Mayor keeps demolition report secret until legal row resolved

The owners of the 124-year-old Palace Hotel, Michael and John Chow, say they were not consulted before the building was knocked down. Photo / Greg Bowker

Auckland Mayor Len Brown is keeping confidential a report on a council decision to knock down a heritage building after threats of litigation.

The Palace Hotel, a 124-year-old building on Victoria St was reduced to rubble following a council order early on Friday to demolish it.

"The 10-page preliminary report on the structural failure is being kept confidential at this stage due to the ongoing threats of litigation by the other party involved," a spokesman for Mr Brown said yesterday.

Michael Chow, who bought the building for $3.3 million in 2008 with his brother John, said he was considering legal action against the council and seeking compensation.

The mayor had ordered an investigation and a report, which was handed to him on Monday evening.

But yesterday, he decided against making it public.

Mr Chow, who yesterday visited the site where his property once stood, said he was "disgusted" and "very disappointed" at the mayor's decision.

"I believe the council has got something to hide," he said.

"I believe they had made a wrong decision without getting a second opinion, and don't want to release any information that would show that."

Mr Chow said he was not consulted before the building was knocked down, which was at odds with the council's chief executive Doug McKay's version that the owners were consulted.

Mr Chow's company, the Chow Group, had planned to spend $10 million to turn the former hotel into a brothel - called "The Palace Showclub" - to be opened in time for the Rugby World Cup.

Plans included adding another level to the three-storey building, which required excavation work at basement level.

A peer assessment report to the council by company Spencer Holmes said the basement work "comprises of the lowering of the existing floor so as to increase the floor to ceiling height, and the construction of internal separation walls, as well as a new staircase to the ground floor level."

The building was also to house a gaming room, bars, cafe, a courtyard bar and at least 18 double rooms for massage and sex.

"While the building is provided with a large number of bedrooms, the operators have confirmed that no sleeping activities are to occur within the building, and the appropriate purpose group of the upper levels is working business rather than a sleeping usage," the report said.

The basement was to be turned from a storage area into a 84sq m underground function room.

The council's heritage adviser, George Farrant, said on Friday that "failure at the basement level" had caused the building's wall to fold under its own weight.

Mr Chow said excavation had started in the basement, but he did not believe the cracks that appeared on the walls had resulted from the work.

"This is all the more reason the council should make the findings of its investigations public,' Mr Chow said.

"It is of public interest, and people want to know why their new Super City council decided to knock down a heritage building just like that."