Daily Archives: March 15, 2011

Christchurch heritage buildings approved for demolition #eqnz

Canterbury Earthquake
Media advisory – Tuesday 15 March 2011, 1930 hours

Process for approving deconstruction
In the case of heritage buildings, a robust process is followed that involves an assessment by Heritage and by Lifelines (utilities) and an inspection carried out by a suitably qualified engineer.
Every endeavour is being made to contact all owners of buildings if demolition or deconstruction is necessary.
There will be no salvaging of materials in buildings unless it is by the building owner or those contracted to carry out salvage work.

Heritage buildings approved for deconstruction
* Provincial Hotel – 274 Cashel Street
* 112 Centaurus Road – Dwelling
* Cathedral Grammar – Chester Street West 8 (2), Stratham Building
* Austral Building – 603 – 615 Colombo Street (includes 170 Tuam Street)
* Bean Bags and Beyond – 626 (aka 626) Colombo Street
* 625 – 629 Colombo Street – Commercial buildings
* Wave House/Winnie Bagoes – 194 Gloucester Street
* Hereford Court – 116 Hereford
* Piko Whole Foods – 229 Kilmore Street
* Park Lane Handbags – 111 – 113 Lichfield Street
* Former Ridley Building – 116 Lichfield Street
* Nurse Maude – 192 Madras Street
* Charlie Backpacker – 268 Madras Street
* Former City Council Offices – 198 Manchester Street
* Forbes Building – 17 Norwich Quay 17, Lyttleton
* Rhodes Memorial Hospital – Overdale Drive 2
* Edison Hall, Workshop, Witchery – 230 – 232 Tuam St
* Domo – 236 Tuam St
* Fuller Brothers Ltd – 180 Tuam Street
* Addington Flour Mill – 14 Wise Street
* Gopals Restaurant and Pedros Restaurant – 143 Worcester Street

This totals 21 buildings, but note that Colombo Street’s Austral Building also includes 170 Tuam Street and there are multiple buildings included in the Colombo Street addresses
NB: This list differs slightly from the list provided at the media briefing today.

Deconstruction of Addington (aka Old Woods) Flour Mill, 14 Wise St
This deconstruction was triggered by USAR, who recommended the partial or total deconstruction of the building for rescue or recovery purposes or because it presents an unacceptable safety risk from aftershocks.
There are three separate buildings on site that were assessed:

* the mill building itself that has the greatest heritage value,
* a chimney, and
* a brick-clad silos assessed as having a lesser heritage value.

The silos and chimney were badly damaged. The mill building itself was assessed as repairable. The engineer’s report recommended the deconstruction of the silos and the chimney only.
This approved deconstruction sign-off process was followed in this case and the recommendation provided to the National Controller for approval/signature on March 3.

Weblink

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Photograph of quake-damaged Addington mill building
By @Motmunter, Campbell Live cameraman

Posted by Elizabeth Kerr

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Filed under #eqnz, Architecture, Construction, Design, Economics, Geography, Heritage, Politics, Project management, Site, Town planning, Urban design

Cr Dave Cull speech to Town Hall Meeting

TOWN HALL SPEECH 29TH MARCH 2009-03-31
CR DAVE CULL —Copy supplied.

[begins]

A year ago I opposed public funding of the Stadium project on three grounds:
• Affordibility – This city cannot afford a project this expensive, largely paid for with borrowed money, and showing little or no return.
• Risk – of building budget blowout and on-going revenue shortfalls.
• Opportunity costs – what will we not be able to do or afford because all of the City’s spending and debt carrying capacity is committed to the stadium?

However, although it had already ignored a number of its own deadlines, Council decided to proceed with the stadium project subject to a number of conditions.

Some of those conditions were:
• Project cost not to exceed $188m. Remember “not a penny more”?
• Guaranteed Maximum Price (GMP) for construction.
• Contract entered into with Uni and we would have written confirmation of facilities they proposed for land.
• We would sight and approve occupation and revenue agreements between CST and ORFU
• That Council continues to identify ways to reduce ratepayer contribution by $20m.
• Minimum of 60% of Private Sector Funding (PSF) $45.5m be signed up, and Council to be satisfied as to funding the remainder (incl funds to service any bridging finance required). That last condition was added some 6 months later.

