Christchurch rebuild: A city stalled

JOHN MCCRONE
Last updated 07:00 08/03/2014

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The Rebuild

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The Government's Blueprint plan to rebuild central Christchurch looks to be stalling. So how did we get to where we are and what might have been the critical mistakes? JOHN McCRONE investigates.

When feelings run high, judgments tend to be black and white. So no surprise that views on Christchurch's central city Blueprint recovery plan range from "an utter balls up" to "nicely on track".

Warwick Isaacs, director of the Christchurch Central Development Unit (CCDU), the government agency charged with delivering the Blueprint, spreads his latest map across the table.

Look, he says. About a year and a half since the Blueprint was first announced in July, 2012, and there are now 118 building projects progressed at least as far as the architects' sketches and consent applications. So plenty of action happening.

Slippages in the schedule? Among the 17 anchor projects, only the Metro Sports Facility has lost about nine months, replies Isaacs.

It is the same story from landscape architect Don Miskell who led the original 100-day Blueprint design team as a hired consultant and is now the CCDU's design and planning manager.

We are standing on the freshly grassed East Frame, the seven downtown blocks between Manchester and Madras St that the Government took to give the rebuilt central city a sharply defined margin.

It was talked of as a green space landbank, a clever move to prop up post-quake property values by creating an artificial land shortage in the city core. But quicker than expected, the Government is turning around to sell it off in nine "super lots" designated for inner city housing.

Perhaps 750 apartments in complexes of four to six storeys, says Miskell. About $300 million in investment with a 50 metre wide ribbon of parkland and cycleway running down the centre, connecting the Avon River to the planned Innovation Precinct.

Imagine, he beams. Another whole loop out of Hagley Park and around the reborn city for the joggers and dog walkers. Another big step to achieving the goal of 20,000 people living within the four avenues - the 6 per cent of the city population that international research shows is the critical mass.

Isn't this the kind of bold future for Christchurch we talked about when the Blueprint was launched?

So give it time, says Miskell. The success of the Blueprint cannot be judged right now and probably not even in five years. It will only be looking back in 20 or 30 years that we will know for sure.

MOOD AFFECTS DECISION MAKING

The Blueprint or Christchurch Central Recovery Plan (CCRP) certainly was a bold choice.

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Following the February, 2011, earthquake, the Government passed the Canterbury Earthquake Recovery Act (CER Act) which required Christchurch City Council (CCC) to produce a recovery plan for the devastated central business district (CBD).

After hasty public consultation, the council delivered a two volume draft in nine months. The first volume was an aspirational vision of a "city in a garden", the second a bumper manual of planning rules designed to enforce a look and feel on the streetscapes.

Seven months later Earthquake Recovery Minister Gerry Brownlee decided Christchurch deserved something more ambitious, more interventionist.

Miskell and a team of local and international experts were recruited to produce a rewrite in 100 days. The CBD is a blank canvas they were told. Knock up a plan that gives us a proper 21st-century city.

Looking back reminds of how a disaster is inevitably a rollercoaster of emotions. The council was tasked to produce its master plan while the city was still burying its dead, still experiencing the further destruction of major aftershocks in June and December 2011. Confusion ruled. Hope was tentative.

The Blueprint by contrast caught the wave of optimism when it was realised the city was well insured, the local economy had not collapsed as first feared, remarkably few people had taken flight.

The Canterbury earthquakes were a huge natural disaster. The damage equated to 20 per cent of national GDP (annual gross domestic product). In comparison, Japan's 2011 tsunami was 4 per cent and the United States' 2005 Hurricane Katrina just 1 per cent.

So the Government really did need to worry that Christchurch, the second biggest city, might simply implode from the shock. Yet it didn't.

And then among those in charge of the recovery, it should not be underestimated what a psychological impact the construction of a temporary rugby stadium at Addington had.

Completed in a heroic 100 days in time for the opening game of the 2012 Super Rugby season, a patriotic alliance between the Government and the New Zealand construction industry - after that, there seemed every possibility of the authorities dreaming big and building back better.

Thus, if it is about lessons and conclusions, lesson No 1 of the Christchurch recovery is that plenty of feelings were always in play. Mood affected decision making.

And yet when it comes to the Blueprint, it is significant that it did not emerge looking like a complete "back of an envelope" exercise.

Which leads to lesson two. In a crisis like the Canterbury earthquakes, a vacuum is created which sucks in pre-existing "good ideas".

It turned out almost every element of the Blueprint was a proposal that had been kicking around in someone's mind for a long time.

The Government had a national convention centre strategy. Rugby authorities had been agitating for a covered stadium. There was a view within the arts community that the Town Hall auditorium was too large, its James Hay theatre too cramped, the symphony orchestra and Christchurch School of Music could do with premises in a precinct in the heart of city.

So it continued. The QEII swimming pool was too far out as a competitive facility. The central library ought to be bigger as the single most visited public space. The Avon River had long been over-shadowed by office building. The inner city needed cycleways, lane ways, "active" street frontages, concealed car parking.

