NZ Loan and Mercantile Building

Russell Lund on The Panel

### Mon, 11 Aug 2014
Radio New Zealand National – Jim Mora with The Panel
The Panel with Michael Deaker and Sue Wells (Part 1) ( 23′ 8″ )
16:07 Topics – we’ve heard from the doctors union the Association of Salaried Medical Specialists that 42 per cent of our senior doctors now qualified overseas. [discussion starts at 14:50 minutes in] The grand old New Zealand Loan and Mercantile Building in downtown Dunedin, developer Russell Lund wants to restore this category two building dating from 1872 and create a 24-unit apartment complex but there is significant opposition due to noise concerns.
Audio | Downloads: Ogg MP3

Land Use Consent: LUC-2014-259
31 & 33 Thomas Burns Street, Dunedin
New Zealand Loan and Mercantile Agency Co Ltd Building

NZ Loan and Mercantile Agency building, Dunedin [] 1 detail
DCC Planner’s Report (PDF, 4 MB)

Related Post and Comments:
8.8.14 NZ Loan and Mercantile Agency Co Ltd Building…

█ For more, enter the terms *loan and mercantile* or *harbourside* in the search box at right.

Posted by Elizabeth Kerr

*Image: – NZ Loan and Mercantile Building by Ben C Hill for New Zealand Historic Places Trust (now Heritage New Zealand)


Filed under Architecture, Business, COC (Otago), Construction, DCC, Democracy, Design, Economics, Geography, Heritage, Heritage NZ, Innovation, Inspiration, Media, Name, New Zealand, People, Pics, Politics, Project management, Property, Site, Tourism, Town planning, Urban design, What stadium

7 responses to “NZ Loan and Mercantile Building

  1. Elizabeth

    I have isolated extracts from the DCC Planner’s Report that deal to the subject of “lateral spread” should the building suffer a significant seismic event (see natural hazards).

    I have also included discussion of the application in summary comments; the application considered as a true exception; the planner’s view on non-complying status; and the planner’s recommendations and reasons for same.

    You can read the whole report here.

    What DCC’s consulting geotechnical engineer said on pages 134-135: MWH LUC-2014-259 (PDF, 622 KB)


    Dunedin City District Plan
    [paragraph 12] The subject site is zoned Port 2 in the Dunedin City District Plan, and it is located within the heritage precinct TH12, being the Queens Gardens Heritage Precinct. The building is listed in the Plan as B106, being the NZ Loan and Mercantile Building. From a natural hazards perspective the immediate area is shown on the Hazards Register as being susceptible to land stability, subsidence, liquefaction arising from a seismic event. The subject site is also annotated in the Plan as being a HAIL (Hazardous Activities Industry List) site.

    [27] This section of the report assesses the following environmental effects in terms of the relevant assessment matters of sections 8.13, and 20.6 of the District Plan:
    • Transportation
    • Infrastructure
    • Hazards
    • Bulk and Location & Visual Impact
    • Amenity values and Character
    • Noise & Reverse Sensitivity
    • Sustainability and Positive Effects
    • Cumulative Effects
    • Other Matters

    [59] The proposal was forwarded to the Council’s Consulting Engineer for comment as the building is both historic and sited within reclaimed land on the periphery of the Otago Harbour. The residential activity proposal is a non-complying activity and therefore a broad assessment of effects is appropriate.

    [60] The Consulting Engineer noted the site is on reclaimed land and will be susceptible to amplification of earthquakes effects under seismic conditions, included in this hazard is the likelihood of liquefaction of the alluvial deposits during an earthquake. The property is also within l00m of the wharf, and as such is susceptible to lateral spread during a significant seismic event. Underlying soils comprise deep alluvial soils and reclaimed silty sands. Bedrock is anticipated to be in excess of 25m depth.

    [61] Further to this, the site is relatively low-lying. The Council’s GIS hazard map indicates that the property will not be affected by anticipated sea-level rise in the next 90 years; however, the Otago Regional Council hazards indicate the site may be affected by storm surge. Due to the elevated nature of the proposed residential floor however, this issue will be discounted by inspection, providing no domestic storage is provided at a lower level.

