Crunch time for central city blueprint

19:04, Nov 17 2012
One Cashel Square
PROPOSED DESIGN: Ocean Partners and Apollo Projects have proposed a design called One Cashel Square.

Pre-quake Christchurch's central city was dying. It's now got the chance for a rebirth and decisions vital to that are about to be made.

It won't be just any old playground.

"We want it to be the best in the South Island, hopefully the best in the whole of New Zealand," says Christchurch Central Development Unit (CCDU) director Warwick Isaacs.

It is details like this that remind you of the grand ambition of the Government's blueprint for the rebuild of central Christchurch.

In any other year, a plan to create a giant urban playground in the heart of the city would dominate the headlines for months. This year it is a barely noticed item on the agenda. Yet think of the impact it will have. And how soon it may arrive.

Isaacs says the tenders have already gone out for the design and project management on the playground as part of the $7 million Avon River precinct and Te Taparepare "green frame" park landscaping project.


Of course, the CCDU still has to go through a compulsory land acquisition process. The Frame marking the eastern edge of the new central business district (CBD) requires the flattening of six whole blocks of buildings between the river and Lichfield St. The playground will go about where Centennial Pool was.

However, Isaacs says there could be kids playing on the swings and slides - or something rather more adventurous if the architects fulfil their brief to stretch their imaginations - by next spring. Another bit of the inspirational new Christchurch is going to click into place faster than many realise.

When the quakes destroyed 80 per cent of the old CBD, central Christchurch faced two choices. Shrivel up and die, leaving development to the suburban office parks and malls, or be bold, design an inner city so remarkable it would have to succeed.

The CCDU was formed as the development corporation to produce a plan and make it happen. And, right now, in the last few frantic weeks of the run-up to Christmas, is turning out to be the crunch time for the blueprint and its ambitions.

Out of sight in the offices of local property developers, property agents, banks, architects and lawyers, there is a scramble going on that will ultimately determine which way it all goes.

The CBD playgrounds and parks are in truth just the blueprint's eye-catching extras - the window-dressing. And even its big civic anchor projects, such as the new conference centre, metro sports centre, rugby stadium, justice and emergency-services precinct, rebuilt central library and inner-city apartments, are somewhat peripheral to the action.

These anchor projects may have their uncertainties about exactly what shape and size they will be, but they will happen in some form because the Government and Christchurch City Council are already committed to spending the money.

What has become apparent is that the true core of the blueprint is the four blocks of the retail precinct - the rectangle of land zoned for high-end shops and offices bounded by Hereford and Lichfield streets to the north and south, and the river and High St to the west and east.

This is turning out to be the ground zero, the economic engine of the rebuild. Get the retail precinct right and its success will ripple out across the rest of the four avenues. Everything else will slot into place and make sense.

Yet, boy, is there a battle going on as to who will develop it and how. And some are claiming the CCDU is losing its nerve at the last minute. They say its job is to pick the winners and losers - decide which developers' bids are best for the city - but mysteriously it has backed off, saying some things "need to be left to the market".

Property owners have been left upset and confused, while property agents say potential investors and tenants are aghast at the situation and about to walk away, ready to scrub the whole idea of coming back into the central city.

Some of this talk could be just the fog of war. Some is patently negotiating tactics. For its part, the CCDU says it knows what it is doing.

However, even simply as a tale about a critical moment in a city's history, it is a riveting story. And the outcome will determine the shape and character of central Christchurch for the next 50 years at least.

Bidding for a block

In the offices of commercial property specialist Colliers International, managing director Hamish Doig fans the glossy architect's impressions across the table.

This bid is being put together by Australian heavyweights, Westpac Bank, which wants to re-establish its headquarters in the centre of the city, and the Goodman Group, one of the world's largest investors in commercial projects.

The duo hope to take over the entire block of Cashel Mall behind Ballantynes department store to create a single integrated A-grade development.

Doig starts pointing out some features of the proposal. Look, he says, the Bridge of Remembrance end of Cashel St could be opened out to make a plaza, a new meeting place for the city.

The buildings would be stepped in height to avoid shading the street and pulled back so their frontages curve to match a new Avon River walk.

Remember where there used to be that glassy eight-storey cube, the DTZ building, dominating the corner of Cashel St and Oxford Terrace - a blank eyeless presence which made you only want to scurry past, never linger?

The Westpac/Goodman plan for that prime spot is instead a low- rise office block with cafes or shops below and a public roof garden above. Hop up for a sweeping vista across the river and the passing crowds in the streets.

"It could be a performing arts area where people have fashion parades or other things as they look down over the view," Doig says.

It is the kind of development that makes the best of a city. If it were a home, the real estate agents would be gushing about its calm sophistication and indoor/outdoor flow.

But Westpac/Goodman's is only one of the three rival bids covering the same city block.

There is also a plan from the One Cashel Square, a group made up by some Cashel St property owners, such as Miles Middleton and Nam Yee, and their advisers, Ocean Partners and Apollo Projects. The DTZ site actually belongs to Middleton, for example.

