The dilemma facing the owner of the iconic Harcourts Building in Wellington's CBD was accepted by the Environment Court. He can't insure it, or tenant it, and is currently not raising enough from it to even cover the rates bill.
The Court also accepted that, until strengthened, the building will continue to pose a risk to "life, limb and other property in the event of a major earthquake".
What the Court did not accept was that this was enough to justify pulling it to the ground. Accordingly, the owner's appeal against the refusal of a consent to demolish by Wellington City Council (WCC) was denied.
The Harcourts Building on Lambton Quay is classified category 1 under the Historic Places Act. More problematically, it is also classified at 17% of New Building Standard (NBS), against a minimum requirement of 33%, meaning that it is a serious earthquake risk.
So, in July 2012, the WCC served the owner with a notice under section 124 of the Building Act 2004 requiring him to either strengthen it or knock it down.
Confronted with this apparent choice, the owner - considering that strengthening to 100% NBS was the only marketable option as potential tenants would not accept anything less, and satisfied that this was not commercially feasible – decided to clear the site and build a modern 20 storey office complex.
And that is when he ran into trouble with the WCC, because the Building Act is not the only instrument which comes into play. The WCC's District Plan and the Resource Management Act (RMA) also apply.
The Court1 found that both the Plan and RMA sections 6 and 7 contained "strongly expressed" protections for listed buildings:
- the Plan provided that a listed building could be demolished "only where the Council is convinced that there is no reasonable alternative", and
- the RMA required that, before acceding to demolition, the consent authority must be satisfied that benefits deriving from the proposed new use can overcome the nationally important protection of historic heritage.
The Court found that these tests had not been met. While a number of uses had been explored – refurbishment as office accommodation or conversion to apartments, a boutique hotel, a student hostel – the Court was not satisfied that they had been explored "other than with a handicap imposed by a rigidly set bottom-line figure" which the owner was demanding for the land and property in their present condition.
Neither had the Historic Places Trust's option B, sensitive retention of the building's facades, been adequately investigated.
The Court had some sympathy with the owner's predicament but was clear that both the District Plan and the RMA required that the alternatives were "exhaustively and convincingly excluded" before demolition could be justified.
"We acknowledge that there is an inherent irony in the juxtaposition of the RMA and the Building Act, and a tension between them, both for the Council and for building owners.
"The irony in the present situation is the greater in that the Building Act, dealing with structural integrity and safety, is administered by the same body that may refuse consent under the RMA – the City Council.
"Is there a solution to that tension? We think not....Having a permit under one statute will not necessarily be matched by one under another....," it said.
It will be interesting to see whether the owner appeals this decision to the High Court.
As to the broader implications for other heritage building owners, although district plans will differ from authority to authority, the RMA is obviously national in its application and, at least in its current form, recognises and provides for the protection of historic heritage as a matter of national importance.
In many cases throughout the country, as in this case, the protection is heightened when demolition is classed as a restricted discretionary activity because decision makers have limited ability to consider wider costs and benefits to the building owner and the community. And when the contest is between historic heritage and a commercial return from the building's destruction, the RMA bias is strongly for the former.
So anyone wanting to demolish a listed property will need to be able to demonstrate that the public values offered by the proposed development are not only high but are higher than could be derived through any alternative use of the existing building.
1Lambton Quay Properties Nominee Ltd v Wellington City Council  NZEnvC238
The information in this article is for informative purposes only and should not be relied on as legal advice. Please contact Chapman Tripp for advice tailored to your situation.