opened. The council agreed to re-open a council office in Queenstown and subsidise public transport in the Wakatipu Basin.

Cash was splashed on water, too, with $100,000 for research on lake snow and a promise to work with communities on lake restoration work, including Lake Hayes, near Arrowtown, one of the country’s most photographed lakes.

This year, the council announced a decade-long plan to spend millions more on water monitoring, including installing a buoy at Lake Hayes. That delighted the Friends of Lake Hayes Society, a group that has been pushing for a buoy for years.

But problems persist. Over the previous year, algal blooms caused the lake to be closed to swimmers and elevated E.coli levels were discovered. In June last year, dead trout were found in Mill Creek, Lake Hayes’ main tributary.

In August, the Otago Regional Council’s technical committee discussed three possible ways – flushing, capping and destratification, according to the Otago Daily Times – to improve Lake Hayes. Now, there’s concern the momentum towards an environmental clean-up will be lost, or reversed, because of a large hotel planned on the banks of Mill Creek.

Quiet consideration

As regional councillors were publicly discussing ways to clean up the lake, the council’s staff were quietly considering consents for a proposed 380-room hotel, next to Arrowtown’s Millbrook Resort, in an area known as Waterfall Park.

Developer Winton Group – through subsidiary Waterfall Park Developments Ltd – dubs Waterfall Park a forgotten treasure, home to a 30-metre waterfall that’s out of public view. The company wants to build a four-plus-star hotel on the site in four blocks. The complex will also feature two restaurants, a bar, conference centre, wedding chapel and wellness centre. Heritage buildings at the adjacent Ayrburn Farm, settled by Scotsman William Paterson in 1862, will be restored and repurposed.

(Waterfall Park Development Ltd has asked the council to re-zone a parcel of land next to the planned hotel so it can build up to 200 houses. Other Winton Group projects in Queenstown include Bridesdale Farm, a subdivision fast-tracked by the local council, and the high-end Lake’s Edge subdivision, adjoining the Hilton Queenstown Resort & Spa complex.)

Last month, the regional council approved various work to be done on Mill Creek. The consents weren’t publicly notified because the council assessed the effects of the work as minor.

Council chief executive Sarah Gardner is quick to point out that the Department of Conservation (DOC) – which has statutory responsibilities for native aquatic species – gave written, unconditional approval to the consents. (This reliance on DOC as an environmental backstop mirrors another controversial consent approval, for the extension of a Queenstown skifield, that is now subject to a judicial review.) Fish and Game and iwi demanded conditions, including undertaking the work outside of fish spawning.

The work approved at Waterfall Park includes widening, deepening and re-shaping the creek, creating ponds through a series of boulder weirs. Flood-protection walls will be built, as well as building seven bridges and two culverts. Winton Group, a company associated with Chris and Michaela Meehan, plans sediment and erosion controls and will temporarily divert the creek during widening work. Revegetation and ecological work is also planned. (Winton Group couldn’t be reached for comment.)

The regional council’s own analysis shows Mill Creek and Lake Hayes already exceed some limits or targets for water quality, such as phosphate, turbidity and total nitrogen. For other contaminants, such as nitrate and E.coli, there’s little or no headroom for the water bodies to take more.

If Lake Hayes’ poor state is to be reversed, contaminants from within its catchment, which starts on the slopes of Coronet Peak, need to be reduced. The main culprit for adding nitrates and phosphorus to the lake is Mill Creek. Increasing development, population growth and land-use intensification won’t help – especially as stormwater from Waterfall Park’s hotel complex will flow into the creek and, eventually, Lake Hayes.

“We believe there is a high likelihood that sediment will enter Mill Creek and ultimately be deposited in Lake Hayes.” – Andrew Davis

Friends of Lake Hayes Society committee member Andrew Davis, who works for a global investment management firm, accuses the regional council of being cavalier by granting non-notified consents in a sensitive environment. Speaking personally and not on behalf of the committee, he says: “Lake Hayes is one the region’s most precious resources, we need our regulators to start affording the lake the protection it rightly deserves.”

Davis points to problems earlier this year with stormwater runoff at Wanaka subdivisions Northlake (another Winton Group development) and Hikuwai as a sign that new developments are struggling to prevent sediment run-off. The district’s chief engineer, Ulrich Glasner, told the Otago Daily Times in May the performance of some stormwater infrastructure, particularly in new developments, did not meet the council’s expectations.