Then a third proposal has been put forward by Christchurch construction firm Leighs and architects, the Buchan Group, the team behind the Re:Start pop-up container mall.

The Leighs bid seems sketchy and perhaps the most likely to evaporate. But this leaves the CCDU having to adjudicate between at least two plans - the Aussie outsiders with the financial muscle to make the rebuild happen fast and the local guys, the sitting tenants, ready to kick up a stink if it seems they will be unfairly turfed off their land.

"You're right, there has been almost overwhelming interest there," agrees Isaacs with a relaxed grin that belies the heat in some of the phone calls he and his staff have been fielding the past fortnight.

Of course, says Isaacs, it would have been far worse if nobody at all had been interested in redeveloping the retail zone. So if the decision process - the choice of who gets to do what - seems a little ragged, it is because the CCDU could not be exactly sure how it was all going to pan out.

After the blueprint was announced in late July, the CCDU set the retail precinct up as a competition of ideas and money.

Isaacs says the old CBD was cut up into hundreds of individually owned lots, with nearly every building having a different owner. To ensure the rebuild was coherent, it was decided that under the new district plan, any redevelopment proposals had to take the form of an Outline Development Plan (ODP) covering an area of at least 7500 square metres, or about half a city block.

This meant landowners had to come up with a joint scheme which included all their neighbours. They had to show how they would produce a cohesive design when it came to parking, frontages, laneways and even trading hours, even if they wanted to rebuild only their building.

But it was also left open for a large outside developer to swoop in and drop an ODP over land to which they did not even have title.

Presumably, if the CCDU liked it enough and gave the scheme the green light, the developers would negotiate to buy the land they needed.

Or if the landowners got sticky, the CCDU would be able to call on the Government's earthquake powers to force some compulsory purchases.

Last month was the deadline for ODPs and as it turns out, most of them were single claims led by wealthy locals for areas of property they mostly own.

For example, the well-known names of Philip Carter, Peter Guthrey and the Ballantyne family have formed the BCG Alliance to jointly develop the 2.6 hectares stretching from the Lichfield St car park through to Ballantynes, the Crossing and right to High St. This alone covers over 40 per cent of the retail precinct area.

Another prominent family, the Goughs, have an ODP to develop their Oxford Tce bar area, while Nick Hunt of Lichfield Holdings is representing some landlords who occupy the next stretch from Shades Arcade to Colombo St.

Each of these plans is going to have its battles. Even with single proposers, there will still have to be negotiations over any pockets of uncontrolled land. Other property owners will either be bought out or persuaded to become part of the wider project.

But it is south Cashel St where feelings are running hottest and a David-and-Goliath tussle is brewing.

The retail precinct

At least all sides appreciate why the retail precinct matters.

Quite simply, Christchurch has only a small pool of tenants willing to pay top dollar for A-grade buildings. Colliers' Doig reckons he can count them on his fingers.

To make the blueprint work, he says pretty much all of them have to be scooped up and dropped in the one spot.

Tim Howe, of Ocean Partners, the Christchurch merchant bank fronting the One Cashel Square proposal, agrees. Howe says the old Christchurch CBD was too spread out to be economically effective.

The city had developed a bitty feel because people found they could build office blocks out on the margins, down Kilmore or Madras St, where the land was cheap and there was easy parking.

The buildings also tended to be single purpose, Howe says. They were either a shop, or an office, or an apartment block. So, walking around town, this again made for a disjointed experience.

Doig says the truth was the CBD was half empty and had been in a downward spiral for decades. "There was a mismatch of landlords grabbing what tenants they could get and so rents have been falling for the last 30 years."

Graphic evidence is that even an A-grade office block like the PricewaterhouseCoopers (PWC) Building, which was renting out at $220 a square metre when it was opened 22 years ago, was only valued at $265 a square metre just before the earthquakes.

That's a pitiful increase given inflation, Doig says. And compare this with how well a suburban shopping centre like Riccarton's Westfield has been doing.

"Rents for shops there would be three times higher than Cashel Mall - three times at least."

Doig says the central city had a chicken-and-egg problem. It needed to offer a high-quality environment to bring in the high-paying tenants, but then the high- paying tenants had to be there for a high quality environment to get built. This was the conundrum the CCDU had to crack.

The blueprint does a brilliant job of that, Doig says. "Everyone thinks it's sensational and wants to support it."

He says the green frame will mark a clear boundary to the CBD, its playgrounds, parks and broad river parades both making the inner city more attractive and constraining the supply of land in a way that will maintain post- quake property values.

The civic anchor projects will also guarantee a big step-up in quality. But Doig says the retail precinct is the real juggling act.

The aim is produce a concentration of shops and offices with a density of population Christchurch has never seen before, a proper downtown community of perhaps 10,000 people squeezed into the four central blocks.

