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Several elderly residents in a Wellington apartment block have died while waiting on a solution to fix their earthquake-prone building.
The Herbert Gardens complex on The Terrace suffered non-structural damage in the 2016 Kaikōura earthquake but a detailed seismic assessment commissioned five years later revealed the building also had aNew Building Standard (NBS) rating of just 20 per cent.
The 54-unit property was built in the mid-1960s and is operated under a company share structure.
The son of one owner, Gareth Sutcliffe, said shareholders are exhausted and repairing the building is now beyond their means.
“The board arbitrarily ruling out options such as sale while proposing a plan that is unaffordable is enormously damaging to shareholder interests. The board are coming up to their eighth year of talk and haven’t executed.
But board chairman Antony Paltridge said they are not fixated on one solution and shareholders will be provided with other potential options to consider.
The 54-unit property was built in the mid-1960s and is operated under a company share structure. Photo / Mark Mitchell
High-profile shareholders in the complex include former Prime Minister Jim Bolger and former Wellington Deputy Mayor Ian McKinnon, who both declined to comment on the situation.
The cost to strengthen the building, fix weather tightness problems, and address interior fire protection and ventilation issues will be about $16 million, the Herald understands.
It’s unclear what the interior remediation for damage from the Kaikōura earthquake will cost on top of that.
In a newsletter sent to residents this week, the board said the insurance claim from the earthquake had still not been settled.
There is a more than $4m gap between what the insurer has offered to remediate the earthquake damage and what the board’s quantity surveyors had assessed the work would cost, the newsletter said.
“With the agreement of shareholders, the board is investing considerable time and effort to give shareholders the best option to protect the value of their property. Although we cannot eliminate all risk, we are endeavouring to minimise it.”
With the total bill for all the work being at least $20m, the average cost for owners of each apartment is $370,000.
It has been seven years since the Kaikōura Earthquake. The Herald has matched the names of at least five shareholders, either listed as historic or current, with death notices published in that time.
Paltridge acknowledged it has been a difficult process and said the board’s guiding principle has been to work in the best interests of apartment owners.
“We know this is a massive financial commitment and we’re working closely with owners to help them through the process. Naturally, some owners are anxious, and so are we. We live here too and it’s our homes we’re talking about.”
The scheme was primarily designed for owners at risk of losing their homes due to financial hardship from these large bills.
Paltridge said the board has recently presented a plan to strengthen the building to 70 per cent NBS along with the other work.
Experts are developing the best possible advice and it will be presented to shareholders before a special general meeting, he said.
Information the board is preparing will outline a range of alternatives, as well as before and after valuations, and the views of developers, he said.
“At that meeting, shareholders will be able to debate the issue and democratically decide if they want to proceed. As the constitution requires a 75 per cent majority, it must be a decision an overwhelming majority supports.”
Paltridge said a detailed seismic assessment was not done earlier because the board was reassured by the 87 per cent NBS rating provided by Wellington City Council in 2007.
This meant the assessment was only undertaken after 80 per cent of shareholders approved a plan in mid-2021 to replace the building’s ageing windows and aggregate panels, while undertaking insurance-funded work to fix the Kaikōura Earthquake damage.
The assessment, received in mid-2022, resulted in a significantly lower NBS rating of 20 per cent and the board had to change the focus of its work to seismic strengthening.
Georgina Campbell is a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.
