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Investors in a large Auckland apartment building which is about to be evacuated for major repairs don't yet know how much money it will cost to fix the place.
Mike Garner, a member of the Railway Campus body corporate, said the true cost of re-roofing the original former
Auckland Railway Station building at Quay Park was not yet known.
"We're just getting plans drawn up," he said.
Additions made to the building did not need re-roofing but the historic building needed a new roof and there were issues with the way the additions joined the old building.
Investors who owned apartments there were duty-bound to maintain the building because it had heritage status, he said.
Auckland University said on Friday about 400 students would have to be evacuated from the building for about a year during the work.
Garner said investors who owned units had come to terms with problems and had taken the hard decision.
"There was a unanimous decision made by the body corporate that we'd close it and fix it. We have got to guarantee the students quiet time for studying and with scaffolding up and repairs being made, we couldn't do that," he said. "It was an easy decision to take - the roof is knackered."
University director of student administration Dr Wayne Clark said it was too early to say when students would return to the Railway Campus.
Many investors have already suffered big losses on the block. One owner who paid $76,000 for a unit got back only $44,000 in May and apartment sales specialists City Sales auctions units there without any reserve.
The building was developed by Jim Speedy of Covington Corporation, who said in 1999 that he was developing 230 units which would give investors annual returns of 9 to 10 per cent. Units in the block of leasehold land sold then from $83,000 to $170,000, including furniture, and Speedy told the Herald the block would be a "fantastic development. The finished product will be spectacular as a facility for the university. The common areas, the library - you just can't make that today".
Speedy said this week the Railway Campus was a development undertaken in conjunction with the university.
Martyn Tiller, the block's body corporate secretary at Crockers, said 169 investors who owned units were resigned to having the work done. The work would be expensive, a total cost had not yet been given but it would be more than $1 million, he said.
In 2000, a dispute between the university and developer over the building went to court. Covington won a Court of Appeal judgment over a dispute with Uni-Accommodation which had been granted the right to put Covington into liquidation.
The university subsidiary was claiming $540,000 from Covington. But Covington appealed against the High Court judgment and won a stay.
A Court of Appeal judgment from Justice Peter Blanchard said that Uni-Accommodation had agreed to take long-term leases of units from Covington.
It was envisaged that Covington would then sell its interest in the units to individual investors, guaranteeing them a 9 per cent return for a period after the sale.
Covington had covenanted with Uni-Accommodation that during a two-year guarantee period, it would meet any shortfall in the revenues received by Uni-Accommodation from occupiers of the units which it had taken on lease and would also meet certain outgoings.
But earlier this decade, the take-up of occupancy had fallen well short of expectations. The university was blaming trouble with the block on changes in market conditions since the project began in 1998 and defaults by Covington in the performance of its construction obligations.
