Heritage shake-up: fears of mass destructionby Rebecca Macfie
Huge numbers of historic buildings all over New Zealand face an uncertain future in the wake of the Canterbury quakes.
The rational thing for Henk Tabak to have done after he bought his 126-year-old triple-brick building in Christchurch’s working-class suburb of Woolston was to knock it down and build something new. Over its long life, the corner building had been home to a general store, coal merchant and cobbler, but when he bought it in 2004, it was in a state of neglect.
Guided more by his heart than his head, he undertook major surgery on the building, stripping it out and lining it with timber ceilings and fitting new joinery, making additions to modern standards and earthquake-strengthening the original structure. As with most restoration jobs, it was impossible to predict the extent of work required. “You discover this and that, and each time it’s another $10,000 or whatever – it’s ongoing and that’s the risk of this sort of project,” says Tabak.
His budget blew out by about 20% and the project took twice as long to complete as it would have taken to build new. There were squabbles along the way with the heritage division of the Christchurch City Council, which objected to the effect of some of his alterations on the appearance of the building, which is listed as a category4 heritage site in the city plan.
“It cost far more than a new building would have,” he says. “But there is the satisfaction of a job well done, and I love the ambience of the place. But I think many of these sorts of buildings don’t justify the investment, and most people would walk away. At the end of the day, you can only spend what you are going to get back from the investment.”
The restoration job was completed in 2006, when Tabak opened the building as the site of his new restaurant, Holy Smoke. Unlike hundreds of old brick buildings around Christchurch, it has stood solid through the earthquakes and survived the subsequent frenzy of demolition throughout the city, and the restaurant is busier than ever.
But his former insurer, Zurich, has abandoned the New Zealand market, and for the past year he hasn’t been able to get earthquake insurance for the building at any price. Now he’s waiting on the outcome of a detailed engineering evaluation, as required by the Canterbury Earthquake Recovery Authority, which will tell him whether the building is above or below 33% of the strength of the new building standard. Early indications from the engineer are that it is well in excess of the threshold.
“This building has been one of the most looked-at in Christchurch – we’ve had structural engineers popping in, I’ve had people from America and engineering students coming in. It’s been a popular building for engineers as a case study.”
But if Tabak’s project to rejuvenate an old building in a neglected part of town was a high-risk undertaking when he started out in 2004, it would be even more difficult today – and not just in Christchurch
In the aftermath of the Canterbury earthquakes, a coalition of powerful forces is conspiring against historic buildings like his: insurers imposing massive premium increases or withdrawing earthquake cover altogether; tenants fleeing old masonry buildings judged to be earthquake prone; risk-averse engineers who have seen their peers caught in the glare of public scrutiny at royal commission hearings; and the prospect of much tougher legal requirements to either strengthen or demolish such buildings.
OUR EARTHQUAKE-PRONE BUILDINGS
It’s estimated that New Zealand has 15,000- 25,000 earthquake-prone buildings, many of them unreinforced masonry structures built between 1880 and 1935, when the first building code was introduced following the 1931 Napier earthquake.
Unreinforced masonry buildings range from the ubiquitous two-storey village shopping strips of suburbs such as Auckland’s Mt Eden and Ponsonby and Wellington’s Newtown to grand architectural statements such as the Dunedin and Oamaru courthouses. They line the main streets of provincial cities, including Invercargill, Nelson and Whanganui, and rural towns such as Hokitika and Carterton. They define the urban landscape of downtown Dunedin and of bohemian precincts such as Wellington’s Cuba St and Auckland’s Karangahape Rd, just as they once defined central Christchurch.
They are often the low-rent premises of small businesses and start-ups, home to fish-and-chip shops and hairdressers, artisans and boutiques, cafes and community groups. Around 3000 of them are recognised as having significant heritage values and warrant protection, the Historic Places Trust says.
Under the 2004 Building Act, an earthquake- prone building is defined as having one-third or less of the strength of a building constructed to the modern building code. The Act requires local authorities to develop policies to identify and deal with them, and gives local councils the power to require owners to strengthen or demolish them. Some councils, such as Christchurch City, have taken a passive approach, requiring owners to strengthen only when a building has a change of use. Others, such as Wellington City, have had more active strengthening policies but allowed owners decades to take action. Councils around the country have given owners on average 28 years to bring such buildings up to the one-third threshold.
