Cruising down the Avon river with the CBD rebuild underway in the background. Photo / Chris Barton
Property developer Lisle Hood labelled it a "land grab", telling TVNZ it was "public terrorism on the population of Christchurch, particularly business owners". Long-term property investor Denis Harwood told The Press the acquisition process was "theft by rezoning". And the government body doing the grabbing - the Canterbury Earthquake Recovery Authority (Cera) - was called a "den of thieves".
What's got Christchurch property owners so riled is that the National Government - an arch defender of property rights - is nationalising land. It doesn't match the scale of the Maori land confiscations of the 1860s, but Cera's plan to compulsorily acquire 53ha of central Christchurch private property for an estimated $636 million has certainly generated outrage and a sense of dispossession.
Adding to Cera's woes, online protest andpetitions against the Christchurch Central Recovery Plan, aka the Blueprint, are breaking out all over. The sentiment is perhaps best captured by a cardboard sign on the cordon fence at the Worcester Boulevard bridge over the Avon River: "Hey Rodger (sic) Wazza, Gerry, Bob and Tony. Can we have our democracy back please?"
Earthquake Recovery minister Gerry Brownlee may have backed down from his view of a week ago that Christchurch residents were "carping and moaning" and tended to "buggerise around on Facebook all day", but he ain't seen nothing yet.
Initial reaction to the Blueprint, announced on July 30, was overwhelmingly positive. The plan envisaged a much more compact central city core - reduced from 90ha to 40ha. Notably absent were proposals for a renewable energy scheme and integrated light rail transport that had been part of the Christchurch City Council's previous draft plan. There would, however, be 10 "anchor projects" including an Avon River precinct, a new convention centre, a metro sports facility and something called "the frame"- a wide L-shaped park-like space wrapping around the southern and eastern sides of the new core.
In the foyer of the Aurora Centre for the Performing Arts at Burnside High School, guests attending the TEDxEQChCh event at the beginning of this month were wowed as student ambassadors from the University of Canterbury took them on a 3D fly-over of the future city. The "Liquid Galaxy" display featuring six plasma screens arranged in a semicircle was stunning, allowing a zoom-in, Google Earth-like exploration of the new city's layout.
But when some 880 letters went out to central city property owners advising them their property was to be compulsorily acquired under the powers of the Canterbury Earthquake Recovery Act 2011, the mood changed. Landowners wanted to know what compensation they would get. And why, in a city that had lost so much, were perfectly good buildings now going to be demolished? Others wondered just who would be able to afford to move into the new CBD.
Under the CER Act compensation is payable at the post-earthquake value of the land, not the pre-quake value. Quite what the new value is remains to be seen, but at the moment much of the ground looks like wasteland, well and truly munted.
Demolition is relentless, with the last of the tall buildings expected to be down by July next year. On Armagh St, the 220-tonne long-reach excavator known as Twinkle Toes bites into the skeletal concrete frame of the PricewaterhouseCoopers building. Nearby, in Gloucester St, machines rake the mangled debris of the Farmers parking building. Along High St, propped historic facades stand in hope, the backs of the buildings torn open, with bricks and rubble still strewn all around. In the midst of the cleared lots, many now used as carparks, the lone survivors - Calendar Girls, Les Mills gym and the former High St Post Office, built in 1932 - look sad. Heroic. As do the few hopeful signs of revival: piles being rammed for a new private hospital in Kilmore St; the Ibis hotel re-opened; the Cashel St shopping mall built with shipping containers; and the framing timber of the EPIC sanctuary building on Manchester St. There's hope, too, in the surreal image of a punt on the Avon River gliding sightseers through the post-apocalyptic landscape.
