Q+A interview on the Christchurch City Rebuild
Sunday 14th August, 2011
Q+A interview with Bob Parker, Brendon Burns & Ernest Duval on the Christchurch City Rebuild.
The interview has been transcribed below. The full length video interviews and panel discussions from this morning’s Q+A can be watched on tvnz.co.nz at, http://tvnz.co.nz/q-and-a-news
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BOB PARKER, BRENDON BURNS & ERNEST DUVAL interviewed by PAUL HOLMES
The Garden City wants to be a city in a garden. But while everyone’s excited about the rebuilding of Christchurch, the hurdles and different opinions remain, and this morning we bring you three points of view - Labour’s Christchurch Central MP, Brendon Burns, is with us. Good morning. In the south, we have in Christchurch Mayor Bob Parker who is driving the council’s plan, and Ernest Duval, red-zone building owner and founder of CORE or City Owners Rebuild Entity. So, good morning all of you.
ERNEST DUVAL - Property
BOB PARKER - Christchurch Mayor
PAUL Well, I suppose, Bob Parker, we’ll start with you as the mayor. It’s only been a few months, and suddenly we have a start. No city of this country has ever had a rebuild of this size, of course.
BOB No, Paul. I’m very proud of all the people who work at the City Council and consultants that we’ve worked alongside and our community, and, you know, Ernest standing beside me is one of the people who has engaged with our staff and our teams as we’ve gone out to build up a picture to try to deliver the great vision that our people handed us and those 106,000 brilliant ideas.
PAUL Yes, well, Brendon Burns, is it the people’s version, do you think? Are you happy with it?
BRENDON BURNS - Christchurch Central MP
Yes, I am. I think the people of Christchurch have spoken, the council has listened, and this is a great start to the rebuild of the city. It’s a visionary document. We needed that. We needed some symbols of what we can be rather than what we are at the moment.
PAUL What do you make of it, Ernest? You’re an inner-city developer. I think you built the South Island’s tallest building. Your building is fine, but it’s in a dicky zone. What do you make of the plan the mayor’s come up with?
ERNEST Well, it’s a dubious distinction now. I think inner-city property… (VIDEO LINK INTERRUPTED) very supportive.
PAUL I think we’re having trouble, Ernest. I’ll have to excuse you just for a second. I think that we’re losing the link a little bit there. Someone might assist you with a microphone, or whether it was a link, I’m not so sure. Brendon Burns, OK, better use of the river is one of the most apparent things.
BRENDON It is.
PAUL Mark Solomon told us the Maori were too shrewd ever to build along that river.
BRENDON And we have to think about things like climate change into the future, but, actually, the river is at the heart of our city. It’s not really been used very, very well up until now. This envisages us spreading out on to the river, using it better, cycle ways down through that area, uh, a green space. And green is really the word that comes through again and again with this council plan.
PAUL And indeed it does. In fact, we can look at some of the pictures. There’s the mix of green and retail and people in the city. Christchurch Square, which had become very concrete, now looks- is going to be very pretty. That’s Cathedral Square, which would be a great improvement, wouldn’t it? And then you get that mix of residential. Oh, there’s the light rail that you want for $4 billion. We’ll discuss that shortly. Then I think we’ve got a mix of residential and retail. Can we see that? Residential on the top floor of the building on the right, and that’s retail down the bottom. And then the light rail. We’ve seen that. And then let’s have a look at the river from Hagley to the Pacifics, if you like. So there’s the river on the left. So everything’s much further back from the river. Have we got you again, Bob?
BOB Yes, you have, mate. Can you hear me?
PAUL Yeah, I can hear you perfectly. That’s excellent. And we’ve got Ernest as well, I hope. Ernest?
ERNEST Yes, indeed. Can…? (VIDEO LINK INTERRUPTED)
PAUL Oh, God.
ERNEST The main thing… (VIDEO LINK INTERRUPTED)
BOB …that’s what he needs.