Miskell confesses the anchor project list just about wrote itself. The team's job was to fit all the pieces on the board. The only real innovation was the adoption of a green frame to give the city core a shape and protect its property values - an idea coming from some bright spark seconded from Treasury.

Lesson two also happens to be lesson three. With a recovery, pre-existing projects pop out of the woodwork. But so can pre-existing political problems.

Historical tensions between CCC and the central city business community, and between local and national government, both quickly bubbled to the surface to affect the Blueprint.

Before the earthquakes, a long-running struggle over the future of the city had been going on with business leaders feeling the council had become an inward-looking bureaucracy, stuck in an eternal planning loop and favouring certain developers.

The bailing out of bankrupt developer Dave Henderson - the council's purchase of five of his properties with no independent valuation for $17m in 2008 - led to open warfare with then Mayor Bob Parker and chief executive Tony Marryatt.

However, relationships had long been fraught. Harcourts' Stephen Collins, a property investor and past president of the Canterbury Employers' Chamber of Commerce, spent eight years on the Central City Mayoral Forum.

"But the only thing we managed to do was get some new tiles, some seats and another tree put into Cashel Mall," he grumbles.

There was a distrust on both sides and so a rather arm's length approach to any dealings.

Then there was the story of the Government and CCC. The context there was the council was plainly overwhelmed by the sheer scale of the disaster.

As one former councillor admits privately, New Zealand local government is a creature of statute. It doesn't get to make laws but instead has to follow laws that have deliberately been framed to restrict executive power.

"For local government to wake up in the morning and put the jug on, just about requires you to go out and consult. So you can add six weeks to anything because the 2002 Act puts that obligation on us."

In retrospect, says the councillor, the Government should probably have come in and taken over, frozen the council's capital spending budget and formed some collective body to work through the strategy for the recovery.

But this was too politically sensitive a step. The Government had only just removed the democratically elected regional council, Environment Canterbury, because it was not moving fast enough on water and irrigation plans.

So instead, the Government tried to wrap a government department around the council. It formed the Canterbury Earthquake Recovery Authority (Cera) and then its offspring, the CCDU. Another arm's length relationship was created that became a prime problem for the Blueprint.

BIG AMBITIONS AND FRACTURED RELATIONSHIPS

So the scene was set. Big ambitions coupled to fractured relationships. A plan which could be cobbled together at speed because there was already a pre-quake wishlist of projects, but also an underlying political fragmentation that was never properly addressed.

The result could be predicted. And it is what those closest to the process are saying is largely the case. The Blueprint itself is great, but the implementation is where it is breaking down.

Christchurch investment banker Tim Howe, co-founder of Ocean Partners, says in baldest terms, the task of the Blueprint was simple - to connect capital to a plan. And to date, the results have been dismal.

Howe, who represents potential US and European investments of around $100m, has had project after project tip over. "The frustrating thing is we haven't been able to spend $1 in development so far."

And big names have been leaving. The Triangle Centre's Michael Ogilvie-Lee, who had plans for a $100m shop and office complex in the Blueprint's retail precinct, abruptly sold up and pulled out, saying the going had become too hard.

Others, like Harcourts' Collins, are vocal in their unhappiness. "If I could go back a year or 18 months, knowing what was going to happen, I would've probably just taken my money and invested somewhere else," he says.

Howe says despite Isaacs' bland assurances of developments charging ahead, private sector investment has stalled largely because of uncertainty over the actual detail of the public sector anchor projects.

For the first half of 2013, the Government and CCC were locked in a protracted closed door wrangle over cost-sharing - the question of who was going to pay for facilities like the arts precinct or rugby stadium.

The council's argument was it didn't ask for the ambitious Blueprint so why should it spend a dollar more than had been set aside for its own original CBD master plan - the one the Government so humiliatingly rejected? Not sorting out the politics at the start became a serious source of friction.

But there were other uncertainty-inducing delays too. In particular the transport chapter of the Blueprint, An Accessible City, was slow arriving. It took until October 2013 - some further 15 months - for the CCDU to confirm even the general outline of street layouts and parking rules.

Collins says the entire Blueprint approach seemed cumbersome - guaranteed to bog down. The convention centre was put out to market as a single giant precinct project. The Government wanted to attract a bidder who would build the surrounding hotels and shops as well.

As a result says Collins, the rest of 2014 will be taken up just in parties replying to a 400-page request for information (RFI). "I've heard that for the two consortia still interested, it's going to cost them over $1m each just to come up with their proposals."

Collins says if the Government had hired an architect and got on with it, the convention centre could have been open by the end of 2014. "If you have a centre that can seat 2000 people, the hotels will come, the shops will come. They're not stupid."

Another cumbersome bit of process was the CCDU's decision to attempt to force the agglomeration of commercial development in the four-block Retail Precinct around Ballantynes department store.

By requiring the submission of outline development plans (ODPs) covering at least 7500 sq m - about a whole block - the hope was that large investors would step in with comprehensive designs.

This worked with a property owner like The Terrace's Antony Gough, who through family holdings did have control over a whole block. But it became a mess of battles on other sites where a collection of individuals wanted to determine their own destinies.

