Memorandum

SUBJECT 3 Victoria Road, Devonport - Building update

DATE 9 August 2019

TO Devonport-Takapuna Local Board

FROM Ian Wheeler

1. Purpose

2. The long-term future of the property (and possibly Harmony Hall) is still being investigated as
per previous discussions. This is taking longer than anticipated, therefore Panuku is seeking to
identify acceptable interim options in order to utilise the building in the shorter term while
we establish and agree the best long - term plan.

3. Background

4. The property is deemed an Earthquake-Prone Building (EQP) with a New Building Standard
(NBS) rating of below 34 %. This creates additional risk considerations under the Health and
Safety at Work Act 2015 (HSWA) for both council (as landlord) and a potential occupier (as
tenant), as they must mitigate risks under their obligations as the Person Conducting Business
or Undertakings (PCBU).
5. The property was transferred to Panuku for rationalisation in mid 2017 as there was no
ongoing service requirement by council for the property. Panuku has been working with the
Devonport-Takapuna Local Board (DTLB) on considering future options for the building since.
6. The DTLB has previous expressed its desire that council retain ownership of the building,
ideally for a community related activity. This is contrary to the council officers advice that no
service or community need has been established. Hence its transfer to Panuku. Upgrading
and seismically strengthening the building for whatever future purpose that is agreed, will
necessitate considerable capital expenditure.
7. Paragraph removed
8. The property has been vacant since July 2018 and whilst council seeks to derive revenue from
its buildings, progressing options for its use and occupation has been delayed due to the
uncertainty of the future use and timing thereof. If a resolution on the long - term plan had
been possible in a shorter time frame our ability to progress would have been hindered by
any current lease or occupation of the building. The occupation has also been affected by the
current risks and liabilities for leasing an EQP building. However given the above process will
take a longer time than anticipated we wish to progress an interim use and occupation.
9. The heritage frontage is not conducive to retailers who prefer wider glass shopfronts from
which to display products to attract customers. A short-term tenancy (i.e. less than three
years) is also unattractive, as a business is unable to recover any capital investment for fitout.
The retail sector therefore tends to seek initial terms of five years or more.
10. Possible short-term retail uses include pop-up shops which do not have a fitout requirement
however they seek shorter terms of 6 - 12 weeks only before moving to other locations.
11. The Devonport Information Centre has expressed an interest in re-occupying the building
however they had previously declined to sign a lease (due apparently to lease conditions and
the liabilities placed on the trustees because of the EQP rating and related Health and Safety
considerations). They were also not prepared to pay the previously agreed rental which was
based on covering the operating costs of the building.
12. Panuku advised the DTLB back in May that it would need to try and identify an interim use
(tenant / activity) given the time taken to date and the further time that will be required to
resolve the optimum long-term plan. We have made some enquires within the community
and to date have been approached by only one interested party.
13. Panuku has therefore reviewed what options there are to activate the property in the interim
period.

14. Next Steps

15. To further progress the matter, Panuku will be running a short Expressions of Interest (EOI)
campaign to identity prospective tenants from both the commercial and community sectors
in a fair and transparent manner.
16. As part of an EOI, it will be necessary for Panuku to advise prospective parties of the buildings
status as an EPB and the implications of this in respect of the Health and Safety at Work Act
2015 (HSWA). Prospective parties will therefore need to identify and manage any risks
associated with working in the building, to meet their responsibilities as a PCBU. It will be a
requirement that any occupancy will need to be legally documented and that the risks are
acknowledged and accepted by any future tenant or occupant. This is to ensure all parties are
fully aware and risks are appropriately managed.
17. The terms of the EOI it will need to reflect a temporary occupancy to allow flexibility for
Council, Panuku and the DTLB to act once the long-term future of the building has been
confirmed and agreed.
18. The EOI will therefore seek from and consider the following from prospective parties:

o Financial element of proposal - Panuku will consider all expressions of interest and in
doing so will consider the specific circumstances that this property is in, the
parameters that exist, the extent to which it generates revenue for council and or
covers or contributes to the costs of maintaining the building and services therein.
o Lease term - An initial 12 month term will be offered with a termination provision in
council’s favour on service of three months’ notice.
o Maintenance / improvement – The property will be leased on an “as is where is basis”
and council will not undertake any works to improve the condition of the property
over and above its statutory requirements as building owner.
o Quality of proposal – The extent to which it activates, complements and positively
contributes to this part of the Devonport village. The track record and credibility of
the entity and whether it is defined as a PCBU under the relevant legislation.
19. On receiving the expressions, Panuku will evaluate these and decide on the most suitable
option in due course.
20. The key contacts at Panuku managing this process are Lucy Oliver (lucy.oliver@panuku.co.nz)
and Ben Maw (ben.maw@panuku.co.nz).
21. Panuku are working with the local board services team to find a suitable date to update the
DTLB where we are at with the long term plan including certain constraints to resourcing the
community needs assessment and the optimisation idea.