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The Dunedin City Council could face a $5.6 million bill if it is forced to inspect thousands of city buildings as part of a nationwide drive to identify earthquake-prone structures.
And, if blanket new rules are adopted, more building owners could follow the Bell Tea factory and quit the city, rather than pay substantial sums to upgrade their buildings, council staff say.
The comments came in a council submission on the Government's Building (Earthquake-prone Buildings) Amendment Bill 2013.
The Bill would give councils five years to assess nearly 200,000 buildings, including all non-residential and high-rise, multi-unit apartment buildings, for earthquake risks.
Owners of earthquake-prone buildings would then get another 15 years to upgrade to at least 34% of building code requirements, at an expected cost of about $1.7 billion.
In Dunedin, that would mean the council was responsible for inspecting more than 4200 buildings, at a total cost of about $5.6 million over five years, council heritage policy planner Dr Glen Hazelton said in a report.
The report, detailing the proposed new rules and the council's submission in response to them, would be considered at today's council planning and regulatory committee meeting.
The change would also switch the responsibility for - and cost of - building assessments from private building owners to the city council and ratepayers, the submission said.
The council's existing earthquake-prone building policy gave owners until July 1 next year to provide the council with initial assessments at their own cost.
However, some building owners were already scrapping plans to pay for their own assessments, in anticipation of a change in policy by the Government, the submission warned.
''The result has been to discourage building owners from becoming more aware of the risks their buildings present and from planning to mitigate these risks.
''This will actually reduce the city's preparedness for a seismic event and slow existing progress.''
The council's share of costs would come, in part, from a requirement to inspect all buildings built before March 31, 2005, despite those built after 1976 being deemed ''very unlikely'' to be earthquake-prone, the submission said.
The Bill also needed to be ''absolutely explicit'' earthquake strengthening would not also trigger the need to upgrade fire systems and access arrangements in buildings, it said.
Otherwise, Dunedin could see more decisions like that made by the Bell Tea and Coffee Co, which last month announced it would relocate to Auckland rather than pay to upgrade its building.
The company had faced a bill for seismic strengthening of about $100,000, but - under existing regulations - that triggered a requirement for another $900,000 in fire and access improvements at the same time, the submission said.
The company's move was a blow to Dunedin's economy, and was ''exactly the type of problem'' councils in the South were worried about, but it might not be the only one, it said.
The new rules - if unchanged - would lead to more ageing buildings being demolished, rather than upgraded, and a regional approach was needed, it said.
Otago Chamber of Commerce chief executive John Christie, speaking last year, had already criticised the new ''one-size-fits-all'' approach, which would force owners in the South to meet the same requirements as in Auckland without the same economic incentives to reinvest.
That was despite the city being in one of the lowest-risk earthquake zones in the country, he said.
At the same time, less responsible building owners, as well as churches and others in the non-profit sector, would be unwilling or unable to meet the costs, leading to more ''demolition by neglect'', he believed.
Dunedin Mayor Dave Cull warned last year the new rules could spell the end for some buildings, including heritage buildings, and businesses.
''It could be a death sentence for some buildings and even some businesses,'' he said.