So there is a picture of a general lack of clarity, says Collins. "Everyone wasn't aboard the same bus." The consequence of too much arm's length dealing.

SHOULD THE GOVERNMENT HAVE FROZEN DEVELOPMENT OUTISDE CBD?

There is always a damned if you do, damned if you don't, aspect to complex reality.

It has been pointed out that one of the ironies of the Blueprint is the Government tried to do commercial property owners a favour by propping up their land values through the Green Frame. Yet then the complaint became development was being paralysed by the central city's high property prices.

Likewise, the business community appears to wish the Government had used its CER Act powers for still more dramatic market interventions.

Collins reveals that early on, Cera was urged to impose a moratorium on commercial building consents outside the CBD to prevent areas like Victoria Street taking off in the way they did.

To give the Blueprint time to get into gear, it seemed obvious the Government ought to have locked down the rest of the city, despite the kicking and screaming this would have provoked.

The same with the faltering Retail Precinct. Howe says the CCDU had powers of compulsory purchase. It could have banged heads to break the ownership deadlocks. Instead - worried by already having the CER Act challenged in court - the Government hung back in the hope "the market would decide".

Those in charge were often on a loser no matter which choice they made. Yet it comes back to the fact that if a disaster recovery is going to strike out with bold ambition, this has to be matched by astute process. And here attention turns to the people and culture of the CCDU.

One of the stories of 2013 was a letter sent to Gerry Brownlee's office by three of the city's key influencers - Bruce Irvine, chair of council-owned Christchurch City Holdings Limited, Tony Sewell, chief executive of Ngai Tahu Property, and business investor, Humphry Rolleston.

The trio called for Isaacs and his CCDU team to be replaced by property professionals with international experience. Their argument was that a former Timaru town clerk like Isaacs, or a landscape architect like Miskell, could not have the suitable skills for the job.

The Blueprint demanded world-class procurement specialists - civil servants with an investment banking background and used to handling public-private partnerships. The ability to structure a deal and then step back to let the winning bid deliver.

It was implied the CCDU was instead staffed by risk-adverse bureaucrats whose instinct was to micro-manage the detail. Whenever in doubt, stop and study the plans some more.

Howe and Collins agree it fits with what they see. Howe says the CCDU was meant to be a facilitating agency but has ended up looking like a doing agency. "They stayed in command and control mode. They never made the transition to collaboration."

Collins says the CCDU has become swollen with bodies in the attempt to get the Blueprint moving. Yet the people that get hired are not those with market experience - who understand how capital works.

The ease with which the Blueprint came together might have led to an underestimation of how difficult it would be to make happen.

And there were always alternatives to running the rebuild through a government department like the CCDU.

Collins says the Government could have done nothing and left it to the market - simply let CCC do the anchor projects it felt it could afford and private capital put its own buildings back up.

The speed at which office developments are shooting up outside the Blueprint - in Victoria St and Addington - demonstrate that central Christchurch could have been half rebuilt by 2014.

Others remark on the success of the Stronger Christchurch Infrastructure Rebuild Team (Scirt), the alliance formed between the authorities and the construction industry to fix the city's broken roads and pipes.

There, all the parties have been around the same table making decisions. There, an experienced Australian in Fulton Hogan's Duncan Gibb was flown over to be the general manager.

History played its part again. The New Zealand Transport Authority had pre-quake experience of industry alliances. The construction firms had also just proved themselves over the temporary rugby stadium. So a basis of trust existed and different choices were made.

ONE INVESTMENT CYCLE ALREADY MISSED?

In summary, the plan was good but the key players were left dealing with each other at arm's length. The result is much of the steam has leaked out of the central city rebuild.

The talk has become of bananas and doughnuts. With the Blueprint at a standstill, the city's lawyers, accountants and other prime tenants have been signing long leases on new buildings outside its Green Frame perimeter.

Canterbury Employers' Chamber of Commerce chief executive Peter Townsend says the CBD is looking like it will end up a banana curve with three hubs in Victoria St, the city and Addington.

Others more pessimistically predict a doughnut ring, with very little ending up back in the central city at all.

Townsend says there are calls to scrap the Blueprint, give up on its high ambitions, and let property owners go back to rebuilding on an individual commercial basis. But he believes instead the only choice is to go bigger.

The strategy for Christchurch has to be to focus on growing its population and economy to the point where it can afford its convention centres and stadiums, where there is the commercial energy to refill the central city with shops, offices and people.

Howe agrees, saying in the long run the Blueprint will happen as imagined because much of it is natural - what Christchurch would have been doing over the next few decades in any case. The earthquakes were just an opportunity to accelerate change.

But Howe says the stumbling implementation means that at least one investment cycle has been missed now. Too many potential tenants have signed five to 10-year leases outside the Blueprint and so cannot even think of a return until the 2020s.

So as Miskell suggests, look back in 20 or 30 years time and the Blueprint will be remembered as a brave plan. The thousand gaps will have been filled. A central city with excellent bones will have been fleshed out. But until then, there could be quite a few thin years.

- The Press

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