But February 22, 2011, changed everything. Thirty-nine people were killed in Christchurch by the failure of unreinforced masonry buildings. Images of cars and buses buried under fallen brick facades and of collapsed parapets and gables that stole the lives of shoppers, workers and passers-by are seared into the national memory.
Had it not been for the September 2010 earthquake – in which no one was killed but which resulted in many old buildings being cordoned off or demolished by the time of the February quake – many more would have died. Associate professor Jason Ingham, of the University of Auckland’s Department of Civil and Environmental Engineering, told the Canterbury Earthquakes Royal Commission that the death toll would possibly have been 300 higher if not for the previous earthquake.
The days of turning a blind eye to unreinforced masonry buildings in a country that rattles with seismic activity are over. The Royal Commission has recommended a change in the law to require local authorities to assess all unreinforced masonry buildings within two years, with owners given seven years to strengthen to 34% of the new building code. It has called for parapets, chimneys and external walls to be strengthened to 50% of the new code.
Local authorities would have the power to demolish at the expense of owners who fail to take action. All other potentially earthquake-prone buildings would have to be assessed within five years, and strengthened or demolished within 15 years.
A discussion document published late last year by the Ministry of Business, Innovation and Employment recommends a softer time frame: five years to assess and a further 10 years to strengthen or demolish those below 34% of the new building standard.
The reports from the Royal Commission and the ministry call for a public grading system for buildings, which would indicate the seismic capacity of buildings for tenants, the public and prospective owners. Both reports also argue that the requirement for strengthening should outweigh heritage protections, with the commission saying there should be no need to obtain resource consent to demolish listed heritage buildings that are in a dangerous condition.
DOES THE RISK WARRANT THE COST?
But the recommendations for change raise as many questions as they answer. How will building owners fund strengthening work that, in many cases, will not generate any financial return? What if owners opt to demolish rather than retrofit, leaving pockmarked townscapes and a shortage of affordable premises for small businesses? How do we ensure that the drive for safety does not wipe out our architectural heritage?
Between 8% and 15% of New Zealand’s building stock (excluding single-unit residential homes) is earthquake-prone. The Ministry of Business, Innovation and Employment calculates it would cost $1.7 billion to bring all these buildings up to one-third of the current code within 15 years. We could opt for a higher level of safety, but it would cost far more. To lift all earthquake-prone buildings up to 67% of the new building standard would cost an estimated $7.6 billion.
There’s also the question of how much risk we face from earthquake-prone buildings compared with other day-to-day risks – a difficult and sensitive matter to pose less than two years out from the February 2011 earthquake.
But as the ministry discussion document points out, the risk of dying in a given year in an earthquake in New Zealand is around one in a million; the risk of dying in a road accident is 100 times as great: one in 10,000. In New Zealand’s two most deadly earthquakes, Napier and Christchurch (where the majority of deaths were caused by the relatively modern CTV building), a total of 441 people died; at least 366 people have died on the roads every year in the decade to 2010.
Not surprisingly, some of those who are faced with the prospect of tougher building standards, prohibitive insurance premiums and nervous tenants believe the post- Christchurch reaction is disproportionate. Napier property owner Pat Benson, who has refurbished several art deco buildings in the city’s CBD, calls it “Y2K on steroids”. “We don’t want unsafe buildings, but we’re not all dying in earthquakes … There’s just a knee-jerk reaction.”
NAPIER ASSESSMENTS CAUSE ALARM
Because most of the Napier central city was rebuilt within two years of the 1931 earthquake – before the 1935 building code was introduced – standard desktop engineering evaluations put many of the buildings below 33% of the new building standard. Sally Jackson, general manager of Napier’s Art Deco Trust, set up 27 years ago to protect the city’s unique post-quake architectural heritage, says some have been assessed as having as little as 6% of new building strength, causing alarm among tenants and owners. However, when buildings are put through a much more detailed – and much more expensive – engineering evaluation involving visual inspection and analysis of the construction methodology, they are often revealed to be well in excess of the 33% threshold.
