Rankled ratepayers over building blowout

If I was an Auckland ratepayer this would rankle – the move to an office tower, claimed to save ratepayers millions over ten years, is going to cost the ratepayers more millions to repair.

NZ Herald: $31m to clad Auckland Council’s HQ

Ratepayers have already paid $128.5m to buy and fit out the 25-year-old building, described as robust and structurally sound with good bones when it was bought in 2012.

About $4m was set aside for stonework issues picked up during due diligence.

But…

The cost of cladding repairs at Auckland Council’s Albert St headquarters has blown out from $4 million to an estimated $31m, according to a confidential report.

Two sources yesterday confirmed the estimated $31m repair bill. Council staff would not confirm the figure.

The $27m increase in cost is the same figure senior council officers said would save ratepayers over 10 years moving from a mix of rented and owned CBD accommodation to the ASB Tower.

An estimate of $4m blowing out to an estimate of $31 million is horrendous.

The ‘due diligence’ does not appear to have been very diligent.

Home Owners & Buyers Association president John Gray said the $31m cost was in line with his experience of recladding large buildings.

He said the cost could rise once the cladding came off.

Building work could take more than two years, he said, and staff may have to vacate the tower. About 2080 council staff work in the building.

If Gray thinks the new estimate is in line with his experience how experienced were those suggesting a cost of $4m?

I expect their will be some rankled ratepayers in Auckland. And it could get worse.

That a 25 year old building should require major recladding work should also raise a few eyebrows in building and property circles.

5 Comments

  1. 2015 – 25 years = 1990. Oh what a bloody surprise….. The CBD buildings put up in the period 1985 ish through to 1990/91 were not of the greatest quality in some instances.

    It was a time of go-go deregulation, fast money and turn a buck quick if you remember ….

    Anyone remember Chase Corporation?

    Some of the buildings erected in that time period have disturbing features like sagging stairwells, bouncy floors – I worked in one were the large safe used by Audit and Treasury functions had to be moved regularly around various pillars as the floor started to buckle.

    The fact the council bought this building without a decent claw back clause around the cladding tells you all you need to know ….. methinks a closer look at the the contracting process might be interesting

    • Gezza

       /  April 10, 2016

      Judas Priest! That’s a blowout that proportionately makes the rapidly escalating cost of Trump’s wall look modest. Definitely up for a dig into the contracting process there.

  2. Art croft

     /  April 10, 2016

    The Auckland Council is a lost cause. 1.2 billion for an IT upgrade, 31 million for recladding, tomorrow it’ll be x million for something else. No one on council cares after all just put rates up another 10%; problem solved.

  3. artcroft

     /  April 10, 2016

    Be interesting to hear what Len had to say about all this. Apparently he is still the mayor, though that is not clear from the article, or his recent performance.

  4. Farmerpete

     /  April 10, 2016

    It was widely accepted by property managers and property lenders that there were problems with this building. Contrary to Len Browns assertion that this was a good quality investment, Auckland Council paid top rate for a largely empty building. They are totally asleep at the wheel!