Wellington City Council faces up to $147 million town hall budget blow-out

By Bill Hickman for RNZ

The costs of strengthening and redeveloping Wellington Town hall could nearly double as Wellington City Council announced a massive budget blow-out on the project.

The council said the $182 million project could cost an additional $70m-$147m to complete.

Mayor Tory Whanau said news of the blow-out was "extremely tough to hear, but not unexpected".

Wellington City Council faces up to $147 million town hall budget blow-out

"We are dealing with challenging economic conditions - but we are more than half-way through the project, which was started by a previous council. There's no way we can turn back. We must see it through to completion.

"However, I join Wellingtonians at being frustrated and annoyed at the news of another cost increase."

Wellington City Council faces up to $147 million town hall budget blow-out
Photo credit: Newshub Nation

The 120-year-old building has been closed since 2013, after being deemed earthquake-prone in 2009. It is a Category 1 Heritage NZ building, on reclaimed land.

Cost estimates to redevelop the site have risen from an initial $32m to $145m, when work started in 2019.

In May last year, the council announced that ballooning material and shipping costs, made worse by the pandemic, would lift the budget by another $37m.

Today, Whanau said potential risks identified by engineers, architects and the main contractors had become a reality.

"The Town Hall is an old, fragile, complicated heritage building built on reclaimed land - and the project team keep encountering new structural and ground conditions that are significantly impacting costs."

In a briefing on the project, councillors were told that the building's heritage listing and consenting constraints meant it was not an option to halt the project or demolish it.

They were told leaving the building in its current state would be a breach of the Building Act and a "start to finish" resource consent meant changing tack was likely to be challenged and would result in hundreds of millions of dollars, already invested, going to waste.

"The community wanted the council to seismically upgrade the building and reopen it as a world-class music venue. It is highly unfortunate that this comes at a considerable cost, but we will have to confront this reality. We can't leave it sitting there unfinished," Whanau said.

Only 25 percent of the piling and concrete works in the auditorium were complete.

A council statement said ground conditions had been even worse than expected - including contamination and dewatering - all impacting on the time and costs of the job.

The basement sits below sea level and the ground was found to be considerably more waterlogged than initially thought; the building's condition was also worse than expected.

Wellington City Council chief executive Barbara McKerrow said the council had taken on the risks earlier identified.

"Given the complexity of the contract and soaring building costs over the past few years, no construction company was prepared to take on all of these risks - so the council had to accept it would need to do so. These risks have been realised to a level even greater than had been anticipated."