IRD forking out $31.6m for furnishings

KENT BLECHYNDEN/The Dominion Post

BIG BUDGET: IRD is believed to be paying about $12 million a year rent for eight floors of the new building, which will house 1600 staff.

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Inland Revenue is spending $31.6 million to furnish its new head office in Wellington.

Although it is refusing to say how much it is paying in rent, claiming it is confidential, it is understood to be paying about $12m a year for eight floors of the city's biggest new office block, across the road from Wellington railway station.

IRD has 2000 staff in nine Wellington office blocks, and 1600 of them will be moving out of eight of those buildings into the $100m five-star green-rated building at the end of this year.

It is understood the IRD is paying more than $500 per square metre for the 25,000sqm of office space it will be taking.

This is on top of the $1266 per square metre cost of fitting out the building with desks, chairs, partitions and carpets.

Interior fitout consultant Nigel Shaw said that was more expensive than most fitouts.

"It's in the upper end but not extravagant", and may be justified if they were going to be there for a long time, he said.

However, a Wellington commercial property agent said a rent of $500 per square metre "was outrageous for the civil service".

"The Government talks about reducing costs for taxpayers but they are paying the biggest rents in Wellington."

IRD spokeswoman Catherine Delore said the expense of its new accommodation was "projected to be cost neutral over a 15-year period".

The higher rent would be offset by efficiencies.

At present, IRD leases 41,485sqm of office space in Wellington at a cost of $10.9m. After the move it would be using 10,000sqm less office space, she said.

"The result is an overall operating cost about the same as the current portfolio, but we will be paying for quality rather than quantity."

IRD had deferred spending on furniture and fittings in the past three years in anticipation of the move, she said.

The department also expected to make savings on heating, cleaning, security and staff travel between buildings, and estimated it would save 13 million kWh of energy, 61 million litres of water and 5800 tonnes of carbon over 15 years.

Ms Delore refused to release cost-benefit studies used to justify the move, saying they were confidential.

Mark Dunajtschik, the developer of the new building, said he too was bound by a confidentiality clause in the lease agreement but would not object if IRD disclosed what it was paying in rent.