Central Christchurch recovery is under threat as quake-weary property owners start using their insurance money to buy new buildings in Auckland and overseas.
On Friday, the 14-storey Westpac building on Cashel St was approved for demolition, the last of Miles Middleton's four central Christchurch high-rises to be be pulled down because of quake damage.
Middleton said he wanted to rebuild in central Christchurch, but without changes to the seven-storey height restrictions in the draft central city plan, he would be forced to take his insurance money to Auckland or even Brisbane.
"A lot of people that were keen to rebuild here have gone cold," he said.
"I would love to rebuild here but at the end of the day I don't want to go broke."
Even if the height restrictions were altered, Middleton said he would probably buy some buildings outside Christchurch to generate income while his Christchurch properties were rebuilt.
Middleton's four high-rise buildings – including the DTZ building on Cashel St – made up 22,000 square metres of office space and his insurance payout will run into the tens of millions.
Christchurch developer Ernest Duval, who fronts the CBD property group Core, said insurance money was already draining out of the central city, with owners who had been without tenants since the September 4 quake the first to look elsewhere to invest.
"The simple solution for many property owners is to take their money elsewhere to restore their income stream," he said.
Most central Christchurch property owners were not developers and would rather buy a building in Auckland than grapple with a consents hearing, tougher building standards and the ongoing shadow of possible Government intervention in Christchurch, he said.
Others simply could not afford to wait until the central city reopened in April next year, Duval said.
"It is just too difficult, even for some of the most seasoned developers."
The draft plan had exacerbated this growing reluctance to reinvest in the city, he said. "There is billions of dollars these guys are entitled to [through insurance] and we have to keep it here."
Duval has also been pushing Government to underwrite "reconstruction" bonds to fund the central city rebuild but the idea has not gained much traction.
Without some assistance, large swathes of central city would remain vacant lots for decades, he said.
His concerns were echoed by the Central City Business Association, which yesterday lodged a submission on the draft plan. It said the plan needed to do more to encourage developers back into central city.
"There will be huge risks involved in doing developments inside the CBD for the first 10 years and we should be looking to shorten this high-risk period or we will find the serious rebuild will take 20 or more years to get under way."
Christchurch City Council has moved to douse concerns about the draft plan. At a meeting with property owners this month, council strategy and planning general manager Mike Theelen said owners of multi-storey building would retain the rights to rebuild to the same height. Theelen was unavailable for comment at time of print.
But Duval said the decision ultimately lay with central Government.
- The Press