"All of the land in the central city can be built on," says CERA's Christchurch Central Development Unit (CCDU) implementation manger Greg Wilson when we meet in one of the city's few surviving highrise buildings - the steel framed 12-storey HSBC Tower, where CERA has taken up residence. In the new city where the height limits are seven storeys in the core and four storeys in the surrounds, it will stand tall, with a few others such as Rydges Hotel, possibly the Forsyth Barr building and the 23-storey Pacific Tower, home to the Rendezvous Hotel. The only land where no building is permitted is a 30m strip either side of the Avon. New building on central city land now comes with 10-20 per cent added costs due to the need for more extensive, earthquake-proof foundations.
Wilson says there are 884 "land footprints" to be acquired. That equates to 1300 "land parcels" (different lot numbers under the same certificate of title) including about 65 owned by the Christchurch City Council which will also be acquired. Most of the land - some 29.5 ha - is for the largely open space or "green frame" bounding the southern and eastern sides of the new central city. The remaining 23.5ha is needed for new buildings, including a convention centre, performing arts auditoria, library, bus interchange and sports stadium.
A lot of land to buy. How much is it going to cost? "We have done some numbers on that, but I don't have a number to give you," says Wilson. "Telfer Young and Colliers are working out what the land valuation is going to be like, so we will have an idea about whether the land is in the region of $500-$600 a square metre or, if it's a highly desirable area, whether it's closer to $2000-$2500 per square metre." The Herald's rough estimate at an average cost of $1200/sq m puts the total acquisition cost at $636 million.
There are no costings provided for the anchor projects. But based on commercial building costs of around $3000/sq m, rising to $3500-$4500/sq m for more complex projects like the covered stadium and convention centre, there have been some estimates. The Offsetting Behaviour blog quotes a source suggesting the stadium will cost $506 million, the convention centre $460 million and the metro sports facility $227 million - with a total building cost for the anchor projects at $1.6 billion. The Press puts the convention centre cost at $220 million. Presented with the information, CERA had no comment on the numbers.
Wilson says the first letter to property owners was simply to inform them of the Crown's intentions and to offer an "acquisition by agreement" discussion, on a willing seller, willing buyer basis. By the end of next month all owners will have received another letter - the formal compulsory acquisition notice to take the land.
"If we cannot come to an acquisition by agreement then there will be a second notice accompanied with a proclamation by the Governor General that the land is to be vested into the Crown," says Wilson. "Once that proclamation is made, 14 days later the property will pass into Crown ownership. And then the former owner will go through a formal compensation process for that which needs to be concluded within two years."
In other words, an offer you can't refuse. Wilson says the CCDU wants to acquire the land for initial anchor projects - the frame, convention centre, metro sports facility and Avon River precinct - by the end of the year. It expects to have acquired all the land by June next year.
"There are property owners out there who have thrown their hands in the air to say come and acquire me," says Wilson. "It's just taken a whole lot of worry away from them. In some cases it has got them out of a fairly difficult financial situation."
Others are finding it difficult to understand why, in an area that has seen 70 per cent of its buildings demolished, more buildings - perfectly functional ones - will be pulled down. "There will be additional demolitions required as a result of the recovery plan," confirms Wilson, referring to the land being taken for the convention centre and the frame.
Examples include the temporary city library in Lichfield St, which is needed for the justice and emergency service precinct. The central library in Gloucester St, which was damaged in the earthquakes but could be repaired, will now also be demolished because it's in the way of the new convention centre. Then there is the vexed question of whether the Warren and Mahoney designed Town Hall will be demolished, and how that affects the proposed performing arts precinct on the corner of Colombo and Armagh Streets. The Christchurch City Council has yet to make a decision on the building's fate.
"I think they've [the council] reconciled themselves to the fact that the Lions Room and the James Hay Theatre will go," says Wilson "It's really a consideration of what happens to the auditorium." That seats about 2,200 which, if it can be saved, would require a change of plan for the proposed 1500-seat and 500-seat auditoria in the new performing arts facilities. "If the Town Hall stays, we'll look at doing something slightly different on that site - move the performing art centre further south and leave it to the Millennium Hotel Group and Philip Carter, [Christchurch's richest man] the two major land owners there."