“One building close to us had a very low rating of about 15% on the [initial evaluation procedure], but after a detailed engineering evaluation it went to 72%.”
Ingham has advised the owners of Napier’s art deco buildings that the construction method used in many of the city’s post-quake buildings was “world’s best practice” and represents the dawn of earthquake engineering in New Zealand. His analysis has shown that buildings of a similar style in Christchurch performed relatively well through the earthquakes and did not cause any fatalities.
Benson says some of his properties have been given “marginal” ratings as a result of desktop engineering reviews, but he’s scathing about their merit. “I’ve got photos of these art deco buildings being built – they’ve got that much steel and concrete in them … They’ve got great piles, great foundations. They’ll stand up to anything, but the insurance companies have decided that they won’t.”
Jackson says the issue is of enormous concern to the city, which has built a $23 million tourist trade around its architectural heritage. Although none of the buildings in the protected art deco precinct are tagged for demolition, she says two historic buildings on the fringe of the city centre are due to come down early this year.
And Napier’s Post Office building, which was built in 1929 and survived the 7.8 magnitude earthquake and subsequent fire that razed the city centre, was abandoned by its main tenant, NZ Post, in mid-2012 after it was assessed as earthquake prone. Owner Gerald Grocott says his insurer also ramped up his premium to seven times what it was (his response was to cancel the policy and go without), and he has spent $100,000 on engineering reports on the category 2 heritage building.
“The Art Deco Trust and Historic Places Trust want us to do all sorts of things, but they don’t have a dollar to put into it … I would quite like to keep the building, but where do we find the $1.5 million it will take to strengthen it? I’ve said to the Historic Places Trust, ‘You sign an indemnity that if you keep the building, you accept liability.’ Well, there’s no one left in the room.”
TENSIONS OVER GRAND OAMARU BUILDINGS
In Oamaru, whose grand Victorian buildings have also become a major tourist attraction, similar tensions are building. Phil Hope, chairman of the Whitestone Trust, which owns 16 buildings in the historic precinct near the town’s waterfront, says early last year the trust faced a hike in its insurance premium from $12,000 a year to $65,000, as well as an increase in the excess from about $5000 to $100,000.
It was unaffordable, so the trust cancelled the earthquake cover and now has only fire and general hazards insurance. “We’d rather not be in this position but we have to be realistic. Oamaru is seismically one of the three safest places in the country and these buildings have survived since the 1870s. They’ve felt the shakes of Christchurch and elsewhere and survived intact. So we’re anxious, but it’s a risk we have to take and are prepared to take.”
Hope says the trust has done some strengthening work on the buildings over the years, but he is concerned about the prospect of a hard deadline of 15 years (under the Ministry of Business, Innovation and Employment recommendation) for bringing all buildings up to 34% of the modern building code. Further, he doubts whether New Zealand has the engineering capacity to meet the deadline.
“We think they have drastically underestimated the number of buildings involved, and 15 years is the blink of an eye. The engineers required to do all these assessments are still at school.”
PAYING HUGE COSTS VS WALKING AWAY
Adam Thornton, a Wellington structural engineer with extensive experience in strengthening old buildings, fears many owners will simply walk away from their buildings because of the difficulty in getting an economic return from the investment required to bring them up to 34% of the modern code.
“I know of very few strengthening projects that have been an economic success without the building undergoing a change of use and a new lease of life. You saw that in Wellington’s [central city] Te Aro area – Blair and Allen streets – where you get some urban regeneration going on and the area becomes attractive. So the owner does the strengthening but he also gets more value from the building – and so it pays off. But to say to someone in the back streets ‘you’ve got to strengthen your building but you won’t get any greater rent out of it’ is pretty tough.”
Thornton says strengthening costs can range from $100 a square metre to $1000, and as Henk Tabak discovered, expensive surprises are commonplace. For building owners in “main street, small town New Zealand, where they might be getting a pittance from ground-floor rentals and maybe nothing for the top floor, it will just make no economic sense at all to strengthen”, says Thornton. “In towns like Masterton and Carterton, it will be very difficult. It just won’t be worth it. So people will walk away from them or they may just demolish.”
Property Council chief executive Connal Townsend says the post-Christchurch collision of insurance, tenant and regulatory pressures – and pressure in Auckland for more intensive development of central suburbs – means tough decisions about which buildings should be preserved and which should be jettisoned.
