Comply or close

Time running out for owners to strengthen city buildings

Time running out for owners to strengthen city buildings

Gisborne's central business district still has buildings that have not been brought up to the new legal standards for earthquake strenthening.

Up to 20 buildings in the city centre are facing potential closure because the owners have not met new legal standards for earthquake strengthening.

The businesses in those buildings would have to relocate.

Gisborne District Council last week issued notices to building owners who had not met the new standards.

Some buildings could be closed within six months.

Council building services manager Ian Petty said the building owners had been given 10 working days to respond.

The council was working with the owners on a case-by-case basis.

Mayor Meng Foon said it was a serious matter for the community as the buildings needed to be strengthened for the safety of workers and the public.

“There is no getting out of this. The council is sticking to the rules in terms of safety for our community.”

Mr Foon said he urged those building owners contacted to engage in a process of either strengthening, selling or rebuilding their property.

“I don’t want to see 23 empty buildings.”

Mr Foon said he could help building owners arrange a meeting with the council.

“Property owners have a responsibility under the law to strengthen to the minimum of 33 percent of new building standards.

“Tenants, however, have been demanding more than 33 percent. Some are about 70 percent and some are strengthened to 100 percent.”

Mr Foon said property owners had had notice for five years about their obligations.

“If you are a tenant you will need to know the status of the property in terms of earthquake strengthening.

“If you have a Category 1 heritage building, there is financial support available for strengthening.”

A Gisborne landlord spoken to by The Herald said he knew there were many old buildings in the city centre that still needed strengthening.

There had also been an impact on rent in strengthened buildings.

It was uneconomical to strengthen an old building and still ask for a low rent. It was usually cheaper to pull the building down and build a new one, he said.

Higher rents for earthquake-strengthened buildings was a reflection of the quality and standard of the building, said the landlord.

Bayleys commercial and industrial sales and leasing agent Colin McNab said there was still a lot of activity out there but people often asked him the same thing — “why the empty shops?”

But compared with cities like Napier and Hastings, there were not that many, he said.

Since the start of the year he had signed up at least eight new leases — some of those retail.

There was a raft of factors as to why some retail spaces remained empty in Gisborne’s CBD, he said.

Some retail spaces took longer to lease than others because they were not seen as being in the right area for foot traffic.

Mr McNab said a few shops had closed recently but that was always going to happen if businesses did not meet certain sales targets in Gisborne.

There was also the issue of some buildings not being earthquake compliant. National or larger companies, or government departments, would not put their staff or clients in buildings that weren’t, he said.

Sometimes demolishing non-compliant buildings cost more in the long run than making them compliant, or building a new one.

“That’s why they are sitting there”.

If they were strengthened, property owners then needed a higher rent to give them a decent rate of return on their investment.

Mr McNab said it was important property owners strengthened their buildings to the highest possible level rather than just being above the minimum compliance level.

“It’s not just the district council that determines the rate but the people who pay the rent. Some national companies won’t let their staff in a building not earthquake compliant, insurers may not offer cover and lending institutions won’t lend money either.”

Some older owners did not have a desire to spend such money on properties. They left their children to deal with the problem, or sold them on to developers.

“I take my hat off to what has already happened on the main street, with lots of buildings already brought up to the right standards, with a number now at 100 percent new build standard or higher.

“This is effectively future-proofing the building while giving tenants peace of mind . . . it’s considerably lifting the quality of the Gisborne CBD.”

But at the same time, developers would not invest in quality commercial real estate unless there was a good enough return for them. That brought the issue back to rent.

“I have seen comments related to landlords charging high rents, however, in comparison with other similar-sized cities such as Napier and Hastings, our commercial rental rates are not excessive.

“Gisborne is still seeing good demand for commercial investments across the range, which must be positive for this area.”

Mr McNab said the main street remained almost full, with several new inquiries received every week from a range of potential new tenants.

The former Whitcoulls building had been sold and there were plans for it to be totally upgraded in the next few months, offering a medium-to-large tenant an exciting option in a great area.