Other functioning businesses, suddenly finding their premises in the way of proposed anchor projects, have expressed concern at the Blueprint's logic. The historic Ng building, a former Victorian warehouse in Madras St which houses nine businesses, including two art galleries, was one of the first central city buildings to reopen after the earthquakes. It's now likely to be pulled down to make way for a 35,000-seat, covered sports stadium. Co-owner Roland Logan is dismayed. "We're the ones rebuilding this city," he told The Press. "The authorities have done nothing so far except demolish things."
Similar concerns are raised by the Ministry nightclub in Lichfield St, which owner Bruce Williamson had planned to re-open, but now finds his property will be taken for a new bus exchange. Calendar Girls strip club in Hereford St is another building likely to be demolished to make way for the frame. But the nearby Les Mills gym is likely to be able to stay, according to CCDU director Warwick Isaacs, who told The Press he did not believe the strip club fitted the concept of the eastern frame.
Other new buildings such as Westende House built by KPI Rothschild Property Group, on the corner of Manchester and Worcester streets, have also been given the nod to stay inside the eastern frame. But the dozen or so car saleyards that inhabit the southern frame between Tuam and St Asaph streets, are likely to be given their marching orders.
Which raises the question: what exactly is the purpose of the frame? "The rationale behind the frame is to, by and large, contain the redevelopment, but not constrain the redevelopment," says Wilson. He says underlying zoning for both the southern and eastern frames is mixed use, with the southern described as having "campus-like" buildings, and the eastern as a more open green space.
Before the earthquakes, there were 6000 businesses in the central city, with a daily working population of 51,000. About 7000 residents lived in some 3500 households, mainly in the north-east area of city. "We are expecting more businesses to go back into the central city than were there before," says Wilson. "It's not replacing the same business necessarily, it's also attracting new businesses." The new plan envisages many more residents - 22,000 by 2041 - in the city area bounded by Moorhouse, Fitzgerald, Bealey and Rolleston avenues.
"Over the next 8-10 week period there will be a good stocktake of the buildings in there," says Wilson of the frame. "To look at what can stay in its current form, what can stay, but has to be repurposed, what needs to go and how do we transition those businesses out of that current frame between St Asaph and Tuam streets."
He says the Crown needs to clearly articulate its exit strategy from land the ownership of land in Christchurch. "The legacy the crown doesn't want to leave here is that it is a massive land owner in the city." In many cases small parcels of acquired land will be amalgamated into more economical propositions.
"We'd be looking to acquire property, re-title it, re-service it and rebuild something there - not by the crown, but perhaps by a private developer." He says the detailed brief and design process will determine the future ownership structure - whether the crown contributes the value of the land to the project, or whether it retains an interest in the property by way of an easement or covenant to achieve the desired amenity.
Just what property owners are able to secure as compensation remains to be seen. But some who have put in considerable remedial work to their buildings are understandably concerned because the CER Act does not include compensation for economic or consequential loss. "We've got a lot of compromised or damaged buildings sitting on some of the land that the crown needs to acquire," says Wilson. "So we need to consider what the value of those buildings in their damaged state is. That's why it's not an exact science."
Some are now seeing the green fame for what it is - a mechanism to mop up excess land in the city and artificially drive up the price of the city's wasteland. "The frame, in tandem with zoning provisions, reduces the extent of the central city commercial area so that the oversupply of land is addressed," says theBlueprint. "It will help to increase the value of properties generally across the central city in a way that regulations to contain the central core, or new zoning decisions, could not." The document goes on to say a further purpose of the frame is to create a buffer zone for the core to expand in the future - "if there is demand for housing or commercial development".