“Christchurch’s experience has shown that preserving great swathes of cities on the grounds that they have character is just a totally unaffordable dream … We no longer have the luxury of just preserving everything that looks nice. We’re going to have to make very clear-eyed decisions about ranking them. Five star – spend what it takes; one star – bang. And there will be a lot of one stars.”
Historic Places Trust chief executive Bruce Chapman says the lessons from Christchurch – where magnificent buildings such as the category 1 Cranmer Courts were summarily demolished because they were deemed dangerous – are that if New Zealand’s most important old buildings are to survive long term, they must be strengthened. “Just ignoring the problem and saying ‘gosh, we have to leave that building untouched because it’s a heritage building’ is not a solution.”
Chapman favours bringing listed heritage buildings up to at least 67% of the new building standard over time. “But for that there will need to be some form of financial incentive.”
The problem is that although many New Zealanders claim to love heritage (a 2012 survey cited by Chapman showed one out of every two people have a high level of interest in the protection of historic buildings and places), precious little public money is available to help fund strengthening and protection work. Chapman says the Historic Places Trust and local councils combined have about $2 million a year available to help owners of heritage buildings.
He says changes to the tax treatment of important historic buildings would help. “We would like central government to step into the fray for heritage buildings and provide either accelerated depreciation on buildings that are earthquake prone or, better, allow immediate deductibility of the expense [of strengthening] work.”
Another financial tool that could help is allowing the owners of historic buildings to sell the underlying rights to develop their sites. “For instance, take our building in downtown Wellington, Antrim House, which is an old Italianate Edwardian villa on a quarter-acre section in Boulcott St. If the building wasn’t protected, the district plan would normally allow us to knock it down and build 100% coverage of the site to 25 storeys … If we were able to sell that [right], someone else could acquire the unused component of the floor space and add that to the top of their building.”
Heritage owners could then use the funds from the sale of rights to pay for strengthening and maintenance.
Auckland is the only New Zealand city that allows tradeable rights, but Chapman thinks they could work in Wellington, too. But he acknowledges they wouldn’t help much in places like Dunedin or Oamaru, where there is unlikely to be demand from developers for the right to add extra storeys to their buildings.
“There are also things like fee waivers, rates rebates and low-interest loans attached to rates. You don’t have to pay 100% – all you need to do is get the cost of strengthening down to a level that makes it competitive with demolition.”
But Chapman sees such techniques as being feasible only for heritage buildings with significant public value. “The market really should apply to everything else.”
LACK OF EXPERTISE
Chapman is also concerned about the engineering industry’s lack of expertise in assessing unreinforced masonry buildings. “It’s important for owners not to just take the first piece of advice that says ‘knock it down’. One of the incentives for engineers is to give that advice because it protects them from liability.”
Win Clark, executive officer of the New Zealand Society for Earthquake Engineering and adviser to the Historic Places Trust, shares the concern. “We have a small number of consultants who know very well what to do, but even within that group, you will get variations. But then you have a whole tail of consulting engineers who have not been near this process, who have been doing all sorts of other structural work very competently, but now are being asked to assess earthquake-prone buildings.”
Similarly, few have expertise in retrofitting and restoring historic masonry buildings. “It takes a long time to develop the skills with these materials, because engineers in their training are dealing with engineered materials – reinforced concrete, structural steel, structural timber, etc. So when you have to deal with unreinforced brick masonry, for example, the way that resists earthquake effects is not the same as for a modern building.
“So there is a whole change of gear in terms of what you are supposed to be looking at. It’s the form of the building, the quality of the materials, the quality of the workmanship, whether it has been maintained – there is a whole range of issues that have a different bearing on these older buildings.”
Clark says he’s “disappointed” to see historic buildings being knocked over when there are “obvious” solutions that would bring them up to an acceptable level of earthquake strength. But in the end, the case for restoration comes down to money: “Where there is an economic use for the building and where there is the finance available, yes, it will happen.”
And, as in Henk Tabak’s case, where there is a developer with a healthy appetite for risk and an irrational determination to breathe new life into an old charmer.
