When offices move away, Wellington suffers

00:53, Jun 05 2011

Office workers are the lifeblood of Wellington and the city's heart is in serious danger of losing the critical mass and mix of people that make it work, says Property Council president Ian Cassels.

It needs to stop businesses that employ city workers from drifting north, not just to Auckland but also out of the CBD.

It was absolutely vital to stem the losses to avoid a repeat of what happened after the 1987 stockmarket crash, where the city went into the doldrums for the best part of a decade.

"Wellington is facing severe challenges in relation to its office vacancy which is forecast to grow to 250,000 square metres by 2013," he warned in submissions made to Wellington City Council's draft annual plan.

And in submissions this week against the proposed new Kate Sheppard Exchange - a big high- rise to house the Social Development Ministry at the railway station bus terminal - he said Wellington's office vacancies were projected to reach 17 per cent by December next year.

Mr Cassels said commercial offices and the workers they employ generate most of the city's discretionary revenue, but little was being done to ensure that continued.


"We're quite rightly spending a lot of money out of the downtown levy on tourism and keeping our hotels full, and I reckon that works quite well. But the herd of elephants in the room is the massive number of office buildings that are emptying out in similar proportions to what happened between 1987 and 1990.

"In comparison to a tourist who stays typically one and a bit days, the office worker favours the city with custom most working days of the year and can be said to be worth 250 times more than the tourist.

"So if you've got 5000 office workers, you've got a huge economic benefit to the city.

"At the moment we focus heavily on Wellywood and tourism. That's all good, but the resources we spend keeping our office and services going in the city is small, in fact it's almost negligible."

The city's compact size and the ease with which people could get around on foot made it the most efficient city in Australasia for doing business.

It lost many corporate head offices in the 1990s and the city suffered badly for that, but it was now in danger of losing critical mass.

That was accentuated by the downsizing of the public service combined with the trend where more and more departmental head offices were relocating to the northern end of the city - Thorndon and the waterfront.

This was bleeding the life of Wellington's commercial heart - essentially the Golden Mile between Courtenay Pl and the bottom of Lambton Quay.

"The drift to Auckland just doesn't make sense. It's bad for us and bad for the country. But the drift to the north of the city - to the Railway Station and beyond - is just about as bad because they [workers in that part of the town] don't come into the city at lunchtime. They're hiding down there sharing some dismal cafeteria."

When government departments considered moving, they needed to factor in the benefits of staying in the central city.

"They talk about irrigating the South Island; let's talk about irrigating Wellington with the power of those civil servants."

It was not going to cost government more to put their workers into part of the city where their spending power could give the city a real boost.

For example, if the Social Development Ministry, which is looking to move its head office from Bowen St, were moved downtown - rather than to the proposed new Kate Sheppard Exchange near the Railway Station bus terminal - the city centre would get a significant boost from the spending power of more than 1000 public servants.

"Its simply a case of co- location. Wellington thrives by having more things happening in the same place . . . where you can simply walk around and you don't have to catch a train or find a car park."

The traditional city heart - cafes, chemist shops, dry cleaners and characters - thrived on the life generated by city workers and that vibrancy was threatened when offices were shifted out into sterile office precincts.

The Statistics and Customs head offices on the waterfront were examples of this: "They might as well be in Otaki, because the people who work there don't come into the city."

Mr Cassels guessed the same might be the case for staff in Inland Revenue's new head office, the Asteron building opposite Wellington Railway Station.

No doubt it was much more efficient for IRD to have its workers in one block than scattered all around the city, but he believed the city had not done well out of that decision.

Sadly, he said, consultants and bureaucrats who put buildings further out "because it's more efficient for some reason" did not think of the effect on the city of extracting those people.

"The city's only got eight pints of blood, we're not a growing city . . . and these guys need to think of what they're doing."

Cities needed to think about how they worked as an entity and act accordingly.

Wellington was indisputably an office town and it needed to focus on that. It suffered badly after the 1987 sharemarket and property crash - "we were poked for 10 years and there were very few new buildings built, the city lost its way then we relied on overseas investors to buy our buildings.

"It's not as dramatic now, but if we let the drift north to Auckland and the drift north in the city and if we don't adaptively reuse our empty office buildings, then we're going to have serious challenges ahead."

The development of the new Cordon Bleu cooking school in the old Regent complex in Manners St was an example of how to bring new life into the city. However, he believed another vital component to keeping Wellington healthy was getting long-haul international flights into and out of Wellington Airport, either by extending the runway or enticing airlines to operate flights here once the new Boeing 787s went into service.

It would help tourism, but more importantly it was vital to encouraging business people to set up their offices in the city.

"The important people in the world don't take two trips to go anywhere, and those are the people we need to set up to get offices set up here.

"Wellington's a $15 billion-to- $20b city and the airport is critical to our international performance in the world."

The Dominion Post