Other shops being vacated had already attracted interest to lease by prominent companies.

“Gisborne has a very positive feel in the commercial sector for leasing and investing”.

For one business owner, an upcoming move from Gladstone Road to Lowe Street is all about cost savings.

Driftwood owner Sarah Rush said she would save $800 a month — dropping from $2000 to $1200 — in rent at her new premises on Lowe Street.

This was “massive” for a small business like hers which offers massage and spa treatments.

She would be able to afford to employ two full-time staff members after her business moved at the end of next month.

Many local businesses just survived during winter, with profit not adding up to the rent, she said.

■ Incentives were announced by the Government last week to help regional heritage building owners located in medium or high seismic risk areas, which includes Gisborne.

A new Professional Advice Grants is available for owners at the beginning of the process to provide up to 50 percent of the costs to get a range of professional advice, like engineering assessments and architectural advice.

To encourage more building owners to get involved, regional applicants may also receive up to 67 percent of professional advice costs if they work with neighbouring heritage building owners and form a multiple building project.

Funding is available to regional heritage building owners to undertake the upgrade work. They are now eligible for up to 67 percent of seismic upgrade works costs.

Applications are assessed three times a year, with upcoming rounds closing on March 22 and July 29.

Up to 20 buildings in the city centre are facing potential closure because the owners have not met new legal standards for earthquake strengthening.

The businesses in those buildings would have to relocate.

Gisborne District Council last week issued notices to building owners who had not met the new standards.

Some buildings could be closed within six months.

Council building services manager Ian Petty said the building owners had been given 10 working days to respond.

The council was working with the owners on a case-by-case basis.

Mayor Meng Foon said it was a serious matter for the community as the buildings needed to be strengthened for the safety of workers and the public.

“There is no getting out of this. The council is sticking to the rules in terms of safety for our community.”

Mr Foon said he urged those building owners contacted to engage in a process of either strengthening, selling or rebuilding their property.

“I don’t want to see 23 empty buildings.”

Mr Foon said he could help building owners arrange a meeting with the council.

“Property owners have a responsibility under the law to strengthen to the minimum of 33 percent of new building standards.

“Tenants, however, have been demanding more than 33 percent. Some are about 70 percent and some are strengthened to 100 percent.”

Mr Foon said property owners had had notice for five years about their obligations.

“If you are a tenant you will need to know the status of the property in terms of earthquake strengthening.

“If you have a Category 1 heritage building, there is financial support available for strengthening.”

A Gisborne landlord spoken to by The Herald said he knew there were many old buildings in the city centre that still needed strengthening.

There had also been an impact on rent in strengthened buildings.

It was uneconomical to strengthen an old building and still ask for a low rent. It was usually cheaper to pull the building down and build a new one, he said.

Higher rents for earthquake-strengthened buildings was a reflection of the quality and standard of the building, said the landlord.

Bayleys commercial and industrial sales and leasing agent Colin McNab said there was still a lot of activity out there but people often asked him the same thing — “why the empty shops?”

But compared with cities like Napier and Hastings, there were not that many, he said.

Since the start of the year he had signed up at least eight new leases — some of those retail.

There was a raft of factors as to why some retail spaces remained empty in Gisborne’s CBD, he said.

Some retail spaces took longer to lease than others because they were not seen as being in the right area for foot traffic.

Mr McNab said a few shops had closed recently but that was always going to happen if businesses did not meet certain sales targets in Gisborne.

There was also the issue of some buildings not being earthquake compliant. National or larger companies, or government departments, would not put their staff or clients in buildings that weren’t, he said.

Sometimes demolishing non-compliant buildings cost more in the long run than making them compliant, or building a new one.

“That’s why they are sitting there”.

If they were strengthened, property owners then needed a higher rent to give them a decent rate of return on their investment.

Mr McNab said it was important property owners strengthened their buildings to the highest possible level rather than just being above the minimum compliance level.

