Sarjeant Gallery redevelopment: Council contribution rises to $20 million

Project director Gaye Batty says a full evaluation of project costs will be completed in early 2025, Photo / Mike Tweed

Whanganui’s Sarjeant Gallery redevelopment is expected to cost about $73.5 million - $2m more than what was forecast two months ago.

About $20m (27.5%) will be paid by Whanganui District Council.

A report to the council from project director Gaye Batty said as of August 8, there had been an $18.4m forecast cost increase from the June 2020 budget of $55.06m.

Additional heritage restoration works such as extra earthquake strengthening and heritage plastering had cost $5.49m, with an extra $2.72m due to Covid-19 delays and $1.88m due to cost-fluctuation claims from contractors.

Unforeseen ground conditions had cost an extra $1.72m and additional archaeology requirements had cost $1.1m.

However, according to quantity surveyors RLB, the price of the project could be $12.3m higher if it was retendered today, the report said.

That was due to New Zealand experiencing a 10% greater market escalation than what was forecast in 2020.

As of June 30, the mid-range cost forecast was $71.5m, with the ratepayer contribution at $18.23m - 25.5% of the total redevelopment cost.

Last October, the ratepayer contribution was estimated to be $15.68m.

The report said construction work was due to be completed at the end of September but cost increases because of trade cost escalations remained a key risk.

Unplanned costs, including the fit-out of the gallery cafe ($570,000) and additional digital infrastructure such as audio-visual technology ($520,000), had added to the total price.

The gallery’s cafe will now be controlled by the council, with unbudgeted funding of up to $271,336 signed off earlier this month.

Speaking to the Chronicle, council chief executive David Langford said every claim went through a full assessment process to make sure the contractor was entitled to get paid extra under the contract and to assess the amount of money being claimed.

“That’s to make sure it’s a fair market price for the work that needs to be done,” he said.

“Normally, we would get quotes or prices for extra work up front so we can lock in the price before the contractor does the work, rather than paying retrospectively.

“It’s a very thorough, diligent process and it’s the same for any project we do, not just the Sarjeant, where we’re dealing with contractors.”

Whanganui District Council chief executive David Langford.

Batty told the council’s operations and performance committee the project was on track for the reopening date of November 9.

“Works have largely been completed inside the building and there is some commissioning and balancing of the HVAC [heating, ventilation and air conditioning], which will be ongoing,” she said.

“The gallery team is transitioning well, and in terms of exterior works, the construction fence has mostly gone and lawns are being reinstated.

“There will be a full evaluation of the project costs in early 2025, with the report back to the committee in the first half of the calendar year.”

Whanganui Mayor Andrew Tripe told the Chronicle everyone involved in delivering the project had “been as prudent as possible”.

He said the gallery’s heritage building, built in 1912, had complexities due to its age and that caused costs to creep up.

“I think anyone who has done up an old house will find that these things happen.

“We are only a few weeks away from opening, so I think the price is pretty much set.”

Tripe said if the project began today, the council “would probably say no” because of the cost.

“It will only get more expensive to build these kinds of projects, so the fact we’ve managed to do this is testament to all involved.”

Mike Tweed is a multimedia journalist at the Whanganui Chronicle. Since starting in March 2020, he has dabbled in everything from sport to music. At present, his focus is local government, primarily Whanganui District Council.