Tauranga's unstoppable riseby Rod Vaughan
A reluctant rich-lister who grew up in a Naenae state house has helped propel Tauranga from sleepy hollow to economic powerhouse.
To some, the city looked like a large rest home by the sea, but Adams saw a place of opportunity, a town ready for economic development. Though he had a wife and two young children to support, he made the bold decision to turn his back on a career as a civil engineer in the Hutt Valley for a life running kiwifruit orchards in the provinces.
It could, and perhaps should, have turned to custard. A recession was about to engulf the country as a result of Prime Minister Rob Muldoon’s chequered record of financial stewardship. But Adams, then 32, took it all in his stride and, over the next decade, went on to become the biggest player in the kiwifruit industry, owning or managing 45 orchards and 11 packhouses and coolstores, and employing 200 people. At one stage he owned a million trays of kiwifruit and was the largest private owner of kiwifruit orchards in the world.
Just how someone who was raised by a solo parent in a state house in Naenae ended up on the National Business Review Rich List as Tauranga’s largest property developer is a remarkable story.
Adams is modest about his achievements, but possibly more than anyone else in recent times he has put his stamp on Tauranga and helped propel it from little more than a sleepy hollow to an economic powerhouse about to overtake Dunedin as the fifth-largest city, if it hasn’t already. Statistics New Zealand’s most-recent population estimate, from June 2015, shows Dunedin on 125,800 residents and Tauranga on 124,6000. But local talk is the Bay of Plenty city has now hit 128,000.
His family-owned company, Carrus, has developed 4000 sections in Tauranga, not to mention a similar number elsewhere in the North Island, and was the driving force behind subdivisions such as the suburb of Aotea in Porirua, as well as The Lakes and Bethlehem Heights in Tauranga.
Adams’ good fortune has been Tauranga’s good fortune and today the thriving city has pipped Auckland to become the country’s fastest-growing regional economy. This has not gone unnoticed by Aucklanders, who in the past six months have descended on Tauranga in their droves, chasing jobs, homes and investment opportunities.
Building consents worth $60 million were issued in Tauranga and the Western Bay District in December, the highest monthly total since 2003. House sales leapt by 38% in 2015 and the median house price rose from $417,500 to $475,000.
Of greater significance is a Statistics NZ forecast showing that the Bay of Plenty has the highest levels of employment growth, outstripping even Canterbury. Its annual employment growth of 13% is well above that of Waikato and Auckland, the other two members of the so-called “golden triangle”, which recorded 9% and 3% respectively.
It’s little wonder that Andrew Coker, chief executive of Tauranga-based economic development organisation Priority One, is upbeat about the region and where it’s heading.
Tauranga’s economy is in transition, he says. Historically reliant on population growth as its key driver, it is showing signs of “a substantially more diverse, robust and vibrant economy”.
Coker dismisses any suggestion that Tauranga is at the start of a boom-and-bust cycle, saying the economic fundamentals are rock solid and it’s now on track to becoming a world-class city.
The city remains a haven for retirees, but there is ample evidence that it’s in the throes of redefining itself as a national hub for innovators, entrepreneurs and elite athletes.
Coker is enthusiastic about the Bay of Plenty’s “innovation ecosystem”, which, he says, is building Tauranga’s reputation as a base for entrepreneurial activity. Already up and running are the country’s most active angel investment network, Enterprise Angels; technology incubator WNT Ventures, funded by Callaghan Innovation; and a number of privately developed innovation parks.
Business is certainly booming in the Bay of Plenty. Its biggest horticultural industry, kiwifruit, has shaken off the scourge of bacterial disease PSA and Port of Tauranga is handling about five times the export volumes of Auckland.
Port chief executive Mark Cairns says it’s about to become the first New Zealand port to host the new generation of super container ships at low tides. These vessels are due to make their appearance in Tauranga later this year.
Cairns says the New Zealand Shippers’ Council estimates benefits of more than $330 million annually to exporters, as well as the creation of jobs through the greater cargo volumes at Tauranga.
