Science Alive takes ‘small bath’ on building deal

Science Alive education trust has sold a loss-making investment in the former central Christchurch courts building that it bought two years ago from Nga¯ i Tahu for $25 million.

The initial buyers were the Chow brothers, known for their brothels, strip clubs and property empire in Wellington and Auckland, but they flicked it on for a commission to an international educational group.

Science Alive abandoned redevelopment plans for the Brutalist-designed building, and is understood to have received about

$13m from the latest sale. It also obtained $4m from the recent sale of the adjacent Magistrates Court site to developer Richard Peebles for a childcare centre.

Science Alive chairman professor Phil Butler acknowledged the trust had taken a ‘‘small bath’’ but said it had also received more than

$4m in lease income in the two-anda-half years’ ownership.

‘‘We’re pretty gung ho about the future. We’re looking for a new site for an exhibition centre for young people and tourists,’’ Butler said.

As well as previously unidentified upgrading costs, the Christchurch rental market had declined compared with earlier forecasts, Butler said.

However, former Science Alive chief executive Neville Petrie, who resigned in 2016, said he was saddened and disappointed at the loss of millions of dollars.

‘‘I resigned in frustration. They didn’t look at where the city was going. There were several new buildings being built and rents were going down. The idea people would rush to become tenants next to Science Alive was wishful thinking. The ceilings were also far too low for large exhibits,’’ Petrie said.

The board had been dominated for too long by a group of older men, Petrie said.

Lawyer Rob Davidson, husband of mayor Lianne Dalziel, was named by several sources as a representative of the educational group which has bought the building, although settlement was still weeks away.

Davidson declined to comment because of client confidentiality but expressed concern about xenophobia against major trading partner, China.

Jonathan Lyttle, managing director of Savills’ Christchurch office negotiated the sale of the courts building, and said that after the initial contract was clinched with the Chow brothers, he had approached them with the offer from the educational group which ultimately bought it.

‘‘There was a lot of interest in this building, we’ve actually seen a resurgence in the popularity of commercial buildings that have some history and character,’’ he said.

‘‘There is still a great deal of interest in buildings which can be acquired for not much more than land value.’’

Lyttle said trusts and non governmental organisations needed to examine how they dealt with property and where they obtained best advice,’’ Lyttle said.

Science Alive commissioned reports from Octa Associates in 2015 for a total cost of $131,796.

The Octa services were provided at ‘‘arms length’’ according to the Science Alive annual report because David McLernon was a director of both Octa and Science Alive.

The reports cited rents of more than $267 a square metre – but actual office rents in new buildings are not much higher and may include incentives such as free rent periods because there are still many vacancies.

The latest Science accounts available, for the 2017 year, show total income of $2.3m, most of it from the last Justice Department rental payments. Expenses took $4.9m, most of it unspecified, leaving a loss for the year of $2.8m.