Disruption from Auckland's $4.4b City Rail Link slashes landlord's income by 85 per cent

Grant McRae has lost 85 per cent of his income due to construction works on Albert St for the City Rail Link. Photo / Alex Burton

A property owner says tenants are abandoning their leases and his income has shrunk by 85 per cent from being caught in the path of the $4.4 billion City Rail Link in central Auckland.

Grant McRae said three of his seven retail tenants have closed their doors in the past few months because of the noise, dust and dirt, day in and day out, outside the heritage Armishaw's Building on the corner of Victoria and Albert Sts.

"They are killing all these small businesses and crucifying people's lives," he said.

McRae said he has cut the rent in half for the remaining retail tenants, and a backpackers business, which comprises the upper floors of the four-storey building, is only paying 10 per cent of the normal rent.

Armishaw's Building on the corner of Victoria And Albert Sts, which Grant McRae has owned for 40 years. Photo / Alex Burton

Some tenants simply cannot pay any rent and McRae has stopped charging a liquor store owner to help him survive. The drastic measures have left McRae bearing the brunt of insurance and rates for the building normally covered in the rent.

"Our cafe space has been vacant for two years now with no interest in the space whatsoever," he said.

Nearby store owner Jaydee Patel has likened years of disruption from construction in lower Albert St to a "war zone" for dozens of small businesses.

Worse still, many of those businesses face two more years of mental and financial stress when the intersection of Victoria and Albert Sts closes on June 29 for the next stage along Albert St.

The intersection will stay closed until 2023 when City Rail Link Ltd, the company delivering the project for the Government and Auckland, expects the shiny new rail line to open.

Businesses are still open on Albert St but they are suffering mental and financial stress. Photo / Alex Burton

Melina Lam, a tenant in McRae's building for 25 years, is extremely worried about the looming closure of the intersection. Her business suffered when the road outside her shop was dug up for early works on the CRL and worries the business will not survive two more years of disruption.

"I will see what happens," said Lam, who applied for financial help through a hardship fund but got turned down because her shop was 5m outside the zone to qualify.

As well as not qualifying for the hardship fund set up for businesses - not landlords - affected by delays on the lower Albert St work, McRae's rates have increased by $16,133 to $81,038 while the CRL construction has gone on.

"We are paying an absurd amount in rates for a building that is unusable," he said.

Mayor Phil Goff has rejected rates relief for businesses affected by the CRL works and left the matter of compensation to the Government to resolve. The hardship fund set up for businesses affected by the lower Albert St works has paid out $617,178.

Grant McRae hasn't been able to find a tenant for the cafe in his building for two years. Photo / Alex Burton

Transport Minister Michael Wood has got Ministry of Transport officials looking at the issue of compensation on the main contract and could not say when or if businesses and landlords could be in line for financial help.

He said there had been a "significant financial request" from Heart of the City for compensation and officials are carefully looking into it.

Goff and Wood said there will be huge benefits to businesses and landlords once the CRL opens in late 2024.

Heart of the City chief executive Viv Beck said she found these views repugnant when people's livelihoods are at stake and experiencing extreme anxiety and stress from a public project on their doorstep for years.

Melina Lam does not know if she can survive three more years of disruption. Photo / Alex Burton

"It's beyond belief, the lack of care for these people," she said.

Beck said in January she asked for a business hardship fund of up to $10 million a year for the duration of the main tunnelling contract, for rental relief, not compensation. The figure, she said, was based on assumptions and limited information.

Asked what he planned to do with the building he has owned for 40 years, McRae said: "I don't know. I really don't know.

Business owners and workers demonstrate outside the Auckland Council offices on Albert St over the lack of assistance for businesses hit by the ongoing City Rail Link works. Photo / Supplied

"Our complaints to CRL and requests for compensation have been dismissed and ignored and [we've been] told to wait things out and things will come right in a few years.

"In the meantime it has become unaffordable to hold on to the building. Nor can we sell the building because the extremely diminished rent would result in the building being significantly undervalued," he said.

On Thursday, more than 20 affected business owners protested outside the council headquarters in Albert St, calling on Goff, Wood and CRLL chairman Sir Brian Roche to meet them and seeking financial help.