This is a reflective scenario problem regarding negotiation. Please DO NOT answer this question if you are just going to give the definition, this needs to link with the scenario problem. Thank you

Scenario:

Infrastructure charges in Forest Ridge

Overview:

The following scenario gives you the opportunity to practice a two party negotiation that simulates an emotionally charged negotiation that may occur in relation to levying of infrastructure charges. The task requires you to act as a representative for a local council or a developer. You have been authorised to make a decision provided it fits within a specified scope. Your role is to attempt to come to an agreement that is most favourable to your employer, however you do not have to come to a final agreement.

The negotiation is more complex than previous negotiations. It comes with "emotional baggage" and you will need to negotiate more than one aspect, and make use of information exchange to understand the other side's position.

Background

Dispergo City Council (DCC) sits on the edge of one of Australias major capital cities. The council area is almost entirely suburban with a few big box style shopping centres, some light industrial areas, and a large area of rural and rural residential properties. DCC is pro-growth and actively seeks development in the city. Continuing demand for detached housing places considerable pressure on DCC to rezone land in the rural and rural residential areas to allow for suburban style development. These areas typically have limited or no water, sewerage, road or park infrastructure. DCC understands that releasing land without adequate planning may create future issues in relation to the efficient delivery of infrastructure. DCC therefore undertakes periodic local planning exercises to allow for the orderly release of new land for suburban development. These local plans typically outline the infrastructure required to service the future development.

DCC recently endorsed such a local plan for an area on its suburban fringe. The Forest Ridge Local Plan allows for the development of new homes at suburban densities of approximately 1 dwelling for every 500m². The plan releases enough land for a total of 4,000 new dwellings. The plan involved careful infrastructure planning and costings to ensure that the area could be efficiently serviced by the councils infrastructure networks. The plan area is hilly and is also partly impacted by flooding. The plan calls for a new 6ha sports park to be provided in the area. Parks of this nature need relatively flat land and DCC has specific requirements in relation to the degree of flooding they are willing to accept in their parks. This means that there is realistically only one possible site for the future park. The plan itself however does not indicate the location of the future park.

Under the relevant legislation the developer must provide the infrastructure required to service their own development such as local roads, sewer/water connections, electricity, and if large enough, local parks. The developer then also needs to pay a share of the trunk infrastructure that connects to the development but which is used by a wider catchment. This trunk infrastructure includes water and sewer mains, major roads, large parks such as sports parks, and community facilities such as libraries and meeting spaces. Councils can choose whether to collect infrastructure charges from developers and establish trunk infrastructure, or to require the developer to undertake the trunk works instead. In the later situation the cost of providing the infrastructure can be credited against the standard infrastructure charges that the developer would normally have to pay.

In this area DCC intends to build the required sewer and water mains, roads, and stormwater infrastructure which will be funded by infrastructure contributions from developers. Trunk parks are to be provided by future developers.

Situation

Avarcom Developments Pty. Ltd. purchased a 25ha site in the area during the consultation phase of the Forest Ridge Local Plan. Although the property was still zoned for rural uses, Dispergo City Councils recent endorsement of the Forest Ridge Local Plan opened the potential for housing development on the site. Avarcom Developments therefore lodged a development application to DCC to subdivide the property shortly after the Forest Ridge Local Plan was endorsed. The proposed development sought permission to subdivide the property into 420 new lots of sizes varying from 250m² to 800m². The application also sought approval for an area of medium density housing in the form of townhouses. Although the application didnt comply with DCCs zoning requirements, it met the future planning intent of the Forest Ridge Local Plan and was therefore approved by DCC subject to certain conditions.

One of these conditions required the developer to provide a 3ha sports park in a prime location on the site where the developer intended to create its (highly profitable) medium density residential units. A park of this size would draw users from across the entire district and is substantially larger than the demand for park created by the development. DCC advised the developer that as the park is trunk infrastructure, the cost of providing the park would be credited against the infrastructure charges that the developer would normally have to pay towards trunk infrastructure.

DCC further advised the developer that the credit would be calculated using the Councils standard rate of $20/m² for parkland. Avarcom Developments was not expecting to have to provide land for trunk park infrastructure at all and their pre-purchase feasibility assessment was undertaken with the assumption that they would generate significantly higher returns from this part of the site. Avarcom Developments therefore appealed DCCs decision to the relevant planning court on grounds that the condition to provide a 3ha sports park was onerous, unreasonable, and unlawful.

As is standard practice, the court ordered that the parties hold a without prejudice meeting to attempt to negotiate a solution to the dispute. If the matter cannot be resolved at this meeting, the court will set a date to hear the matter. Based on the courts current case load, a judgement would not be expected for at least 12 months.

You are to participate in this without prejudice meeting and attempt to reach an agreement with the other party. Although you do not have to reach an agreement, your employers expect progress and may be disappointed if a resolution cannot be reached and the matter goes to court. Key areas of contention will relate to the price of land used by the council to credit against infrastructure charges, the size of the park, and the reliability and legality of the information that supports these positions.

Question:

Undertake pre-preparation by thinking about the likely positions of both the council and the developer

Think about their most likely approach to the negotiation and how strongly they may, or may not, be motivated to get an agreement

Prepare an initial plan for the negotiation for each party