“It’s not just the district council that determines the rate but the people who pay the rent. Some national companies won’t let their staff in a building not earthquake compliant, insurers may not offer cover and lending institutions won’t lend money either.”

Some older owners did not have a desire to spend such money on properties. They left their children to deal with the problem, or sold them on to developers.

“I take my hat off to what has already happened on the main street, with lots of buildings already brought up to the right standards, with a number now at 100 percent new build standard or higher.

“This is effectively future-proofing the building while giving tenants peace of mind . . . it’s considerably lifting the quality of the Gisborne CBD.”

But at the same time, developers would not invest in quality commercial real estate unless there was a good enough return for them. That brought the issue back to rent.

“I have seen comments related to landlords charging high rents, however, in comparison with other similar-sized cities such as Napier and Hastings, our commercial rental rates are not excessive.

“Gisborne is still seeing good demand for commercial investments across the range, which must be positive for this area.”

Mr McNab said the main street remained almost full, with several new inquiries received every week from a range of potential new tenants.

The former Whitcoulls building had been sold and there were plans for it to be totally upgraded in the next few months, offering a medium-to-large tenant an exciting option in a great area.

Other shops being vacated had already attracted interest to lease by prominent companies.

“Gisborne has a very positive feel in the commercial sector for leasing and investing”.

For one business owner, an upcoming move from Gladstone Road to Lowe Street is all about cost savings.

Driftwood owner Sarah Rush said she would save $800 a month — dropping from $2000 to $1200 — in rent at her new premises on Lowe Street.

This was “massive” for a small business like hers which offers massage and spa treatments.

She would be able to afford to employ two full-time staff members after her business moved at the end of next month.

Many local businesses just survived during winter, with profit not adding up to the rent, she said.

■ Incentives were announced by the Government last week to help regional heritage building owners located in medium or high seismic risk areas, which includes Gisborne.

A new Professional Advice Grants is available for owners at the beginning of the process to provide up to 50 percent of the costs to get a range of professional advice, like engineering assessments and architectural advice.

To encourage more building owners to get involved, regional applicants may also receive up to 67 percent of professional advice costs if they work with neighbouring heritage building owners and form a multiple building project.

Funding is available to regional heritage building owners to undertake the upgrade work. They are now eligible for up to 67 percent of seismic upgrade works costs.

Applications are assessed three times a year, with upcoming rounds closing on March 22 and July 29.

Buildings and businesses

Owners of these buildings have been served notice to comply with new earthquake strengthening requirements.

Former National Bank (now Kingfisher Bar) — 31-35 Gladstone Road

Snackisfaction (AJ Cox building, unreinforced masonry part) — 51 Lowe Street

Friends Indian Restaurant — 59-61 Gladstone Road

Vitality Foods building — 63 Gladstone Road

Mama’s Sushi — 68 Gladstone Road

Kingpin — 73 Gladstone Road

James Craig building (Trade Aid and Perfect Roast) — 105 Gladstone Road

James Craig building (Shoe Envie) — 109 Gladstone Road

McKee building (adjacent to Kings Theatre) — 113 Gladstone Road

Kings Theatre (behind Flight Centre) — 117 Gladstone Road

Verve Cafe and the Discount T Shop — 119 Gladstone Road

Noodle Canteen — 181 Gladstone Road

Whitcoulls (empty, was Save Lots) — 182 Gladstone Road

Turkish Gallery — 204 Gladstone Road

The Little Hair Shop — 217 Gladstone Road

Lowes Caterers (now Brezz’n) — 86 Derby Street

Engine Rebuilders — 275 Palmerston Road

Midway Furnishers (now empty) — 293 Gladstone Road

JS Allan & Son showroom and office (now Spa & Pool Warehouse) ­— 186 Grey Street

JS Allan & Son sheetmetal shop (now empty) — 188 Grey Street

Also — GDC Service Centre (front only, now empty, scheduled for demolition) — 476A Waiapu Rd, Te Puia Springs

Waipiro Bay Church (eligible for exemption under the Building Act) — 12 Marae Road, Waipiro Bay

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