The Canterbury Earthquake Recovery Authority ("CERA") has declined an application made by a property investment company for a 'section 38 notice' to enable the demolition of one of its buildings in central Christchurch.

Tailorspace Investments Limited owns the Public Trust Office building on Oxford Terrace in Christchurch, which has been assessed as being earthquake prone and requiring strengthening work to achieve the earthquake standard in the new national building standard.  The building is also listed as a Group 3 protected heritage site in the Christchurch City Plan ("CCP") and as a Category 2 historic place in the New Zealand Historic Places Trust Register.  Under the CCP, the demolition of a Group 3 building located within the central city is a discretionary activity, unless the work is undertaken by CERA (in which case the exemptions described below apply). 

Under section 38 of the Canterbury Earthquake Recovery Act 2011 ("Act"), the chief executive of CERA may give written notice to an owner of a building that demolition work is to be carried out on their building.  Upon receipt of such notice, the owner must respond within 10 days stating either that the owner intends to carry out the works, or that CERA may commission the carrying out of the works.  Christchurch City Council has issued CERA an exemption from the requirements of the Building Act 2004 so that demolitions may be undertaken without a building consent when the demolition is undertaken by CERA.  In addition, the Minister for Canterbury Earthquake Recovery has directed a change to the CCP which provides that, notwithstanding any other rule in the CCP, demolition of a building undertaken by CERA pursuant to section 38 of the Act is a permitted activity.

Tailorspace Investments' application for a section 38 notice engendered considerable controversy and condemnation amongst heritage advocates and the wider Christchurch populace.  It was seen as an attempt by the company to bypass the normal resource consenting process and avoid the greater level of public participation that comes with it.  While limited details of CERA's decision were available at the time of writing, Chief Executive Roger Sutton has been reported as saying that the application was declined because it did not meet the Act's criteria.  The decision indicates that even with the pressures facing Christchurch and the special CERA legislation in place, the need to demolish damaged buildings and redevelop will be weighed against any affected heritage values - and approval is not guaranteed.

The decision does not affect Tailorspace Investments' ability to apply for resource consent to demolish the building through normal RMA processes.  As you may recall from an earlier newsletter, the RMA path was recently trod by Lambton Quay Properties Nominees Limited in its highly publicised unsuccessful attempt to obtain consent to demolish the Harcourts Building on Lambton Quay (also a heritage building).  Despite recognising that the building had "significant seismicity issues" and that "in its present state ... cannot support itself financially, let alone make an acceptable return on funds invested for its owner", the Environment Court upheld Wellington City Council's conclusion that the applicant had not undertaken a sufficient investigation of alternatives to total demolition of the building, a factor which had decisive weight in the decision to decline consent.