Adding to the region’s boost, is a sports-oriented University of Waikato campus in the centre of the city, nine years in the planning. It is trumpeted as a game changer by Adams, who is on the university’s council and a member of the project group that’s been driving it. A handy rugby player who represented Wellington in his early days, he is keen to make Tauranga a centre of sporting excellence with facilities that can be used by elite athletes from around the country. The city’s Blake Park is already home base for Sir Gordon Tietjens and the NZ Sevens team, and Adams wants to attract top players from many other sports.
To achieve this, he has helped fund the establishment of a high-performance sports centre at the campus, where students can study for degrees in sports science and sports management up to PhD level.
The campus will open in 2019 and will cater for about 2000 full-time-equivalent students, who will generate about $60 million a year in revenue. A multiplier effect is expected to confer an economic benefit of about $250 million a year. Adams says this will “reignite” the CBD, where civic amenities are either lacking or in need of revitalising. He told the local newspaper recently that the city centre was “a disgrace, with many buildings not fit for purpose”.
“It lacks the soul required to attract people into the city and looks and performs like an outdated village,” he said in the Bay of Plenty Times. “Tauranga has some of the best natural assets in New Zealand, but has about the worst standard of civic amenities of any city in New Zealand, even being surpassed by small towns like Taupo and smaller cities such as Napier and New Plymouth.”
The outburst prompted long-serving Tauranga Mayor Stuart Crosby to agree that “part of the city is looking old and tired”, adding that “a journey of transformation” was under way.
But he blames many property owners for refusing to upgrade their buildings to a modern standard.
“Our job as council is to invest in our public facilities and facilitate commercial enterprise, but there is a point where the commercial sector needs to make sound investments in order to stimulate the local economy and meet the changing needs of our community,” he says.
Crosby points out that the council has “historically invested” $15-$20 million in waterfront and streetscape development and a further $8 million is budgeted over the next five years.
“We’re partnering with the private sector on several major projects, with $60 million in commercial and retail development under way in the city centre and an $85 million University of Waikato tertiary and research precinct planned for the city centre.
“Additionally, we’re investing $27 million in car- parking capacity in the city centre with 600 to 650 new car-parking spaces, as well as constructing a purpose-built $55 million Tauranga Harbour marine precinct.”
Crosby, who is not seeking a fifth term as Mayor but is hoping to gain one of four Tauranga seats on the Bay of Plenty Regional Council, says the council is happy to keep working with the private sector to transition the city centre from a retail space to a commercial hub. Whether this cuts much ice with locals is uncertain. Adams has blamed not just the current but previous councils for not providing the city with the amenities he believes it deserves.
“Existing elected members have been too timid to make the hard calls that they were elected to make,” he says. “Keeping rates artificially low in the misguided belief that this will get councillors re-elected has resulted in a mismatch between residential growth and lack of civic amenities.”
And in a clear warning to councillors, he said: “If successive elected members don’t commit to an early start to the required civic amenities, it will become a focus of this year’s local body elections.”
COUNCIL “UNINTERESTED”What riles Adams is that the council appears uninterested in his plan to further transform the CBD through a collaboration by the business fraternity and the city council. The plan was hatched last year when he formed the Civic Amenities Group (CAG), a conglomeration of business people, philanthropists and local luminaries such as Dame Susan Devoy.
Under his chairmanship, the group proposed a $172 million revamp of the CBD to be funded in part by people such as him. It would have included the construction of a new civic centre, museum, sports stadium and hotel.
The council’s administration building is closed because of toxic black mould and staff are temporarily working out of three buildings, so the need for a new civic centre is clear. But despite such pressing matters, the council has not taken up CAG’s offer or, if Adams is to be believed, shown any real interest in discussing it.
He says he’s frustrated, especially when it’s suggested by naysayers that ratepayers will be saddled with huge debts as a result of the development. He maintains the council will have to stump up only about 15-20% of the overall cost of the projects.
