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The University of Otago could be prevented from building on a $5.5 million piece of land it bought in Christchurch, as the Government intends to buy the site for part of the rebuilding after last year's earthquakes.
The Oxford Tce land is covered by the Christchurch Central Development Unit's (CCDU) proposal for a health precinct surrounding the city's hospital.
The university bought the land in March, before the CCDU released its central-city blueprint recovery plan in July, which included the health precinct proposal.
Property services director Barry MacKay said CCDU's plans meant the university might not be able to build a new facility as intended.
The university had budgeted $590,000 to develop a plan for a new facility to accommodate "expected growth of teaching and research" at its Christchurch medical campus, he said. The proposal was approved in principle by the university council earlier this year.
"If the Government's plans for the new Christchurch health precinct mean this is not possible, then we would expect to acquire another suitable site within the health precinct," Mr MacKay said.
A CCDU spokesman said the Crown had advised the university of its intention to acquire properties under the designation of the health precinct, but the design of the precinct was still to be completed and final decisions on individual properties were still to be worked through.
If the Crown chose to proceed with acquisition of a property and agreement on a sale could not be reached, the Crown could proceed to compulsory acquisition to ensure the anchor project was not held up.
How much money the university would get for the land would depend on a valuation, the spokesman said.
The site was "one of a number" being considered for development within the health precinct.
"Things are being considered on a case-by-case basis across the different sites in the precinct, so to suggest what might happen would be a bit foolish at this point," he said.