Demolition threatened; job loss possibility raised

Developer Russell Lund listens during a Dunedin City Council panel hearing yesterday. Photo by Craig Baxter.The would-be developer of a historic Dunedin warehouse has threatened to try to demolish the building if he is not granted consent to convert part of it into apartments.

But an international steel manufacturer based next to the building says if consent is given for the 24 apartments, the result could be the closure of the foundry and the loss of 39 jobs.

A Dunedin City Council panel yesterday started considering an application from Russell Lund to convert the top floor of the Loan and Mercantile building, in the city's industrial waterfront area.

More submissions on the negative impact of residential encroachment on the industrial area are expected from other businesses and the Otago Chamber of Commerce today, as the hearing continues.

During the 90-minute delivery of his submission - to Crs Andrew Noone, David Benson-Pope and Lee Vandervis - developer Mr Lund referenced Richard Nixon and the Bible, called the Chamber of Commerce, which opposes his plans, ''a disgrace'', and made emotional statements about the national significance of the building and the financial commitment he had made to it to date.

He would reluctantly accept consent conditions of a ''no complaints covenant'' on the apartments' titles and mechanical ventilation, so residents could close windows and still have air circulating, as ways to manage potential issues with noise - the fundamental concern of city planners and submitters who opposed his plans.

But Mr Lund reminded the panel he had a legal right to make a viable income from his building.

''To make this 100% clear: if this application is declined, I could seek, via the courts, to have this fabulous (DCC's term) building demolished the very next day, and without doubt, whatsoever, consent would be granted,'' he wrote in his submission, which he read to the panel.

''Our application would be very brief,'' Mr Lund said.

''... the council in the planning report have made our case for us by confirming the building has been empty for 40 years and functionally obsolete and there is no other viable economic use.

''We have no doubt the courts would reserve some harsh judgement to a council that ... (in a council minute) confirmed the building was obsolete and that the owner should be accorded special assistance to find a use for the building, then when the owner sought consent for a viable economic use - declined it.''

He gave the example of the category 2 listed Ashburton Railway Station, which was demolished when earthquake strengthening became uneconomic and there was no viable use to justify the spending.

''We want to reuse this building and see it preserved, but we can't do that if it's going to sit there without financial support, there's no other viable economic use, so why should I pay $50,000 a year for a building (on rates, insurance etc) that won't be used?''

In contrast, Esco Dunedin site manager Dean Taig told the panel if the apartments were allowed next door he would have ''grave concerns'' for the future of the foundry which employed 39 people and had plans to employ 100 people.

He was aware of problems residents could cause in industrial areas.

In Brisbane, 69 people lost their jobs last year after the Esco foundry closed.

It was closed largely because the company could no longer afford to continue investing in the plant to manage its effects following noise and odour complaints and issues resulting from nearby residential developments.

The company's Portland operation recently announced it was partially closing because of extra resources needed to operate a foundry in a shared location between industrial and residential areas, he said.

Esco counsel Daniel Clay said all port and industrial activities in the area would likely have to spend significant amounts to mitigate their currently acceptable environmental effects.

A no-noise covenant would not suffice because it was not practical to enforce, required intensive management, and others might complain on behalf of residents.

Most importantly, the existence of residents in the area would skew the subjective assessment of what sort of noise and other emissions were acceptable, ratcheting standards higher at the expense of businesses.

Co-locating industrial and residential growth impacted on industrial activities, he said ''This was the very concern identified in the Harbourside Plan Change, and [Mr Lund's] application crystallises the issues and concerns raised in that process, which resulted in the withdrawal of the plan change ...''

Esco was also concerned about the effect on the area of more traffic, and precedents, though Mr Lund had earlier said it was not reasonable to expect him to provide more parks than required for the development or to resolve other businesses' parking issues.

No precedent would be set as the council had already acknowledged the building was unique and in a unique location, he said.

Demolition threat

I hate the perception of Mr Lund giving an ultimatum to the DCC. If it is make or break for this project why did Mr Lund buy it in the first place? Personally I like the idea of the building being preserved and recognise it has to be economically viable. However, for someone of Mr Lund's experience and business acumen to start throwing threats about unless he gets his own way smacks of personal interest superseding a long thought through and debated zoning process.


It hasn't been empty for 40 years though. I remember the go karts which used to have a track in there about 18 years ago.

Loan & Merc

I see no other option in this case for the Loan & Merc to be demolished. The zoning on the north side protects industry. South-side mixed use. And the proposed Hotel 20m way mixed use. That's the way it goes. Council can't have a dollar each way here as usual.

I haven't heard a grown man have a tantie before...

If he wants to build apartments let him. But the existing business should have rights too. If he builds apartments with the existing noise there and he can't fill them it is up to him to eat the loss. However, with soundproofing so advanced these days is it likely the apartment dwellers will be disturbed? And if they are isn't that the risk the took buying an apartment in an industrial area? Let them bully it out and the apartment buyers can beware. I would rather keep the lovely building for the future than lose it over a tantie.

Loan & Merc

In context, Mr Lund's comments were not in the slightest petulant and it is quite obvious that he is the last person who wants to see this building demolished. The scaremongering about job losses is entirely misplaced and I don't recall it being raised in relation to the proposed hotel just a few metres away. I wish this excellent project every success.

LIving in the city

The manager of ESCO said he 'was aware of problems residents could cause in industrial areas".  

Has he not travelled the world recently? A residential/commercial/industrial mix is commonplace and desirable as more people go back to city living. Losing this building for a developmental space would be such a waste of a grand design. This building is a Dunedin landmark and we are lucky someone is willing to bring it back to life.

Threat to Dunedin is real

Yeahright: It's a reality that the building would have to be demolished if upgrading does not go ahead and we can say goodbye one of Dunedin's greatest industrial buildings.  I have admired and toured this building and it is outstanding. Mr Lund is doing Dunedin a favour - an empty development space won't add to Dunedin's 'must sees'.   


An obsolete and neglected building on a prominent site - that site would be worth a lot more without that building

I think the building would look great cleaned up, and wouldn't like to see it knocked over...  but if it can't make money, then why wouldn't he?

The buildings might be old, "pretty" and heritage, but if the owners can't make money off them, they're doomed.

Valid point

Russel Lund does have a valid point in that, if a building has had no substantial use for an extended period of time and no suitable activity will take place in it in the foreseeable future then the land on which it sits should be put to better use.
The arguments re job losses can equally apply to jobs being created by unsuitable buildings being demolished and more functional ones put in its place.
And that the Otago Chamber of Commerce was all in favour of the hotel development just across the road yet opposes this development is unsurprising. I am guessing that Mr Lund is not a CoC member but many of those pushing for the hotel are.
Maybe the DCC, Esco Dunedin or another affected party should buy the property. Then it can then stand and rot for another 100 years. [Abridged]


Common sense must prevail

This is exactly the type of development Dunedin needs to breathe new life into our heritage buildings. As apartments co-exist with industry in other cities worldwide, it's difficult to appreciate the comments from Esco's Dean Taig.

He claims that a no-noise covenant "was not practical to enforce" and "required intensive management". Surely the very nature of such a covenant will prevent residents from complaining in the first place? Mr Taig's concern that "others might complain on behalf of residents" appears to be similarly misplaced. 

We're talking about a beautiful building which has been vacant for forty years. A properly drafted legal covenant will provide Esco and others with all the protection they need. The Council should approve Mr Lund's application without further delay to encourage further rejuvination of Dunedin's heritage building stock.



Mr Lund: Your mere threat of demolition has made you look like a petulent child who is going to throw his toys if you do not get your own way. I look forward to you following through if you dont get your own way.

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