In addition:
• Community Trust of Otago was to contribute $10m.
• The stadium promised was a state of the art, multi-purpose venue that would set a new bench-mark for stadia in NZ.

Fast forward almost exactly a year to now, and what do we find with those conditions?

• The total project cost has risen by $10m. That’s a lot of pennies.
• The GMP contract offer contains exclusions that potentially expose DCC to risk of price increases. The Otago Regional Council was specifically warned about that by its chief executive. If those exclusions remain and something unforeseen turns up then there is a very real possibility of cost increases.
• A contact has not been finalised with the university
• An occupation and revenue agreement between CST and ORFU has not been finalised.
• The $20m has not been found or even any part of it.
• The CTO promised only $7m
• The design and specification of the stadium had been changed in order to keep the construction cost within the agreed budget. And those changes have:
They have:
1) reduced the ability and flexibility of the stadium to cater for much more than rugby without spending a lot more money.
2) lowered the specification and standard of finish so that while initial costs are lower, long term maintenance costs will be higher.

• 60% of PSF had not been obtained. But Council decided to accept unsigned agreements for corporate boxes and seating as if they were finalised.

But in any case, and far more worryingly, the whole concept of the PSF had been changed. In fact to call it PSF now is farcical. It was initially reasonably understood as money raised from non-public sources (ie not ratepayers or taxpayers) and contributed to the construction cost of the stadium. So there was an expectation that the money (or most of it) would be available on Day 1 of construction. However by March last year, a shortfall was already predicted and some $10m bridging finance was identified as being needed to make up the difference at the start of construction.

Well the PSF fell even further short of target. The private sector didn’t buy in. So the marketing was changed and now the PSF will be:
• obtained from the sale of seating products (corp boxes/lounge memberships and sponsorships)
• no payment for these will be required until the stadium is built
• after that payments will be made annually

But as I said, the money is needed for construction. And the amount of bridging finance required to tide things over has risen now to $27m loan + $15m underwrite. That’s some $42m + interest on some of that over time, required to achieve the balance of $45.5m now.

The CST obviously can’t raise that debt itself because it can offer no security, so Council will effectively borrow the $27m and the govt will underwrite the $15m. That’s an additional liability on ratepayer and taxpayers and that borrowing will have to be repaid from the revenue from those seating products etc after the stadium is operating. I’ll come back to this.

So a year ago I had concerns about Risk, Affordability and Opportunity Costs. But we now have a further reason to be extremely concerned about this proposed project. And that is the process by which Council has progressed it.

Because all of those failures to meet the Council’s own conditions are CHANGES from what was promised a year ago.
Individually, some of them might not seem so important. Taken together however, they amount to a significant change to the whole project and impose a huge amount more risk and liability on the ratepayer.
In brief:
• The overall cost is higher.
• The stadium isn’t the same as the one the community was promised.
• Ratepayers’ liability for debt is increased markedly because Council is effectively taking responsibility for the PSF.
• the GMP is really a Claytons GMP because if the exclusion clauses remain the price could rise.
• And that doesn’t even start to take into account the deepening world-wide economic recession. If ever there was a time to be careful, to limit your risk, to keep your powder dry and your cash liquid: it’s now.

These are all have pretty ominous implications but before I look a bit closer at the PSF I’ll touch on the GMP:

Other speakers have looked at this so I will simply point that once Council is locked into a construction contract, with clauses allowing the construction price to increase under certain circumstances, there is no way out. If those clauses are activated, we will have to keep going and paying and the ratepayer will have to foot the bill. So much for a GMP.

Now the PSF.
We have been told that just 3% of the so-called PSF will be paid up on the day the stadium opens. After that the revenue stream from the leasing of corporate boxes and lounge memberships and naming rights sponsorships and other revenue will come in each year. So in fact, apart from some naming rights and sponsorship deals, the PSF is actually revenue earned by the stadium for facilities or services offered. In any case, most of the other 97% will have already been borrowed by Council, and that debt is expected to be serviced AND repaid by those on-going revenues.

