A commercial tenant in an Auckland office building is considering legal action against Auckland Council after it incorrectly issued an earthquake prone building notice on the property, which meant the tenant has had to relocate to another building.
The council was found to have incorrectly issued the earthquake prone building notice in respect of the former Baycorp office tower, which occupies a prominent site on the corner of Hopetoun and Hereford streets on the fringe of Auckland's CBD and is currently being converted to upmarket apartments by Tawera Group.
The dispute between the council, the buildings's owner (a related party to Tawera Group) and alarm monitoring company Alarm New Zealand which leased one of the floors in the building, began in August 2012 according to a recent Building Act determination by the Ministry of Business Innovation and Employment (MBIE).
That's when MBIE wrote to Auckland Council identifying the building as having non-ductile columns, which meant it would require an engineering assessment to determine if there were any safety issues in the event of an earthquake.
The council passed on this advice to the owner of the building at the time.
In October 2012, Alarm New Zealand signed a lease for one floor in the building for a term of 10 years, plus a right of renewal for a further five years and moved in.
In October 2013, the building's owner applied for a consent to convert the building to residential use, which was approved.
In December 2013 the building was sold to its current owner, subject to the existing commercial leases, including Alarm New Zealand's.
The new owner, a company ultimately owned by Tawera Group chairman Mike Mahoney, then applied to the council for consent to add three new levels to the top of the existing office tower and convert the commercial space below to 91 apartments, which would include adding balconies and a new facade.
The new owner also commissioned an engineer to assess the seismic strength of the building and whether any strengthening work would be required.
The engineer recommended wrapping the building's concrete columns with carbon fibre and constructing a steel frame within the stairwell.
Additionally, the engineer wrote to the council, requesting it to issue an earthquake prone building notice which would require the strengthening work to be carried out.
The council issued the earthquake prone building notice which stated that an earthquake of at least moderate intensity would be likely to cause death or injury to people in the building or damage to other property.
Once the notice was issued, the building's owner was able to require its commercial tenants to vacate their premises to allow the strengthening work to be carried out.
Alarm New Zealand objected to this and commissioned its own engineer's report, which found that the seismic rating of the building's columns approached 60% of new building standard and that the stairs were rated at 100% of new building standard, giving the building an overall rating of 66% of new building standard.
That would mean that the building should not have been classified as earthquake prone, making it unnecessary to vacate the building while structural improvements were carried out.
The dispute was sent to MBIE for a determination which found in favour of Alarm New Zealand and that Auckland Council had incorrectly used its powers to issue the earthquake prone notice.
However by the time the determination was made, Alarm New Zealand had already been required to relocate to temporary premises, and company director Neville Clifton said it would probably be August next year before it could return to the Hopetoun St building.
In light of the MBIE determination, his company is now seeking costs from the building's owner and is also awaiting advice about the possibility of taking legal action against Auckland Council.
Tawera Group chief executive David Mahoney referred interest.co.nz to Mike Mahoney for comment on the issue.
Mike Mahoney is overseas and he and Auckland Council are yet to respond to calls from interest.co.nz.
Construction work on the building is now well underway.
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3 Comments
Auckland Council's Earthquake Prone Building Policy didn't really envisage the situation where notice of a problem was brought to them. It assumes that AC will do all the initial investigating and drive the process themselves from there.
The policy includes process steps where the initial assessment can be challenged or reviewed before the earthquake prone building notice is issued.
It looks from your report as though AC were blindsided by events not happening the "proper" way.
And it looks like the owner's engineer had the wind fair up them after the CTV Building debacle. Bit of overshoot there.
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