QUAKE QUANDARY
The case for demolition
EARTHQUAKE STRENGTHENING legislation is in limbo until after the election, but the debate about what should be done to save the country’s quake-prone buildings continues.
Because Parliament has disbanded, calls from the property sector to give commercial building owners some kind of financial help for strengthening remain unanswered.
But at least two city councils are not waiting for the outcome, and are providing rates rebates or other help for building owners under pressure.
Following the devastating Christchurch earthquakes, new legislation was drafted which would force quake-prone buildings to be strengthened or demolished.
They must be rated at least at 34 per cent of the new building standards of the day within 10 to 25 years, depending on their circumstances.
The Property Council was one of the first to start lobbying the Government for help, and recently Local Government New Zealand also waded into the fray.
Its suggestion, ‘‘a more flexible framework’’ to help building owners strengthen quake-prone buildings, and financial incentives and tools for meeting the challenge of high insurance costs.
These calls await the results of a parliamentary select committee report on the Building (Earthquake-prone Buildings) Amendment Bill.
But in Christchurch and Wellington, councils have already rolled out moves designed to help building owners meet their deadlines.
In Christchurch, a built heritage fund allows owners of listed heritage buildings to apply for grants of up to 50 per cent towards several types of conservation work, including quake strengthening.
The Wellington City Council has so far identified 684 pre-1976 buildings as earthquake-prone, 137 of which are heritage-listed and 21 of which have the highest rating of ‘‘Category 1’’.
It has also started a built heritage fund, setting aside $400,000 to give relief to special strengthening projects, a sum which may become annual.
A rates remission scheme for buildings undergoing strengthening is operating in Wellington and, in some cases, rebates on building consents.
However, Wellington City Council’s building resilience manager Neville Brown says he does not expect all councils to follow Wellington’s lead.
‘‘It’s perhaps easier for us because we’re somewhat larger, but it would be considerably difficult, I would have thought, for the smaller authorities to do similar things.’’
Although the grants will help small building owners, Brown admits the relief is small change compared to the enormous costs overall, which is why the council has asked the Government to ‘‘step up,’’ especially around heritage buildings.
‘‘We know that people still have insurance issues, and so there’s areas in the insurance market that they could help with and, equally, borrowing money to actually do the work.
‘‘Certainly, from a Wellington perspective, there are people who want to do work but just struggle to be able to borrow the funds.’’
Wellington Property Council president Andrew Hay agrees that more needs to happen, fearing that heritage buildings will end up ‘‘demolished by neglect’’.
‘‘It is simple. We are looking to promote a balanced consideration of heritage, economic and public safety factors.
‘‘If upgrades are going to be law, people have to be able to afford them – otherwise owners, including owners of heritage buildings, should be allowed to demolish and rebuild.’’
Hay pointed to a protected heritage-listed building in Wellington’s CBD which is valued at $4.95 million but will cost $6.1m to upgrade.
The building’s owners cannot get bank finance to do the strengthening because it would result in a loan-to-value ratio of 83 per cent. But because of its heritage status, the building cannot be demolished, either.
Wellington developer Mark Dunajtschik is in a similar boat. He has just returned to the Environment Court to continue his three-year battle to demolish the A Heritage fund has given $217,000 so far in grants to nine heritage buildings, including $60,000 to the owners of the former Evening Post building in Willis St and the MLC building on Lambton Quay. A Year- by-year rates remissions for eligible building owners from July 1 if their building is unable to be occupied while it is being strengthened. The building does not need to be on the council’s earthquake-prone buildings list to be eligible. A Rebates on building consent fees if the building is on the earthquakeprone list and the strengthening historic Harcourts building on Lambton Quay, because the repairs will outweigh its value.
The case is being seen as something of a precedent setter, after the High Court directed the Environment Court to review its initial decision and take the public safety risk into account if it rules the building is to stay.
Dunajtschik – the prospective developer of the new Wellington convention centre – says he is not against saving heritage.
Wellington’s Cuba St, its old Public Trust Building, St Gerard’s Monastery and St Mary of the Angels are all examples of buildings he says he would ‘‘strongly support, not just with words but with a cheque’’.
However, he says there is nothing unique about the design of his Harcourts building.
‘‘They used the same drawing and built the same building in several colonial towns, and in fact there’s still one in Adelaide. So there’s nothing special about it.’’
In his view, communities will have to prioritise and get behind the old buildings they want to save.
‘‘It’s like an old car, you can replace the gearbox, you can replace the brakes and do everything else and at the end, you still have an old car’’.
Opposing the demolition of the Harcourts building is Heritage New Zealand, formerly the Historic Places Trust.
Its central region general manager Ann Neil says the organisation understands quakeprone buildings have to be treated practically.
‘‘We accept that it may not always be possible to retain heritage buildings,’’ she says, but she also believes the resource consent process should be more robust.
That includes strengthening costs being assessed by an engineer experienced in seismic matters and historic retrofits, and an assurance from councils that the costs are indeed prohibitive.
However, the prospective legislation still has not got things right, according to Aucklander Terry Gould, of development firm Phillimore Properties, a redeveloper of heritage buildings.
He says the legislation is ‘‘an immense threat’’ to New Zealand’s built heritage because the cost does not truly reflect the risk to public safety. costs are significant. AA rates remission of up to three years if the strengthening or demolition work is done, and the building is no longer on the earthquake-prone list. A Five- year rates remission for buildings on the district plan’s heritage list. A The general remission may take the form of a rates reduction or a charge-free period. It applies to commercial, industrial, business, base sector targeted and downtown levy targeted rates, as long as the building is not capable of generating revenue.
‘‘If you said to somebody, ‘you’ve got a one in a million chance of being injured in this building if there’s an earthquake’, and if I go and spend many millions of dollars upgrading and you’ve then got a one in two million chance of being injured . . . most people would go, what a waste of money?’’
Gould warns that a large number of beautiful heritage buildings have been put on the market over the last year because their owners cannot face the ‘‘massive’’ capital expense of strengthening.
However, there was no guarantee that the new owners will restore them.
‘‘Especially in Auckland, the land value is going to be worth more
‘What’s going to happen to Oamaru, for instance? It’s going to be levelled if this current legislation goes through.’
than the building. So you will find there will be a lot of steady demolition of older buildings . . . in particular older buildings with a low rentable floor area.’’
However, while the Government could do more research, Gould thinks the decisions should be left to local government.
‘‘There hasn’t even been a proper cost-benefit analysis done. There hasn’t even been a comprehensive audit throughout the country of what buildings are affected.
‘‘What’s going to happen to Oamaru, for instance? It’s going to be levelled if this current legislation goes through.’’
However, he did support the removal of parapets and masonry under the proposed new rules.
Ideally, Dunajtschik and others would like to see the Government either bring back some form of depreciation for strengthening work or a total write-off.
And the community will also have to play its part, says Dunajtschik.
‘‘If the community at large regards something as precious . . . let the community pay,’’ he says.