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Council staff have confirmed they are in the early stages of researching possible changes to the council's district plan, including zoning, which could encourage a greater use of heritage buildings in the city.
The move comes as a Dunedin developer, One Zeal manager Lawrie Forbes - also of Zeal Steel - criticised the council's district plan rules for discouraging the restoration of heritage buildings.
He believed the precinct around Vogel St had the potential to rival Oamaru's historic section, and development of it could provide an alternative to the council's controversial harbourside plan.
However, the area was part of the large-scale retail zone, and any owner looking to restore an old heritage building for reuse would struggle to comply with the zone's rules, he believed.
Instead, they were left facing a mountain of consent and consultants' fees, a drawn-out fight for resource consent, or simply tearing down the old buildings - if they were allowed.
Mr Forbes' restoration of the Rogan McIndoe Print buildings, between Crawford and Vogel Sts, has been mired in negotiations with council staff, with the bill for consents and consultants standing at $10,000, he said.
The more than $1 million project aimed to provide a mixture of retail and office space, with one hairdresser and one logistics company already signed as tenants.
However, he has been told by council staff his project would not meet the zone's rules, which among other things required a minimum 1500sq m of retail floor space per building.
Mr Forbes said the total floor space across four buildings at the site - spread over multiple tenants - would be greater than 1500sq m, but not individually, meaning the development did not satisfy the zone's rules.
Instead, he had been told he would have to apply for retrospective resource consent, meaning the final bill for consultants and consents could top $40,000.
"The only way we can do large-scale retail in these buildings is to pull them down.
"Change can't come soon enough to save some of these heritage buildings ... [The council] needs to encourage people doing what we are doing," he said.
Mr Forbes spoke out at last week's public meeting on heritage buildings, organised by the council, and has since launched a public protest outside the McIndoe buildings.
He has parked a 1951 Ford Prefect outside the building's Crawford St entrance, with a sign saying he was selling the vehicle to pay council consent fees, to draw attention to the problem.
Mr Forbes' arguments have won support from Cr Dave Cull, the chairman of the council's new heritage buildings steering group.
Cr Cull said one aim of the group would be to identify obstacles preventing the economic reuse of heritage buildings, and find ways around them.
"The buildings are actually quite splendid ... [and] it's not just one building. There's street after street of them.
"If the district plan, which you would hope is designed to protect heritage buildings, is putting them at risk, then we should change the district plan," he said.
However, the hurdles were complex and beyond just zoning rules, also including a lack of economic pressure for their use, the cost of consents and new regulatory requirements such as earthquake strengthening, he said.
Many of the buildings were also on leasehold land, meaning building owners would not always see a full return on their investment, he said.
Council city development manager Dr Anna Johnson acknowledged there were problems with existing rules.
It was hoped research and a review of the city's activity zones - including a close look at large-scale retail zones - could lead to changes to the district plan, with drafts considered next year, she said.
However, the city's "very large" number of buildings and smaller number of available tenants also needed to be carefully considered, to avoid empty shops in George and Princes Sts, she said.