CIVIC SQUARE LEASES

Sun (Auckland), Volume I, Issue 162, 29 September 1927, Page 10

CIVIC SQUARE LEASES

Building Conditions Criticised

IMMEDIATE REVISION URGED THAT the building conditions attached to the sale of the Civic Square leases are a mistake, anc: that the City Council should announce immediately a modification, or an intention to make a modification under certain circumstances, is the unanimous opinion of leading Auckland estate agents. Otherwise they think there are few prospects of a successful sale.

'T'HE agents also agree that by inA sisting on 55 feet of building being done in the first three years the council threatens to create a glut on the market, a third of the present office accommodation of the city being vacant a,t present, and rents being 30 per cent, lower than they were a year or two ago. The building conditions provide that, the buildings on the leaseholds must be carried to 55 feet in the first three years, and to the miximum in the first eleven years. Generally the agents were of the opinion that if the council was holding

the right to revise the building conditions after the sale it should announce the fact, but that in any case the provision for the building of some eight stories in 11 years, five of them in three years, was quite outside the requirements of the city, which would not require further office accommodation for another five to seven years. The majority of those seen by THE SUN were of the opinion that the council should immediately revise the building conditions in favour of prospective lessees, and should not call for more than two stories in the first five years, these being built strong enough to carry the other floors when required. In Perpetuity “Of course the conditions of the auction mean that the Civic Square site as a place for municipal purposes is going to be lost to the city for ever,” was the opinion of Mr. George Walker. “The leases are for 66 years and in the middle of that period the buildings will require extensive alterations to bring them up to date. No

compensation being payable, it is obvious that the lessees will require a guarantee of extension of the lease when it expires. It is safe to assume that these extensions will be granted from time to time, and that the leases will really be in perpetuity. A similar position has been exampled in the leases at present being renewed by the Auckland Harbour Board. “This square, not being essentially in the business area, in my opinion, returns from anything above the first floor will not warrant building for another five to seven years,” asserted Mr. Walker. “Another very undesirable feature is that all the sections in the main block are going to be offered in one lot. If not taken as a whole they are to be offered in smaller lots, and finally in sections. In my opinion that arrangement is to the distinct advantage of certain interests known to be interested in securing the major portion, if not the whcde. of Block A People requiring sections for retail purposes will have very little chance of obtaining them.” Mr. Walker thought the council should be prepared to state whether it was true or not that it was prepared to modify the building conditions should the block be acquired as a whole. Primarily, however, he thought the leases should be for 21 years, with two-storied buildings, leaving the city free to repossess Itself of the area if it desired it then. Mr. T. Mclndoe was firmly of the opinion that the allowing of small buildings permanently would be a calamity, but forcing the lessees to build huge unnecessary buildings was merely forcing them to take on a “white elephant.” Financial Difficulties “You cannot create a new Queen Street by law,” remarked Mr. P. M. Hansen. “Shops are easy enough to lease in Queen Street, but offices and warehouses are quite another question. There are hundreds of offices available in a much more central position than the Civic Square is likely to be for many years. Between the Dilworth Building, Cook’s, Ltd., South British Insurance, E. Porter’s, Lewis Eady’s, Colonial Mutual, Yorkshire House, Melvern’s, the State Insurance, Nathan’s, Smith and Caughey’s and a number of others, either building or shortly to be built, it is questionable whether even five years will see any shortage. The Civic Square would only create an absolute glut. “The financial aspect must not be lost sight of, either,” remarked Mr. Hansen. “It will be next to impossible to raise money on the buildings stipulated for in the leases. That leaves the bidding to people with money, but it is very doubtful if they will hold it up in useless floor space.” “It is better to right the position immediately and give the leases a chance,” is the general impression. It is believed that large Austr; ) an interests have intentions of bidding for the block on the corner of Queen and Wellesley Streets.