PAUL I think we’ll have to stay with you, Brendon. You’ll get the whole thing. Well, Gerry Brownlee says, ‘Nice wish list’. Is that a bit of a dampener? I mean to say ask yourself, if Auckland can’t have $2.5 billion for light rail, why is Christchurch going to get $4 billion?
BRENDON Well, light rail has got to be part of the vision, I guess. It’s probably not the first priority, but we’re talking about a city into the future for a century, so it’s probably good to have it there. It probably isn’t the top of the priority list for some people, but actually this is a visionary document, and we are not just thinking into a decade ahead; we are thinking into a century ahead, and light rail is part of that mix.
PAUL You’re certainly- But $4 billion. Well, Jim Anderton says light rail has made some cities bankrupt.
BRENDON Well, Christchurch doesn’t have the population base probably to sustain light rail at this point, but maybe elements of it. But you’ve got to have the vision, and you’ve got to put up the ideas, and some of the people have said light rail should be part of our mix. We’ve now got to work through and prioritise this list and decide what we can afford, what we want most.
PAUL Now we’ve got Christchurch back again, so we’ll come to you, Bob. So, $2 billion. It’s a 20-year plan, this particular one you announced. 2 billion bucks. $1 billion from your own 100,000 ratepayers, which is a hell of an ask. The other $1 billion from the government and, I guess, private. But the whole reconstruction…
BOB I was going to say that’s not quite right. I mean, what we’re saying is for that public infrastructure that we’re talking about, about $2 billion is the overall. We’ve got roughly half of that in the kitty already from insurance, from grants that we’re eligible for around roading, for example, and reprioritising the capital programme. About three, four years out, we could start a loan borrowing programme. It would add about another 1.5% to the rates. We could look at where we could save in other places. That would take us through with an additional $250 million or thereabouts from central government. So they’ve got the least of it. We’ve got half of it in the bank, essentially, now, and we’re saying that this is a deliverable plan, uh, that won’t blow out the rates and doesn’t cause a major issue for central government. Now, you touched on the light rail. What we’re saying is this: we need to secure the existing heavy rail network for the future, make sure that we don’t limit its ability, and we’ve got some money in there to do a big strategic study around how we can bring that in. But what we’re saying we should do is hardwire Canterbury University back into the heart of the city. I’d love the university to come in.
PAUL Bob, Bob, Bob. $4 billion for some magnificent light rail thing through the whole city is what you want. Where are you going to get that?
BOB Say again?
PAUL $4 billion is what you want.
BOB No, no, no, no, no. $4 billion, Paul, is an estimate of the overall thing linking right out into Canterbury. What we’re talking about here is about $400 million for an initial part of the light rail which would go to the university to the central city area, allowing us to bring more students into the heart of the city. So we’re not saying let’s blow $4 billion straight away at all. We’re saying it’s got a place in the future. This not a five-year plan. This is a 500-year plan. We need to think that we’re laying the basis for the future…
PAUL (CHUCKLES) 500-year plan. The first I’ve ever heard from a politician. A 500-year plan, Bob. Very good. Let me switch the camera across to…
BOB Maybe a 5000.
PAUL (LAUGHS) ‘It will last for a thousand years.’ Can I switch the camera across to Ernest again? The CBD. You’re a man very much committed to the CBD, Ernest, and they want a low-rise kind of a city. Does that bother you? They want a smaller CBD as well.
ERNEST I think there are some issues with that. OK, I think there are some issues with limiting heights to seven floors, because we’ve got issues like viability thresholds. Um, we are awaiting the findings of the Royal Commission on Building Failures which will come out in April next year which is then going to be implemented into the Building Code, and it’s likely to see an increase in costs. So if we limit it in terms of what we can generate out of a site, then the rents have to go up, which makes it unpalatable for business. So I think there needs to be further review on building heights and the relaxation of those in some cases.