“A new civic centre costing $35 million could be funded with a community bond that all ratepayers could invest in,” he says. “This would avoid the council having to borrow $25 million to fix the existing building.
“The proposed amenities will add to the financial well-being and fabric of Tauranga and, if we don’t provide them, we will stop attracting the well-paid new residents coming from Auckland and elsewhere.”
Adams’ impatience with the anti-progress brigade is one of many traits he shares with Sir Bob Owens, who ruled the roost in Tauranga a decade or so before Adams went to live there.
The outspoken Manchester-born seafarer arrived in the city just after World War II with hardly a penny to his name. But starting with one forklift, he built up a giant freight company and made a fortune, much of which he ploughed back into the community. He became mayor of both Tauranga and Mt Maunganui and was instrumental in building the harbour bridge that links the two settlements.
Adams is also driven to make his mark on the city, but unlike Owens has no aspirations to run for mayor, a job he believes should be left to a younger person with vision and energy. He sees himself as a catalyst for change and is not afraid to rock the boat to get things done.
It would be easy to characterise him as a hard-nosed businessman hell-bent on furthering his own interests, even at the expense of others, but locals say this could not be further from the truth.
Adams has never forgotten his humble roots growing up in a state house in Naenae in the 1950s and early 1960s.
His parents split up when he was 11 and his mother, a tailoress, was left to bring up him and his older brother in extremely modest circumstances.
“There were no support services and allowances for solo mothers, so my mother needed to work full-time to support us.
“There was generally enough food to put on the table, but there were certainly no extras.”
Despite the privations he has many fond memories of growing up in a state-housing area full of “bodgies and widgies” and their motorbikes. “The reality was there were no drugs, except cigarettes and alcohol, employment was plentiful and crime was almost non-existent compared with today.”
He attended Naenae College, describing himself as “not a high achiever, just middle-of-the-road”.
“However, between my mother and some of the teachers I was lucky enough to encounter, I learnt some valuable life skills and a desire to do better in my life, whatever it was to be.”
With no money and no bursary, university was out of the question when he left school in the sixth form, but he was lucky enough to get a job as an engineering cadet with the Wellington Harbour Board. It was a time of great change on the waterfront: new wharves were being built and infrastructure was being developed to meet the challenge of containerisation.
Adams thrived in such an environment and within eight years not only was a qualified civil engineer but also had qualifications in business management and dispute resolution. By 1980, he was in private practice in Lower Hutt, designing, pricing, surveying and managing all manner of engineering projects around the country.
Then his life took a dramatic turn as a result of an investment he made in the burgeoning Bay of Plenty kiwifruit industry. When it became apparent that some of the orchards were being mismanaged, he spotted a business opportunity that would put him on the road to riches.
So with his young family in tow, he upped sticks and moved to the Bay of Plenty where, with business partners, he bought land and promoted syndicated kiwifruit orchards that would be managed by his company, Bay Horticultural Services. Within a decade, he was the biggest player in the industry and the rest, as they say, is history.
Adams attributes a large measure of his success as a businessman to the way he does deals. “Be firm but fair, always consider a business deal from the other party’s perspective and always leave something in the deal for the other party,” he says. “If you short-change someone on a deal, you’re unlikely to have repeat business.”
Today, Adams is an energetic 67-year-old who could be enjoying the fruits of his success and perhaps swanning around the world in a super-yacht. But he doesn’t think of himself as a Rich Lister and has tried unsuccessfully for 20 years to avoid being included on the NBR’s annual list.
His sumptuous colonial mansion, complete with two Bentleys in the garage, attests to his wealth and he is the first to admit he enjoys some of the finer things in life that only lots of money can buy.
But as the saying goes: you can take the boy out of Naenae, but you can’t take Naenae out of the boy. And so it is with him and his wife, Cheryl, who’s been the love of his life since they met in the fifth form at Naenae College.
