A police spokeswoman said they were alerted to an online threat made against several people based in Dunedin this morning.
As a result, police ensured those named in the threat were informed and kept safe.
At the same time, police were actively looking for the Mosgiel man allegedly responsible for the threat.
Just after 9.30am, police received reports a man had caused damage to a business premises in Princes St and the Dunedin City Council buildings
Upon arrival at the council buildings, police identified the man they were seeking in relation to the earlier alleged online threats and he was taken into custody.
Nobody was injured as a result of these incidents.
Charges were being considered by police.
Dunedin City councillor Sophie Barker said she was entering the building when she heard yelling and loud bangs coming from the foyer.
"I heard this huge bang and then the guy came out and went down the escalator.
"It was awful - it was horrible. It was scary just to listen to. I thought a bomb had gone off, actually.
"My heart's going - I think I'm going to cry in a minute. I need a cup of tea and a lie down, I think."
Barker said staff were also badly shaken and many were tearful.
The reception area was full of broken glass and over-turned furniture.
Services centre closed
DCC chief executive Sandy Graham said the customer services centre would remain closed until further notice today following the incident, which caused extensive damage to the reception area and nearby 10 year plan public engagement space at the Civic Centre's Octagon entrance.
"Thankfully no one was injured. Staff are being supported following what was a traumatic incident, but we are pleased by the way they responded."
The council had CCTV footage of the incident and would be working with police, she said.
Calls to the council would still be answered, but the 10 year plan engagement space would remain closed today.
This morning's council meeting also adjourned briefly so councillors could be briefed by Ms Graham on the incident.
The council had a comprehensive evacuation plan for such incidents, and staff responded appropriately, she said. A review would follow.
A witness, who declined to be named, said he saw a man walking across the Octagon towards the DCC entrance with what he thought was a baseball bat.
"He destroyed a sign outside the DCC and then he went inside and you could hear him destroying everything.
"I grabbed an old guy and pulled him out of the doorway and told him to get the hell out of here - because you don't want to be standing there when this guy comes out.
"I took him out and the cops arrived soon after."