PAUL See, from this end of the country…
ERNEST I was just going to say this comment on the light rail. Um, I know there’s a lot of, sort of, debate on the affordability of it, but I agree with the comments made by the two earlier speakers that we do need to make provision for this, because the first step going to the university, in my view, is a very necessary step to take us through to the airport. Christchurch is the second biggest entry point to New Zealand for tourism. We receive 1.8 million tourists. Having that connection from the airport through to the city with new tourist facilities will be an enormous economic benefit for this region and this country.
PAUL Got you, and well said. Can I go back the business of the CBD, a smaller CBD. Now, from this end of the country, if I were the insurance bloke, I’d still have worries about underwriting anything in your Christchurch CBD, to be fair, and I wonder is the insurance industry really going to let you rebuild the CBD, Ernest?
ERNEST Well, the insurance is a big issue not just for Christchurch but ultimately for the whole of New Zealand. I mean, you’ve got Wellington as an active seismic zone, Nelson - in fact, large parts of the country. So insurance is an issue that we start to need looking at right now. And CORE has suggested that the government adopt a policy that it currently has for residential EQC and apply that to commercial property. So all commercial properties up and down the country would pay a levy equivalent to what is being paid under the residential EQC levy, and that would go towards covering the excesses. Because the big problem at the moment, Paul, is this: insurance premiums have doubled, tripled, quadrupled and quintupled in some cases, and that’s the good news. The bad news is that the excesses have gone from 2.5% of claim to 5% of site value. That means if you’ve got a $30 million site, the building owner is covering the first $1.5 million of any claim. So if we have an event in six months’ time or 12 months’ time when everything’s been repaired, the building owner covers that. It’s difficult to manage that for a lender and for an owner.
PAUL I understand that, Ernest. And so it’s gone up for everyone, and you can understand the insurance companies’ reservations. But then is it a fallacious assumption, Brendon, to think that business is going to want to go back into that CBD? Why would you put yourself through that again?
BRENDON Well, I think first time is the healer on the insurance thing, and as time goes on, it will be more comforting for the insurance industry to come back in. And the same as for business. I applaud the council for saying business needs some support and encouragement to come back into the CBD because there are some question marks there.
PAUL But you can’t build until you’re insured, can you?
BRENDON Well, as I say, time will assist that. But don’t forget, we are talking timeframes. We’re not likely to see any building start in the CBD for probably around two years. We’ve got a year of demolition ahead. The issues at the moment are including the heritage. The council’s stepped up and said it wants to try and support the heritage that’s left. The big question mark is whether we’ll actually have anything left by the time another year has gone because it’s going out by the truck full every day to the dump. I think the government needs to play a role there as well as council.
PAUL Well, Bob Parker, you finish this off. I mean, under this plan, how much greener would the city be?
BOB Well, it literally does become a city in a garden, Paul, as we’ve said. But let’s look at that insurance issue. That’s solvable. We’re not looking at anything we can’t solve. They’re big issues. But look at what we’ve been through. I mean, does it get any bigger? We’ve solved so much so far, we can solve a lot more. And remember California. 10% of California- And it sits on a major earthquake zone there. We all know that. Only 10% of the people there have earthquake insurance. Look at the economy, and look at the population. So, there are answers out there. We’ve got them. We will work our way through them with our community. But this really is a once-in-a-millennia opportunity. Let’s stick with the 1000 years. We’ve got to lay the framework for a city here, and in the 21st century, we’ve got to be safe, we’ve got to be sustainable, we’ve got to be green, but we’ve got to be successful commercially, OK?
PAUL It must be very satisfying to at least have something, a vision which to direct yourself for the next 5000 years, Mr Mayor. Thank you very much for your time.
BOB Yes. (LAUGHS) Make it 10.
Thank you, Bob. Thank you, Ernest Duval, and Brendon Burns,
thank you very much indeed.