BUT, and here’s the catch; the reason that extra borrowing is necessary is because the revenue stream, the cashflow, the PSF was so weak. But hang on. Isn’t that the very cashflow that is now expected to be strong enough to cover the borrowing AND pay interest on it as well as the operating costs?! Spot the contradiction.

If that cashflow stream is not forthcoming, or it peters out for whatever reason, like the Highlanders franchise disappearing followed closely by its audience, Council will be left with a debt and few funds to cover it and they will also have a football stadium with no user. Who will have to stump up year after year in that event? The ratepayers. You.
So not only has the PSF been largely taken over by the ratepayer, the means provided to cover it could be shaky.

But how likely is that?
A couple of professional reviews of the CST’s cashflow projections have been done. Those reviews described the predicted cashflows as “not conservative”. In other words they thought the Trust was being overly optimistic about what the place could earn. So the reviewers reduced the cash quantum of some assumptions, and even after that they still reckoned there were “significant risks” that even the reviewers’ reduced predicted revenues would not be achieved. Indeed the reviews concluded that there is very real chance that the stadium will run at a considerable loss. And that’s after Council and its companies (read ratepayers) have paid the bill for interest on the main borrowing and depreciation. After all, almost no stadium anywhere in the world makes a profit.

And it gets worse. The changes made to the design to reduce construction cost, like no synthetic turf reinforcing and no dividing curtain at the east end, also reduce the stadium’s useability. So it’s earning power is also reduced.

Anyway by the time the money promised in those seating contracts and sponsorships has started coming in, the Council will own the stadium, and the PSF obligations will have been passed to Council. It will be Council’s job to find the money, the so-called PSF, and make the place pay, if it can.
How on earth can that be called PSF?

The worst case is the combined effect of the two possibilities: PSF revenue shortfalls and a blow-out in GMP could see double digit rate rises for years just to stay where we are! No possibility of anything else being afforded. You can forget other capital projects.

In that case the cost to ratepayers over the 22 odd years it takes to pay this off are likely to be much, much higher than the $66 per annum for the average residential ratepayer that is so often quoted. That is the very real risk this project carries.

I am deeply concerned about that risk of increased cost: either from increased construction cost and operating deficits or both.

But I am even more concerned by the cavalier way the Council, of which I am a member, has treated this community. I am deeply embarrassed to acknowledge that:
• Assurances have not been honoured.
• Conditions designed to give the public confidence that risks were being contained, have not been met. Indeed risks have been allowed to escalate.
• Promises have not been kept.
• And the community has not been listened to. And I’m sorry to say it looks as if a deaf ear will continue to be turned your way. The projected spending for the stadium is contained in the draft annual plan currently going out for consultation with, and submissions from, the community. “We want to hear what you think.” You are told.

But despite that and despite all the changes to this project in the last year: its funding problems, its increased costs and liabilities and ratcheting risks; despite all of the clamorous protest, letters to the newspapers, submissions to Council, and overwhelmingly negative survey results; it is quite possible that a contract for construction will be signed before a single one of your submissions is heard.

I wonder how this community can have confidence that they are being listened to, that their opinions, their interests and most importantly their futures are cared about, when this project continues to be rammed through regardless of so many ominous indicators, changes for the worse, unachieved targets and greatly heightened risks; all of which ratepayers will ultimately have to pay for.

What can you do? Council needs to know the weight of your opinion. Tell us. Make submissions. And send Council a message that we can’t mistake.

[ends]

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### ODT Online Tue, 15 Mar 2011
Extras for stadium approved
By David Loughrey
Forsyth Barr Stadium extras with a combined cost of $5.15 million have been approved by the Dunedin City Council. The funding has been described by Mayor Dave Cull as an “underwrite”.
Read more

Related Post and Comments:
11.3.11 Stadium funding

Posted by Elizabeth Kerr

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Adding duress, Christchurch #eqnz

WHAT IF? CORRECTION

This post has been changed on receipt of information from Christchurch to confirm The Press mis-reported which building had been demolished in Hereford Street.

On Friday, a week-long moratorium on demolition was announced for Christchurch, a pause… it didn’t save the Old Trust and Loan building,
and the Olympia building.