Davis tells Newsroom: “With the current Waterfall Park development we believe there is a high likelihood that sediment will enter Mill Creek and ultimately be deposited in Lake Hayes.”

Council boss Gardner says the effects of the Waterfall Park proposal were assessed as minimal. “It is correct that if sediment enters Mill Creek, the receiving water body will be Lake Hayes.”

Public notification of consents isn’t mandatory, she says, and the effects on the Friends of Lake Hayes “from the specific activities considered” were assessed to be less than minor. As the effects of the applications were considered “minimal”, Gardner says further assessment of the impact on Lake Hayes wasn’t required.

She adds: “We have not assessed the effects of all activities that may be undertaken in the development.”

Increased pollution in Lake Hayes could lead to more frequent closures for recreational activities and increase the cost of restoration efforts, which already seem likely to run into the millions of dollars. Inevitably, the clean-up costs will largely fall on the local community.

Friends of Lake Hayes has made a submission to Queenstown’s district council, which is considering Winton Group’s resource consent for the hotel development. Regional councils deal with environmental-based consents, such as those affecting air and water, while district councils manage land-based subdivisions and developments.

Waterfall Park Developments originally lodged consents jointly to both councils, asking them to be publicly notified and heard together.

The regional council (ORC) “staff recommending report”, written on August 30, notes, however: “On advice from the original job manager, the two consent processes were unbundled as it was considered that the ORC consents could be processed on a non-notified basis.”

To the district council, the society challenges the developer’s claims that the in-stream work, stretching for hundreds of metres of Mill Creek, will have a less than minor effect on the immediate environment and downstream. (The actual channel works extend for about 135m.)

During construction, the submission says, there’ll be increased sediment and nutrient discharges into Lake Hayes. “We are of the view that in spite of all the assurances provided by the applicant there is a significant risk that designs and structures may not perform to design when tested by the very powerful and unpredictable natural forces that are applied during high-intensity rainfall events.”

(An ecological peer review, by 4Sight Consulting, says with appropriate controls, and if best practice is followed, sediment discharges from construction work “can be expected to be minimised”.)

Vulnerable fish

Some of those most affected by the Mill Creek works are native galaxiid fish, koaro, that live in Lake Hayes but spawn in Mill Creek. Slowing the water flow and creating pleasing-looking pools will help trout – something Fish and Game endorses. But the koaro, classified as “at-risk, declining”, prefers fast-flowing riffles.

The developer’s ecological expert said the potential effects on native fish are considered to be minor.

DOC’s Wakatipu operations manager Geoff Owen tells Newsroom the department’s approval was given on the basis that the works would improve the outlook for koaro in the long term. That would be done through native riparian plantings, culverts allowing for fish passage, weed control and a condition to avoid works in the stream during the koaro spawning period.

“DOC believes the application as it stands would result in habitat that would be better for native fish,” Owen says.

However, an ecological peer review of the hotel proposal provided to regional and district councils seems to contradict that view.

The 4Sight Consulting report, completed in August, says while the works are unlikely to have a significant effect on koaro, the loss of preferred habitats “have not been adequately considered by the application”.

“The installation of three of the six proposed aesthetic weirs will … result in the loss of areas of preferred instream habitat for the ‘at risk’ koaro and may impact potential spawning habitats. The weirs will result in additional habitat for brown trout, a predator of koaro.”

To offset the habitat loss, the 4Sight report says a riparian planting plan should consider enhancing the remaining habitats preferred by the fish. (Regional council boss Gardner says the “localised impacts” of habitat loss will be mitigated and monitored by consent conditions. Some koaro habitat will be enhanced and protected through activities like riparian planting.)

Newsroom asked the department to comment on this apparent contradiction but no reply was received by publication deadline.

In August, Conservation Minister Eugenie Sage introduced an amendment bill to Parliament aimed at better protecting indigenous freshwater fish, most of which are found nowhere else in the world. Acknowledged problems with protecting threatened, endangered and vulnerable fish species include water management by regional councils and council enforcement over habitat destruction.

David Williams is Newsroom's environment editor, South Island correspondent and investigative writer.

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