Bulldozer may be cheaper than fix for Tauranga buildings

Costly earthquake strengthening requirements could hasten the demolition of older buildings in Tauranga's downtown.
The impact on the private sector of the 110 buildings in the CBD requiring earthquake strengthening was laid out by city lawyer John Meldrum who specialises in commercial and industrial properties.
The Tauranga City Council has completed the task of assessing the earthquake risk on all the CBD's pre-1976 buildings.
It found that 110 were likely to collapse in a moderate-strength earthquake - having less than a third of the strength needed to conform with modern building codes.
Mr Meldrum expected that building owners would be doing their sums to see whether they would be better off demolishing their old buildings and starting afresh.
Others with substantial mortgages faced the prospect of forced property sales. The decline in property values caused by the recession meant the equity in their properties had declined to such an extent that they might not be able to raise a loan to pay for the strengthening.
He said it would mean taking a financial hit by selling the building at a discounted price - assuming there was a market for the building.
An immediate issue for landlords was their contractual obligations to tenants.
It could be difficult to gain entry to a building to carry out months of strengthening.
Mr Meldrum said another downside was the owners could spend a million dollars on strengthening and get none of the money back through higher rents because rents were set by the market.
And even if they demolished and rebuilt, owners still faced the problem of only being able to charge the market rate for better quality space.
Dean Waddell, whose family owns most of the downtown waterfront block between Hamilton St and Harington St, said the strengthening raised huge financial issues. Some of their buildings needed to be fixed.
If the market came right, they would avoid the eight years left to run on their deadline for strengthening. A resource consent to redevelop the site was ready to be lodged with the council.
But with the years already rolling around since the credit squeeze, he was worried the deadline could loom closer and closer.
Mr Waddell said many building owners served with earthquake strengthening notices would be comparing the cost of redevelopment with the cost of remedial work.
Tom Roper, of Zariba Holdings, one of the city's biggest commercial downtown property companies, said the significant costs being imposed by earthquake strengthening could spark redevelopment.
Complying with earthquake strengthening codes was not so easy these days because at the end of the day, the tenant had to be able to afford the rent.
Mr Roper said that things had changed dramatically since the Christchurch earthquake.
Old buildings that people once marvelled at for their architecture and beauty were now killers. He anticipated codes could get even tighter in the wake of the earthquake.
"Generally people want to do the right thing to make their buildings safe."
Last year, the New Zealand Historic Places Trust pressed the council to protect six downtown historical buildings by including them in a list of heritage sites.
They were the National Bank on the corner of Spring St and Grey St, Rydall House at 29 Grey St, the former NZI and former Power Board buildings in Spring St, the Cargo Shed in Dive Cres, and Te Matahauraki at No7 The Strand.