Copy supplied:

“Unfortunately Saggio di Vino has gone and they had done so much to try and save it since the first quake. The most appalling thing though is that as well as demolishing the old Trust and Loan building over the weekend – an important Mountfort commercial building, which was badly damaged and probably had to come down, but should have been taken apart carefully – they also demolished the strengthened Olympia building next door which housed Vivace, a popular café.

The owner was not notified, even though he was known and had been part of the delegation. He is furious. They had told Civil Defence that they wanted to get out equipment and the Olympia was not dangerous at all.

All the books in the bookstore on the top floor were destroyed as well, so two tenants have had their livelihoods destroyed in the process of taking down a strengthened and largely undamaged building. It also took them ages to destroy the built-in safe (and what was inside it) from the Trust and Loan.

In the process of this demolition of the pair of buildings they also knocked a hole in the wall of Shands Emporium, the little wooden commercial building next to the NZHPT Southern Regional Office building (Shands was wrongly reported in The Press as having come down).

So much for the moratorium. Was it over-ruled from above or by council officers, some of whom it seems have considerable sway over what has been happening.

The owner of the above buildings who been very responsible about strengthening his buildings has also been denied permission to bring his engineer and builder into the city to ensure that ones which are still standing can be shored up to stop further damage happening from the aftershocks. Because they are not listed – but make an important contribution to the character of the city – they could be pulled down with not even the cursory process which applies for listed buildings.”

Anyone reading this has to think, unhappily, on the one hand ’emergency powers’, on the other ‘sick process’. Buildings will have to come down – the wrong people are making some ad hoc ‘demolition’ decisions. Why are they so uninformed, is it Brownlee up their backs? These particular decision makers, on the hoof, are another blight on Christchurch which already suffers too much.

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16 March 2011 The Press has made a correction to this item (in italics here).

### thepress.co.nz Last updated 05:00 15/03/2011
Business people want answers
By Olivia Carville
A Christchurch business owner was shocked yesterday when he learnt his central-city building had been demolished. Peter Scalia, who ran Fortuna Books from Shands Emporium on Hereford St, said neither he nor the building owner or leaseholder had been warned of Sunday’s demolition.

“I want to know who authorised it and why we weren’t contacted. If they can demolish the building I was in without any notification, are they going to do it to other buildings?” he said.

Shands Emporium is still standing. Fortuna Books was part of Shands Emporium but in a separate building.

Scalia registered as a central-city business owner last week to gain access to the building and retrieve essential items. However, he said he never heard from authorities.

“I did everything I knew to do. I am really surprised I didn’t even get called before they bowled it. If they had of given me five minutes in there, I could have grabbed my safe, my passport and other documents. Why was it demolished yesterday, why could it not have been tomorrow? I could have been in there today.”
Read more

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Related post:
8.3.11 LostArtChch website to identify items at risk #eqnz

Posted by Elizabeth Kerr

44 Comments

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Building design to integrate safety, usefulness and enjoyment #eqnz

Design matters in Christchurch. Those supervising the reconstruction of the city should remember that. And they should see it as a positive civic attribute – something to draw on as they put the city back together again.

### nzherald.co.nz 5:30 AM Tuesday Mar 15, 2011
Design integral part of rebuilding city
By Jasper van der Lingen
Christchurch faces a decade of rebuilding. There is an urgent need to get started, and great pressure to get started immediately. Decisions made soon will shape the city for generations. This is the time, right at the outset of reconstruction, to ensure that we establish a rebuilding process and framework that has the best possible chance of producing successful results.
Read more

–Jasper van der Lingen is chairman, Canterbury Branch, New Zealand Institute of Architects

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The co-ordination needed to manage the various responsibilities of public agencies, and extent and timing of investment by the private sector is beyond the mandate or capacities of any existing institution.

### nzherald.co.nz 5:30 AM Tuesday Mar 15, 2011
New approach needed for reconstruction
By Jennifer Dixon
What is the future of Christchurch? After the devastation there have been some exciting visions and proposals offered up for the rebuilding of this city. These embrace new possibilities for urban form and function, the shape and scale of the central business district and what needs to happen to tracts of land in the eastern suburbs, now largely unsuitable for residential living.
Read more

–Jennifer Dixon is a professor of planning and dean of the National Institute of Creative Arts and Industries, Auckland University.

Posted by Elizabeth Kerr

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