Friday, April 25, 2014

CBD rebuild stall - blamed on Private Developers!

There are two very fundamental reasons why the commercial rebuild of the Christchurch CBD has not occurred.

1 - the precincts idea and the amalgamation of smaller into larger titles, and the expectation that one Ring to Rule each Block could somehow thereby be plucked from the rubble. This is a deeply uncommercial proposition, because any development, large or small, needs 60-80% commitment from prospective tenants before funders will look at it. That has been the consistent stumbling-block for every single development. Even our sentimentalist (Sir Bob Jones' characterisation) who is building the Terrace complex has tripped over this chunk of reality. And the time taken to demolish, amalgamate, issue RFP's and consider the results, takes much Time. And time=money, a fact which CCDU and CERA are blissfully unaware of: their salaries arrive with the regularity of sunrise. So construction costs inflation rattles along at 10-15% pa: so a replacement build of say $30m in late 2011, is going to cost $42.5m today (assuming cost inflations of 10, 12, 15% over each of those three years respectively).

2 - Retail in particular has to sell stuff Today, to be able to pay staff next Week. So denying retailers access to their inventory, tools of trade, and back office systems in the early days of the CBD lockdown, was always a lose-lose action. Denied a living, there are only two choices: relocate and start afresh, or fold entirely and go work for someone else. Both have of course occurred: the business deaths from the lockdown are still being counted, and the New CBD - the Sydenham/Addington/Middleton/Riccarton/Hornby/Airport arc, plus the block bounded roughly by Victoria St/Cambridge Tce/Avon River/Bealey Ave - is roaring ahead and is extremely disinclined to decamp to some Precinct with uncertain foot traffic, years of construction disruption, and building values and hence rentals, 2-4 times their current outgoings. So, and inevitably, the Justice (Government) Precinct is the only one which seems to have tenants with deep enough pockets to stand the costs. And those pockets are, of course, full of your and my tax dollars, quel surprise.

This will all settle down in the decades to come, of course. But the notion that the Precincts will survive in the big-block dream sense, is surely fading away. It will be replaced by the Jane Jacobs (the Death and Life of great American Cities author) patchwork: many small plots, many smaller developments, each rhyming with its neighbours, and at human scale.

So, the Baron Haussmann notions are going to have to be deep-sixed, and sanity prevail.


But not before the current crop of ineptocrats have driven their steamroller right into the swamp.

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