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Two possible options were given to Invercargill City Council infrastructural services committee members by property manager Paul Horner.
The council’s insurers had "demanded" steps be taken to address risks of intrusion and malicious damage.
The option of retaining the five Esk St buildings would cost about $200,000, as well as an annual cost of $75,000 for the remaining life of the buildings.
Sitting empty, the buildings were being entered and slept in by unauthorised people.
The council’s insurers required steps be taken to address those risks by installation of intruder and fire alarms, and having nightly security patrols and weekly inspections.
The previous council had the opportunity to tour the category 2 heritage status buildings and Cr Lesley Soper said the second option, demolition, would be best.
"I have no doubt at all that the exploration for the cost of demolition is the best way forward."
Committee chairman Ian Pottinger said "it was like a scene from Alien".
Cr Alex Crackett said the buildings were at the time of the tour being used as a test environment for emergency services.
"Even then, they had pulled out because the building was too unsafe and unsanitary."
The buildings — 6-18 Esk St West — were being retained as the proposed location of the future Arts and Creativity Invercargill.
The demolition cost and risks involved will be provided in a project manager’s report, which is expected to be complete by August.