It took Auckland Council’s finance & performance committee 50 minutes yesterday to decide to bring $4.7 million of budgeted maintenance on its new headquarters building forward to remedy cladding issues. The work is expected to take at least 18 months.
The time taken to deal with what seemed a straightforward issue wasn’t altogether surprising, considering the council’s governing body took 6 hours the day before to conclude that a process decision excluding consultation on a unitary plan zoning change was plain wrong.
The cladding presents serious dangers to visitors to the building at 135 Albert St, on the corner of Wellesley St, but most of the debate was on peripheral issues – the council should sell the building, the council shouldn’t have bought it in the first place.
That might have made Cllr Cathy Casey’s joke at the end of the debate all the more pertinent: she noted that corporate finance & property general manager Kevin Ramsay had said in his presentation the council was responsible “for the safety of staff, tenants & visitors to the building & surrounding area” and, in his report: “Health & safety for staff, tenants & the public has been at the forefront of the actions to date.”
Said Cllr Casey: “What about the councillors?” I’m sure there was a general shrug of the shoulders around the back of the chamber.
The council bought the former ASB Bank Centre from Brookfield Multiplex for $104 million in 2012. It’s since spent $25 million directly on fitting the premises out and another $28 million on additional works, all budgeted for.
The additional works have included building plant & lighting system upgrades (LED introduced), and $4.2 million was set aside to deal with known issues with the building façade.
Mr Ramsay said nothing in the due diligence investigations in 2012 or in subsequent examination identified structural stability issues or weathertightness concerns, and there was “a low likelihood” of anything falling from the building: “The issue is around the stonework cladding and how it is fixed to the building.”
Invasive examination by Mott MacDonald in 2013, including removal of some stone at the podium level, identified quality issues in relation to the fixings, including:
- non-standard fixing design
- insufficient, missing or loose bolts & pins
- inadequate or missing packing, which meant the pins were supporting the weight of the stones
- some deflection in the fixings, support rails & stone
- corrosion in bolts & support rails, and
- some stone had no mechanical fixing, and was adhered using epoxy with an uncertain lifecycle.
The budget advance is to make the cladding safe, including enabling works. The first part of that exercise will be to hang scaffolding at the top of the 29-storey building to stop anything falling, and a working platform over the podium to capture anything falling before or during project works.
The peripheral issues
Cllr Christine Fletcher said the 2012 purchase was hotly contested and that buying a 25-year-old building was questioned: “The best thing to do would be to sell that building. Obviously you have to do the work. We now have this dilemma. I’m only raising it because I don’t want to see the same thing in the future. I’d like to see us sell it and see some new information relating to procurement.”
Mr Ramsay: “At the time a full business case was undertaken. The valuation was significantly less than the other option at the time. We do know the valuation of the building has gone up, we know people find it an attractive building. Part of the task now is to look at our property portfolio and see where we go. It is functioning very well for what was intended.”
Cllr Fletcher: “One of the smartest things to do would have been to put in smart lifts.”
Mr Ramsay: “It is something to be looked at. At the time, there was concern about spending any more money.”
Cllr Chris Darby: “I personally don’t feel it’s worth relitigating the purchase. This is potentially an enormous problem because we don’t know what’s in behind yet. Let’s sight the warranties. That legal redress is quite important.”
Mr Ramsay said the building was unlikely to have a 25-year warranty on the products, but staff would exhaust the warranty liability issues.
Cllr Callum Penrose was one who’d changed his mind on the purchase: “I said at the time we didn’t have a full list of assets. We shouldn’t have bought the building. Since then we’ve moved 3 buildings into one. The shortage of office space in Auckland now, I know the chief executive has had an offer from a company in Europe to purchase it. A building of that size & where it is, you’re going to have costs. We’ve just got to get on with the job.”
Cllr Dick Quax noted that “there still seem to be quite a few unknowns about this. This is not going to be cheap by the look of things. We just have to suck the seed.”
Cllr Quax thought the latest valuation on the building was $133 million, but Mr Ramsay said that was the valuation for rating purposes. It had reached $150 million in 2014 and was due for revaluation in 2017.
Cllr Mike Lee said he’d never supported buying the bank building or the move away from the civic square: “I would put this up, I’m sure we could get a reasonable price especially with the city rail link [an entry to the new Aotea station will be a short distance from the Albert St building’s door], some uplift there.
“But I think some mistakes buying this building, moving away from the civic square, the best approach is to sell it to the private sector, move back to the civic building and if extra accommodation is needed do some work around the land we own on the civic square.”
Cllr Ross Clow expected the value “will be well above $200 million at the moment”. Given present international economic conditions including negative central bank interest rates around the world, sale could be timely.
Deputy mayor Penny Hulse said this would be raised when the council discusses its asset sales review.
Comment: After all that, one question that eluded the councillors was the time it might take for the council to grant itself resource & building consent for the work. You might think a quick decision would be automatic but, as the owners of many other buildings around the city have discovered with cladding problems, the solutions are not often simple – and liability precludes haste.
Image: The view from the old civic administration building across the Aotea Centre to the ASB Bank building before the council bought it in 2012.
Attribution: Council committee meeting.