    [62] The Consulting Engineer notes that the potential minimum floor levels are unlikely to be an issue, due to the existing floor level for the proposed residential activities. Whilst the proposal does not necessarily create or exacerbate instabilities on this or adjacent properties, the insurance risk to the community is greater under a change of use to multiple occupancy residential activity.

    [63] I note the recently published report “Assessment of Options for Protecting Harbourside and South City from Direct Impacts of Sea Level Rise’ (Beca Ltd for the DCC, July 2014). It considers the relationship between mean sea level rise and ground water level in the Harbourside area will mimic that of the effects in South Dunedin. Inundation and ground water level are anticipated to extend to the original shoreline prior to reclamation works.

    [64] The proposal constitutes a change of use for the building. Building consent ABA-2014-742 was obtained to upgrade the seismic loading to 67% of Code. No Project Information Memorandum was required, or sought as part of that building consent application.

    [65] The applicant’s engineer Hanlon and Partners Ltd are of the opinion that the design load case for liquefaction / lateral spread was not required, as it has not been required historically. Recent seismic events in New Zealand illustrate the importance to quantify risk. The Council’s Consulting Engineer comments that potential for brittle collapse of the building as a result of lateral spread may not be a problem, but must be assessed and quantified before residential activity occurs. The Council’s Consulting Engineer rightly seeks further clarification on this matter before the Committee can determine if the proposed residential use is safe.

    [66] Overall I concur with the assessment of the Council’s Consulting Engineer, the onus falls on the applicant to provide further information on the risk associated with lateral

    [135] The proposed development will retain the existing and scheduled exterior envelope. Within the setting of the adjoining port and industrial area, the existing bulk and proposed alterations is not out of context. Excluding reverse sensitivity, the proposal is not likely to create any effects on the receiving environment that could be considered more than minor. Issues relating to lateral spread, reverse sensitivity and sustainability are the key matters for consideration.

    [136] Overall, it is my opinion, that any physical effects from the proposal resulting on surrounding properties will be less than minor. Matters relating to reverse sensitivity and incompatible mixing resulting in conflict between residential activity and existing businesses could be potentially significant and the applicant’s position that all issues can be addressed by insulation without associated ventilation and a no complaints covenant is not compelling. I have identified other areas of reverse sensitivity that have not been addressed in the application such as air discharges or hazardous substances. With respect to reverse sensitivity matters, I am therefore not yet persuaded the effects will be more than minor.

    Section 104
    True exception (SI 04(1)(c))

    [149] Section 104(1)(c) requires the Council to have regard to any other matters considered relevant and reasonably necessary to determine the application. The matters of precedent and integrity are considered relevant. These have been matters considered by the Environment Court when sitting in Dunedin. Case law staffing with A K Russell v DCC (C9212003) has demonstrated that when considering a non-complying activity as identified by the Dunedin City Council District Plan the Council is required to apply the ‘true exception test’.

    [150] In paragraph 11 of the decision Judge Smith stated “we have concluded that there must be something about the application which constitutes it as a true exception, taking it outside the generality of the provisions of the plan and the zone, although it need not be unique.” This was added to in paragraph 20 where the Judge stated, “therefore, examining this application in accordance with general principles, we have concluded that the application must be shown to be a true exception to the requirements of the zone.”

    [151] The application recognises that the proposal should be assessed as to whether it challenges the integrity of the Plan and sets an undesirable perceived precedent, or whether it is a ‘true exception’ that takes it outside the generality of the plan and the zone.

    [152] Non-complying activities have the potential to create an adverse precedent, which may challenge the integrity of the Plan by seeking to write out elements of the Plan, be it Rules or intentions. This is further examined in the Plan Change 7- Harbourside decision which initially determined residential use was appropriate in the area, but was subsequently discounted during the appeal process. The application still must meet the test of being a ‘true exception’ to allow the proposal to proceed.

    [153] It is my opinion that the proposal is not likely to create an undesirable precedent as the site distinguishes itself from most, if not all other sites in the Port 2 zone. The building envelope is scheduled in the Plan and by virtue of design constraints; the scope for permitted use is limited. Physical restrictions such as the height of ceiling on lower floors and supporting pillars makes some permitted use additionally challenging.