Or, as Puddleglum at The Political Scientist blog puts it: "This building and development pocked 'green frame' turns out to be a gigantic, state imposed 'gap filler' or 'greening the rubble' initiative awaiting future development and expansion of the CBD." The blog points out the obvious effects of reducing the supply of land. "Simply, rents are set to skyrocket in 'The Core' and the lucky landlords left with property there, or the investors with enough money to buy there, are set to make a killing."
Columnist Matthew Hooton made a similar point about the plan in NBR. "It halves the size of the CBD, making land scarce to improve returns per square metre, creating competition among investors and developers for the best spaces. There is going to be a gold rush."
Speaking at TEDxEQChCh a month after the Blueprint's release, Canterbury Development Corporation's Tom Hooper outlined the city's underlying problem. "Repairing things is not enough. Christchurch's population also needs renewing. Even before the earthquakes our population growth had levelled off. And like all western world economies we have a rapidly aging workforce."
What the city needed was "a great third great wave of migration" - especially young, IT savvy entrepreneurial types. The chief executive of the Christchurch City Council's economic development agency argued that despite the earthquakes, the city still had a lot to offer - wide open spaces, natural beauty, an "innovation system", especially in agritech, and world class tertiary institutions, research institutes and incubators. After the rebuild, the city, with new infrastructure and cutting edge communications networks, would be even better. "Talented people are going to want to come here," enthused Cooper.
A week later, Layton Duncan founder of Christchurch Polar Bear, a company that builds apps for Apple devices, announced he'd had enough and was leaving Christchurch and moving his business to Melbourne. His reason: "The CCDU blueprint plan was kind of the final straw for me," he told Radio New Zealand. "We have this enormous opportunity for Christchurch and what they've produced is an extremely superficial plan. It ignores all the real opportunities that Christchurch has."
Duncan's departure is significant, not just because he's exactly the sort of person Cooper had argued the city desperately needed to attract, but also because he had been such an advocate of staying in Christchurch after the earthquakes. Duncan referred to TEDx speaker, Ernesto Sirolli who had told the audience: "There is a new generation of entrepreneurs dying of solitude in Christchurch." Words Duncan said resonated with him. "His talk was about how you enable, empower and tap the energy that local people have for their community to create the environment they want, to create a better place. Here in Christchurch we do not have that."
Duncan was calling for collaborative community involvement in the rebuild - a recurring theme from other speakers at the TEDx event, frustrated by the prescriptive top-down decisions being imposed on them. Wil McLellan, the co-founder of EPIC - the enterprise precinct and innovation campus - talked about a new business model that developed from having his games software company offices destroyed in the earthquake. A business partner offered him a corner of his premises to share. "Not only did I notice people collaborating in times of adversity was very powerful," said McLellan. "But also collaboration was happening between the companies in the building. People wanted to help each other. They wanted to work together."
McLellan began thinking the "disruptive collaboration" he found himself in was actually an efficient way of operating - especially the sharing of facilities like boardrooms and printers. To cut a long story short he and business partner Colin Andersen have created the EPIC sanctuary building - 2600sq m of tenantable space which will soon house around 200 employees and 16 high tech companies.
The building, designed as a temporary structure that can be disassembled and moved elsewhere, has cost around $6 million, helped by $1.8 million of government investment. It sits on the edge of the newly designated innovation precinct of the Blueprint - the "knuckle" area joining the southern and eastern frames - on a property owned by the Christchurch City Council, which has provided it to EPIC rent free for five years. The end result is a low cost, shared facilities premises with plenty of spaces for collaboration that can be rented for $250 per square metre.
The land will now be acquired by the government, which one imagines will continue EPIC's rent holiday. As the new major land owner of the new city, the government is in the driving seat for attracting new development. To stimulate community involvement, and perhaps prevent more people like Layton Duncan from leaving, it could, if it wished, extend such rent holidays to others. For small businesses concerned there will be no place for them in the new city because prime commercial space is likely to be rented at more than $400/sq m, EPIC is a beacon of hope.
By Chris Barton | Email Chris