Between a rock and a historic place
A Canterbury couple whose listed heritage house used to give them “smug attacks” are now struggling financially and emotionally.
Christchurch has been called the post-disaster heritage demolition capital of the world. One after another, celebrated old buildings have been turned to dust by the dictates of the powerful Canterbury Earthquake Recovery Authority, insurance companies, nervous engineers and owners whose once-loved buildings have become liabilities.
The national guardian of our heritage places, the Historic Places Trust, has been rendered largely mute and helpless as the nationally important Cranmer Courts, Regent Theatre, Holy Trinity Church and dozens more category 1 buildings are wiped out, and while others, such as the ChristChurch Cathedral, remain at high risk of demolition.
But when it comes to Fane Shearsby’s 147-year old-Kaiapoi home, the rules are different. Shearsby and his wife, Sue Chappell, bought the category 1-listed Haskell House for $270,000 16 years ago.
Shearsby worked full-time on it for five years – rewiring, replumbing, replacing borer-ridden joinery, painstakingly restoring timber fire surrounds, stripping paint from the original exterior brickwork and redeveloping the extensive garden.
The materials alone cost $300,000, let alone the value of his labour. Photos of the restored house suggest it was a beautifully executed project. Shearsby admits that he and his wife used to succumb to “smug attacks”, so pleased were they with the results of their labour.
But one thing they didn’t do – no one ever suggested it would be necessary – was earthquake-strengthen it. In the September 2010 quake, the house was damaged but remained liveable. But in February 2011, the triple-brick structure blew out on two sides and Shearsby saw the walls twist and buckle.
Since then it has been too dangerous to live in, and their once-beloved home has become a source of emotional anguish and financial struggle.
Shearsby’s engineer deemed the house “economically unfeasible to remediate” soon after the February quake. But Historic Places Trust engineer Win Clark concluded it could be restored, and drew up a repair and strengthening plan. Shearsby had the proposal priced by a quantity surveyor, who worked out it would cost $1.42 million.
But the payout on Shearsby’s fixed-sum insurance policy was just $268,000; he had neither the money nor the energy to start again with the house. He applied to have it demolished.
In June this year, the trust wrote to Shearsby acknowledging that although the repair cost was likely to be $1 million or more, it would oppose demolition. The property had “high heritage values”, was protected by covenant and ought to be restored “as a contribution towards the cultural well-being of Kaiapoi and the greater region”.
Almost two years on, Shearsby has spent $100,000 on engineers, quantity surveyors and lawyers’ fees but is no closer to resolution. His application for resource consent to demolish is due to go to a Waimakariri District Council hearing; if he gets consent, it is possible the trust will appeal.
The Canterbury Earthquake Recovery Authority, which has used its powers to order the demolition of hundreds of heritage buildings in Christchurch, is nowhere to be seen in the saga of Haskell House.
The Canterbury Earthquake Recovery Authority, which has used its powers to order the demolition of hundreds of heritage buildings in Christchurch, is nowhere to be seen in the saga of Haskell House. In a quirk of Canterbury’s post-disaster legislation, the authority’s power to override the Resource Management Act when it comes to damaged heritage buildings does not extend beyond the bounds of the Christchurch City Council. Because Kaiapoi falls within the Waimakariri District Council’s boundary, Shearsby must obtain resource consent to demolish and the Historic Places Trust is entitled to be heard as an interested party.
Rob Hall, general manager of the trust’s southern region, says it doesn’t want to cause “further stress” to the owners, who he acknowledges are in a “dreadful “situation. The trust’s advice through Clark has been “about pastoral care and trying to help”.
But the trust has “a role to inform the council of the significance of the building when making their decision”. He adds that the owners haven’t applied to the Canterbury Earthquake Heritage Building Fund, which “may well” fill the shortfall between the insurance payout and the repair bill.
But Shearsby says he’s being asked to put massive further investment into a house that would be difficult to sell and insure – for the benefit of the community. “That sounds like the definition of uneconomic to me.”
The financial drain of the past two years has forced him to put his retirement plans on hold, and he and Chappell have been left exhausted and soured. Despite Hall’s professed sympathy for their position, Shearsby says the trust has been adversarial and obstructive. “I would never under any circumstances have anything to do with the Historic Places Trust again.”
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