    [154] Of greatest weighting in my opinion, the [position] of the subject site at the end of a block of buildings projecting towards the city centre, with frontage to three formed roads provides some distinction from the remainder of the industrial building stock. For comparison, had the subject site been nestled centrally within the block and abutted by industrial/port use, my position on the true exception could not be justified. Finally, the site forms part of the Queens Gardens Heritage Precinct which recognises the contribution the building makes to those precinctual values.

    [155] Taking the above into account it is my view, the proposal is a true exception, where few, if any other Port 2 sites in Dunedin City can rely on the same argument to establish a residential activity.

    Non complying status (s1040)

    [156] Section 1040 of the Act establishes a test whereby a proposal must be able to pass through at least one of two gateways. The test requires that effects are no more than minor or the proposal is not contrary to the relevant objectives and policies.

    [157] It is my opinion the proposal may result in effects that are more than minor with respect to reverse sensitivity implications on existing business. In section 6, I have concluded that the proposal is consistent or generally consistent with the objectives and policies relating to the Manawhenua and transportation sections of the Plan. The proposal is generally inconsistent or inconsistent to the objectives and policies relating to the Port and Environmental Issues sections of the Plan. Crucially, relating to avoiding the indiscriminate mixing of incompatible use and overall the development is assessed as being contrary. Overall the objective and policy analysis indicates the proposal is inconsistent.

    [158] The proposal only need pass one limb of the gateway test in order for the Committee to be able to grant consent. It is my opinion the application passes the s104D test relating to the objectives and policy analysis, and only by the finest of margins. Therefore, the Committee is able to consider granting consent to the proposal.

    1. Having regard to the above assessment, I recommend that the application be declined, unless the Committee is satisfied with respect to the reverse sensitivity issues.
    2. Should the Committee be of mind to grant the application, I recommend at a minimum consideration of the draft conditions of consent set out in Appendix B.

    1. No evidence has been provided quantifying the risk of lateral spread during seismic events, or whether the site is considered safe for residential activity. Council would be unable to provide for residential activity when the risk to human life during an earthquake event is uncertain.
    2. While there are positive reasons to approve the development in what I consider is an exceptional building, the proposal is not supported by the underlying zoning.
    3. It is my opinion reverse sensitivity poses a risk to the ongoing viability of the port and industrial businesses operating in the immediate area and the applicant’s proposal to address reverse sensitivity is not sufficiently developed to be compelling.
    4. The proposal is inconsistent to the objectives and policies relating to the Port and Environmental Issues sections of the Plan. With respect to the sustainability section, the proposal is contrary with respect to avoiding indiscriminate mixing of incompatible use or developments.
    5. It is my personal view a no complaints covenant is not a suitable mechanism to address effects as residents will continue to be exposed to nuisance with no opportunity for redress. A covenant should only be used in conjunction with effective mitigation.

    Report prepared by: Darryl Sycamore, Planner
    Report checked by: John Sule, Senior Planner
    Date: 8.8.14

  2. Cars

    In practical terms, it is clear that developers must make earthquake works, but they are unable to do it in a way that allows them to profit. The nett result is that the only old Dunedin buildings that will be earthquake proofed will be undertaken by the DCC or lunatics, but that may mean only lunatics with public money

    • Elizabeth

      Right now sane property developers are doing seismic strengthening to protect their investment and by virtue of rates relief, assistance via Dunedin Heritage Fund, Lotteries Heritage or small local grants provided for the purpose – and some developers are entirely self- or privately funded. Take your pick. The only uncertainty is the legislation that will be enacted by Central Government in the end…. since Minister Nick Smith is now reviewing that due to the high cost to the New Zealand economy if the select committee was to stick by what’s on the table currently, that is, a broad brush piece of brutish vandalising impoverishing nonsense!

  3. The big question about the vexed matter of earthquake proofing of buildings, which is never asked or proffered, is: just what are you proofing against? An earthquake is the obvious answer. But what earthquake I ask? So how can you talk about spending thousands or even millions of dollars to reach a thirty per cent proof when no-one addresses the question: thirty per cent of what? To me it looks like just another ‘gravy train’ for the bureaucrats, insurers, engineering and architectural consultants, builders, building suppliers, anyone who can grab a buck out of it. It is huge and won’t go away anytime soon. After all is done then the ‘really really big one’ comes and knocks the whole lot down again. “Oh bugger” they’ll say, we got that one wrong.

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