The Harcourts building in Lambton Quay, Wellington is set to become the poster building for a struggle between the Historic Places Trust and Wellington City Council, and owners of "heritage buildings" both in Wellington and further afield.
Grant Corleison is a Wellington valuer and business associate of Harcourts building owner Mark Dunajtschik.What follows is not therefore an unbiased account of the fate of the Harcourts building. However it is a thought-provoking piece, and well worth a read. Under the heading The ghost building of Lambton Quay? Corlieson opines:
The next step in the fracas that the future of the Harcourts building in Lambton Quay has become is likely to result in Wellington's own version of the Marie Celeste, that abandoned ghost ship of the Atlantic.
After all the to-ings and fro-ings to get the only commercially viable option of demolition and rebuilding approved, the owner has pulled the plug and intends to cordon off and abandon the building for safety reasons because its heritage value is apparently unique but unaffordable to retain.
While said to have architectural character in the Chicago style, very little of the building, in fact, has any historical merit.
It was completed in 1928 for T&G, an Australian insurer, and comprises ground floor retail and lobby, and seven office floors with a small rooftop flat. T&G only ever occupied some three office floors, the balance of the building was leased to various professionals.
From 1928 to 1980, the interior underwent many alterations and lost most of its original character. The exterior also underwent various alterations and lost some of its original architectural features.
The unreinforced brick and plaster facade is highly regarded by the New Zealand Historic Places Trust but, like 85-year-old buildings in Christchurch, could prove deadly in a strong earthquake.
In 2000, $4.5 million was spent on rewiring, installing new toilets, removing 1000 tonnes of unreinforced brick internal partitioning, and upgrading the lobby with a complete paint job inside and out. Sufficient strengthening was carried out to meet code requirements of the day.
Even after this upgrade, it took more than a year to attract tenants despite its heritage attributes and central location.
I have been a tenant since 1981 and the flight of tenants since the second Christchurch quake of February 2011, when central city workers suddenly realised the relevance of earthquake codes, has been Usain Bolt-like - and fair enough.
Rated at 17 per cent of the national building standard, about half of what could be acceptable at a stretch, the building has become a ghost of its former self with only two people now occupying desks across its seven floors that once accommodated 400.
The Wellington City Council had assessed the building standard rating of the Harcourts building at 4 per cent in 2007 and upgraded that to 17 per cent after reviewing a second expert opinion, proving their science is not exactly precise.
Since then, the building has spawned an industry of Wellington property professionals, economists, architects, commercial real estate agents and lawyers dedicated to advising on the future of the building.
Almost all, except the city council and the New Zealand Historic Places Trust, say the only solution from safety, heritage and economic aspects, is demolition and redevelopment.
The building is currently uninsurable, and if restored to an acceptable quake standard of 80 per cent of building code the premium per year is quoted as $455,000 plus GST.
There is about 200,000 square metres of office space available to rent in Wellington and it would need a blue moon of a landlord's market to even interest tenants in returning to C graded space in an unreinforced masonry building, and help pay the huge insurance premium.
The building's owner, Mark Dunajtschik, has spent more than $500,000 getting professional opinions on its future. It would cost $10.8m to bring the building up to 80 per cent of the standard, with the option of demolition of the building and retaining the facade estimated at $6.5m.
Due diligence has been done by outside parties on renovating the building into apartments, converting it to a hotel and student accommodation. All declined to progress their options and all said the two strengthening and refurbishment options were not commercially viable.
Among this fracas Mark Dunajtschik offered the building for $1 to the council, the Government and the Historic Place Trust. As a further incentive to address their strident views on the heritage value of the building, he also offered the Historic Places Trust an additional $5m towards strengthening and refurbishment.
Despite media comments, they all declined the offer. They were not prepared to spend their own money on the building.
Mr Corlieson raises some interesting points in what we have republished above, and in the balance of his piece. There really is a delicate balance between heritage buildings and public safety.
In our community involvement in Wanganui, we are involved with an organisation that is currently locking horns with local government and its own overseers over earthquake strengthening. It is going to be a hugely expensive exercise, but the organisation's governing body has ruled that the building cannot be used until it reaches a certain percentage of code, which is significantly more that the Wanganui District Council requires. It is a time-consuming and frustrating process, although we completely understand the conservative approach being taken by the governing body, given the issues of liability which have and will continue to come up after the Christchurch earthquake.
We do not blame Mr Dunajtschik for walking away from the Harcourts building. We shudder to think of the cost of strengthening the building, especially when even that may not be enough to encourage tenants to lease space in it.
Sadly, stories like this are likely to become more common in the next few years. We commend Grant Corlieson for bringing this issue into the public domain, and hope that a common-sense solution can be reached.