They’ve never forgotten their early days in the Hutt Valley and later in Wainuiomata, where Cheryl worked as a teacher and they had their first home. Giving back to the community is part of their DNA, which is why both have been heavily involved in philanthropic activities for much of their adult lives. Adams has supported a raft of organisations, including IHC, Women’s Refuge, Waipuna Hospice, Riding for the Disabled, Te Kura Correspondence School, Tauranga Boys’ College and a wide array of community groups and Maori trusts.
“There’s plenty of people out there who need a lot of help,” he says. “I get a buzz out of doing things to help others who aren’t in a position to help themselves. More buggers should be putting their hands in their pockets in this town.”
All of which is likely to bring a smile to the face of his 92-year-old mother, May, who lives just around the corner from him. Without the sacrifices she made to put him through Naenae College, his story could have turned out very differently. And many people in Tauranga and beyond would have been the poorer for it.
PROPERTY & PEOPLE
- Median Tauranga house prices rose from $365,000 (January 2015) to $440,000 (January 2016).
- Tauranga house sales increased 52% in the same period.
- Tauranga’s population rose 10% from the 2006 census to the 2013 census.
Sources: Reinz & Statistics NZ
THE MARXIST AND THE CAPITALIST
Paul Adams discovered early on that capitalists and communists can co-exist and need not be strange bedfellows.
It occurred in 1968, when he first locked horns with formidable Wellington trade-union leader and avowed Marxist Ken Douglas. Their encounter took place on a rugby field: Adams was playing fullback for Naenae against an intimidating Titahi Bay line-up, which had been bolstered by some senior players, among them a beefy Douglas.
Adams recalls that Douglas, a forward, “played his rugby in a similar style to the way he ran the Wellington Drivers’ Union, taking no prisoners”.
The pair later met across the negotiating table where Adams, as a tyro company manager in his late twenties, was up against Douglas in drivers’ award talks.
It was a daunting experience for Adams, who was in awe of Douglas’ imposing persona and legendary negotiating skills.
Despite the ideological divide between them, a level of mutual respect and understanding developed, which still exists.
Their paths last crossed a few years ago when Douglas, as a Porirua city councillor, dealt with Adams over a major housing development.
Adams says he found him to be “the most business-focused and disciplined councillor and also very supportive and fair. I respect his business acumen and he is actually a good bugger, contrary to views held by many in the Muldoon era.”
He also discovered that Douglas had lost none of his powers of persuasion as a former trade unionist.
“Ken was responsible for me becoming the sponsor of the very successful Norths Rugby Club in Porirua, which Jerry Collins played for and which TJ Perenara currently plays for,” he says proudly.
Douglas, whose commitment to Marxism has mellowed over the years, is now widely respected as a professional director, having sat on the boards of Air New Zealand and New Zealand Post, among others.
For his part, Douglas is equally impressed with Adams’ track record, telling the Listener he has “come to understand and appreciate [his] strengths and qualities” in the business world and in the community at large.
“He has consistently over the years in a quiet and often non-public way assisted a range of community organisations in pragmatic and practical ways.
“He very much reflects the energetic rugby player who grew up in the Hutt Valley, became a construction engineer, built roads and cities, led the evolution of high-quality housing precincts and always understood the importance of investing in skills and people development.”
BETTER CALL PAUL
“Every city needs characters like Paul Adams to stir it out of complacency and to get things happening.” – Stan Gregec, Tauranga Chamber of Commerce
“Paul does not appear to have any political aspirations but is extremely passionate about our city and ensuring we provide the amenities to make it attractive for continued population growth.” – Mark Cairns, Port of Tauranga
“It takes someone like him who can and will speak out to move particularly political leaders into a space where they take stock and see a much bigger picture.” – Anne Pankhurst, Mainstreet Tauranga
“Paul has a dream and a passion about creating a world-class city in Tauranga and has made a long-term commitment to contribute to this.” – Professor Alister Jones, University of Waikato
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