Seismic shift

Seismic shift

Total Property - Issue 5 2019

The Government’s Heritage Earthquake Upgrade Incentive Programme, known as EQUIP, has been tweaked to better assist owners of heritage commercial properties in medium and high seismic risk regional areas.

The scheme targets identified properties on the Heritage New Zealand list that are deemed earthquake-prone.

Owners of these properties in regional New Zealand now have more options to manage earthquake strengthening challenges. The introduction of new professional advice grants are being welcomed by the industry and property owners.

The strengthening of earthquake-prone buildings comes with targeted timelines and thresholds and, if not addressed, can have implications for bank lending and rental potential.

Associate Minister for Arts, Culture and Heritage Grant Robertson recently announced the EQUIP changes saying heritage buildings are integral to the character of regional New Zealand, yet strengthening costs can be prohibitive.

The grants provide up to half of the costs for services such as seismic assessments, conservation reports, architectural and structural engineering plans.

Many regional building owners can also apply for up to 67 percent of upgrade works costs and multiple building applications can seek funding of up to 67 per cent of professional advice costs.

Robertson acknowledges that owners of commercially-utilised heritage property in the regions face lower rental incomes and capital values. This often doesn’t justify upgrade expenses, and there can also be a local shortage of professional advice.

Regional centres with high concentrations of heritage buildings, such as Napier, Oamaru, Dunedin and Invercargill, are set to benefit from EQUIP funding and building owners are urged to investigate whether they qualify.

Property Council chief executive Leonie Freeman says extra incentives to quake-strengthen regional heritage buildings are a positive step towards protecting our regions’ history.

“There are community benefits which result from strengthening heritage buildings, such as sustaining local economies and maintaining vibrant communities where people want to live, work and play.”

The Property Council has long-supported retaining heritage buildings where practicable, but calls for pragmatism and balance.

Temple to electricity

The Milton Street Substation in Sydenham, Christchurch, was built in 1928 by the Municipal Electricity Department (MED).

It is the largest remaining example of the classically-influenced substations built in Christchurch during the art deco period, and is listed as a significant heritage site in the district plan.

It suffered exterior damage during the quakes of 2010 and 2011. First-time developer Clark Mauger wasn’t fazed and bought the earthquake-prone substation in 2017.

“These substations were designed to beautify the city, becoming known as 'temples to electricity’,” says Mauger, who wants to make it a well-known landmark enjoyed by all.

He says he applied for a Heritage EQUIP grant because it didn't place any covenant on a property’s title as he understands the local councils would do.

“The EQUIP process was very easy and I couldn’t have done the work without it. I believe we are all winners as a result, given that an important piece of the city’s history is being preserved.”

The property is now at 67 percent New Building Standard (NBS) following the installation of structural steel brace framing, strengthening of the street-facing parapet, and tying the brick masonry infill walls.

While he had originally been looking for a commercial tenant, publicity has led to interest for industrial-styled weddings, music gigs and other events.

Former insurance building revitalised

Affectionately known as the Lambrettas building thanks to the popular cafe on its ground floor, 204 Hardy Street, Nelson, is a commercial property constructed in 1956 for New Zealand Insurance.

Heritage New Zealand says the building has architectural heritage value, in that it demonstrates the development of celebrated architectural firm Gummer and Ford, incorporating references to their early work into a modern building.

Building owner, and long-time Nelson businessman, Ben Van Dyke successfully gained an EQUIP grant. However, he believes the market value of the now-strengthened building would not reflect the dollars he’s invested to preserve it.

“The grant we received only covered around 20 percent of our costs and, if the government is serious, I would say 50 percent should be the target.”

Van Dyke says the EQUIP procedure was lengthy but the team was helpful and encouraging.

Although yet to receive a formal NBS rating, Van Dyke says it’s generally accepted the building is now over the 70 percent threshold, but ventures to say that parts are at about 400 percent.

Find out if your building qualifies for Heritage EQUIP funding at:

Read more market insights from Total Property

Subscribe to receive the latest commercial news and insights from Bayleys Total Property