To pay for quality, Doig says, buildings need a double life. The retail precinct developments will have to be like those found in Sydney or Singapore, where at the level, the buildings are taken up by high-end shops, bars, restaurants and arcades, then the floors above are used as office space for banks, legal practices, government departments, and other high- paying tenants.

This way, the shops have a critical mass of well-heeled customers right on their doorstep. "The challenge for the central city is to have very strong retail on the ground floor with a hell of a lot of people upstairs feeding into that retail so there's a strong lunchtime trade."

That way the shops can stay open into the late evenings and weekends to serve people coming from outside the CBD.

Doig says it all interlocks. The more people using the city, the more attractions it can afford to offer. "You'll see the very high-end retailers, your Guccis, Louis Vuittons, Ted Bakers and Cartiers, that you can't get at the malls. A whole range of specialist shops.

"The trouble in Christchurch is our mall offerings are too strong, so if there's not a point of difference to the malls, it's not going to work."

If this kind of concentrated hub can be established, then the rest of the inner city will fall naturally into place around it, Doig says.

People will want to buy apartments as close to the core as they can get. A second tier of commercial development will spring up outside the frame.

Already there are initiatives such as the Peterborough Village project. Landscape architect Di Lucas says that, with busy through roads such as Kilmore St being tamed as part of the central city's new transport plan announced on Thursday, it is easy to see areas surround the core flourishing as low-rise, mixed-used, office and apartment communities.

"We're running a design competition for about four sites that add up to 4000 square metres joining on to the North Frame to get ideas of what it could look like," says Lucas.

But Doig says the problem for the retail precinct is that time is now critical. Definite decisions have to be made much quicker than anyone seems to realise.

Doig says all the A-grade corporate tenants are now camped out in the suburbs, on short-term leases, making do with whatever space they can find out among the warehouses of Middleton, or office parks of Burnside.

However, after Christmas, most of these leases will come up for renewal and the businesses will have to consider their next step.

"The landlords out there aren't going to let them roll over for another few years just to meet the time frames of the central city. They'll say, 'if you want to stay, you've got to sign up for another 10 years'."

If the retail precinct is still up in the air, what is actually most likely to happen is these tenants will be forced to take on buildings just outside the core.

Already, says Doig, the 270,000sqm of proposed office developments in places such as Durham, Victoria and Gloucester streets are enough to soak up the entire demand.

So, he says, the corporate clients have a plan B, but one which would put central Christchurch right back where it was before the earthquakes.

"If the retail precinct is delayed, they will go to their other options and then we won't have them sitting above the retail. The retail will flounder, and we'll have our old problem back all over again. It's as simple as that."

Behind the scenes

In this high-stakes business game, that the likes of Doig and Howe are even talking openly shows that, behind the scenes, it has become fraught.

No-one wants to be seen criticising the CCDU, but there are concerns that the process needs to be pushed along.

Michael Wolfe, a commercial property specialist at lawyer Lane Neave, says it is obvious why the situation is creating tension.

The Westpac/Goodman proposal probably looks as good as the CCDU could have wished for. It is a master-planned project ready to be built in one go. There would be no waiting on tenants wishes or other uncertainties.

But while the CCDU can call on compulsory acquisition powers as a stick to help make this and the other ODPs happen, Wolfe says it is not entirely clear they are framed broadly enough to avoid a judicial challenge from unhappy property owners reluctant to sell.

In theory, it seems possible. In practice, it might be rather more difficult. Which is probably why the CCDU has gone a bit squishy on exactly what happens next.

Wolfe says the CCDU will be hoping the parties can sort things out, negotiate a fair price for the transfer of land, without it having to intervene.

"There has to be a balancing of interests, the personal and private property rights of the landowner versus somebody's concept of what's in the public good." And a straight-forward outcome is looking "aspirational" at the moment, Wolfe remarks wryly.

One Cashel Mall's Middleton says there is a feeling that smaller property owners are about to get taken out. Investors such as himself and Nam Yee are going to be squeezed into sales when they are very keen to be part of the central city rebuild.

Middleton says the character of central Christchurch will change drastically with all the best land falling under the control of just a handful of investment companies.

"That might look the best thing for the city, but it's still the worst thing for us."

Back at the CCDU's headquarters overlooking Worcester Blvd, Isaacs acknowledges he is taking a "light handed" approach despite calls to step in and be more directive.

But, he says, because the retail precinct will be built by private money, the CCDU felt it is better that those with the commercial nous sort out the details.

"To be honest, at one stage we did have in our mind that we might masterplan the whole retail precinct. But then we did not want to go in and say this is the Government's view on what retail in central Christchurch should be," Isaacs admits.

For now, CCDU will be just facilitating meetings and providing feedback.

Yet Isaacs says the CCDU is acutely aware of the time pressures, the need to capture the A-grade tenants before they sign new leases, so the backroom jockeying for ownership will be allowed to run on for weeks only rather than months.

He says the retail precinct is indeed key to the success of everything else in the blueprint. And, like the playground, the frame and the anchor projects, people should be confident that the best is now about to happen.

The Press