By Laura Hall
There is a general feeling among Cantabrians that our city centre is taking too long to rebuild, and an ever present concern that life in the heart of our town may never return to normal, or at least not for a very, very long time.
But there’s also the distinct possibility these views are completely unrealistic; that the scale and the scope of the rebuild is a lot larger than most of us realise.
Chief executive of the Canterbury Employers’ Chamber of Commerce (CECC), Peter Townsend serves up some hard truths, suggesting people need to adjust their expectations.
The man in charge
Peter Townsend has been the figure head of the CECC for 18 years. He has lead the organisation through the global financial crisis and two major natural disasters including 11,000 aftershocks and 52 aftershocks exceeding magnitude five on the Richter scale.
Despite the immense pressures and responsibilities the job has accumulated since the first Canterbury earthquake,
he never fails to see the positive side of any situation, always looking on the brighter side of life even in the most dire of situations.
Peter has served as an important and respected commentator on the recovery of the business community. He is a regular face in the media appearing in a countless number of newspaper, radio and television interviews sharing his thoughts on the rebuild of the city.
I had the opportunity to sit down with him at the Chamber’s Colombo Street office to get the latest update on the rebuild, including the Chamber’s role innthe rebuild, constraints that have held up the recovery, property development and advice on smarter renting.
Plus he offers up a reality check on the rebuild to put our perspectives back into check.
Safe pair of hands
The CECC plays an important role in the lives of local businesses big and small. The not for profit organisations goal is to support local businesses and help them to grow and evolve by providing advice, consultancy, training, resources and networking opportunities.
This goal is more important than ever as businesses begin to emerge for the troubles and trials they have faced during the past three and half years and begin to flourish in our new city.
Peter says the Chamber acted as a “safe pair of hands for the business community” after the earthquakes, but its new focus is to encourage businesses to become independent and prepare for the future.
“We’ve been there to assist, support and guide businesses but that has changed into a leadership role particularly in the context of getting businesses to think strategically about their future.”
The organisations membership numbers make it clear the Christchurch business community values the benefits and guidance the Chamber provides.
“Immediately after the earthquake six thousand businesses had to evacuate the central city. I recall quite distinctly my board telling me that I should prepare the Chamber for a massive attrition in membership because about 30 percent of the business community had been really severely impacted. But we didn’t lose anyone; in fact the Chamber of Commerce has actually grown.
“This tells and remarkable story about how businesses have survived through New Zealand’s largest ever natural disaster. Business owners were determined not to lie down and this has resulted in a fantastic outcome for the business sector.”
Cascading constraints
While the city is well on the mend there are still many major milestones to conquer. “We’re about 10 percent into the recovery and rebuild at the moment so we’ve got a long way to.”
The city suffered $40 billion worth of damage and he estimates the repair bill will be around $50 billion.
He says there are various cascading constraints which are blocking the rebuild of the city.
Insurance was the first road block on the road to recovery with many people battling their insurance company to reach an agreement. Today 60 percent of residential insurance and 75 percent of commercial insurance has been settled, meaning people can begin to move on.
He says the second constraint holding up the rebuild was consents. “Getting resource consents and building consents for literally tens of thousands of houses and thousands of commercial buildings through the system was a massive challenge, but the council is now making progress.”
The latest Chamber of Commerce survey cited the current constraint holding up progress is a major skills shortage.
“We’ve got thousands of migrants in our city to assist us with the rebuild, they come from the Philippines, Ireland, Australia and the UK, but we’ve still got a major skills shortage and that’s going to become much more severe before we work our way through it. In certain areas we’re already short of good tradesmen and we’ve only just started the rebuild.”
The Chamber is taking a proactive stance to combat the labour shortage by actively recruiting workers from New Zealand and abroad to work in the city.
But it is also encouraging businesses to take their own measures to mitigate the effects of the labour shortage by upskilling their existing workforce and transferring current employees into vacant roles, rather than advertising for new staff.
The high demand for staff has seen a dramatic drop in the number of unemployed in the city. Unemployment across New Zealand is nearly six percent while in Christchurch it is just 3.2 percent.
Development challenges
Some property developers who led the charge by returning to the central city and quickly rebuilding their commercial properties have faced enormous challenges to tenants.
Richard Owen, who built a new office complex on the former St Elmo Courts site, was recently struggling to find tenants to fill his building and said it was a “nightmare,” warning other developers against returning.
But Peter shrugs off Richard’s warning, preferring to focus on an optimistic future. “Sure the people who went back first will find it difficult initially, but we are now seeing a momentum gathering as people come back into the central city.”
Price Waterhouse Coopers is one of the latest major entities to announce its return to the central city and Peter says these types of commitments from large companies will give others confidence to reinvest.
He says people can’t expect the city to be filled with the type of tenants it used to have. “I don’t have any doubt that good office tenancies will be filled in the central city, but you might find that the mix of tenants will be quite different.”
Before the earthquake the city had a mixture of buildings, old, new, cheap and expensive, allowing for a diverse range of businesses to occupy these spaces.
However the new buildings are all modern, high-spec, A grade buildings which will demand high rents.
“It’s going to be irrefutably expensive to rent in the city because all of the shonky buildings are gone. I think we will see commercial space dominated by high street retail stores and well-off businesses.”
He says this change in office rental accommodation will block some smaller and low-end businesses from returning at this stage.
Smarten up
So if renting a slice of the city is going to be an overly pricey exercise, out of reach for many businesses, how can life return to the heart of our city at all?
Peter explains that we are going to have to become smart renters using new and out of the box ideas to create a viable rental market.
“For example, businesses which used to have their own space will probably have to go open plan, possibly sharing space with other companies. Using this technique means you can put a lot more people in the same square metre of floor space, so the price per person of renting in the city might not increase that much.
“You’ll get clever urban businesses doing things like shared receptions, bathrooms, kitchens and other common resources to be much more efficient than they used to be.”
He says people need to understand we are going somewhere new, we are not going back to where we came from.
“It’s going to be completely different and one of those ways is its going to be more expensive. That means we will see different businesses occupying the sites and different ways of using space.
“The way the central city has been deliberately constrained will mean it will fill up quite quickly and there will be high demand for quality space, I have no doubt about that.”
Reality check
Peter says he knows some people think we should be considerably further ahead with the rebuild than where we are, but says these people don’t have a clue about the size and scale of the rebuild.
To put it into perspective he references to the Santa Cruz rebuild. “Santa Cruz is a dormitory suburb south of San Francisco that lost its downtown area in the 1988 San Francisco earthquake. They lost 39 buildings and it took them 10 years to replace 37 of them. We lost 1,600 commercial buildings, eliminating 80 percent of our core CBD, so we need to be realistic in terms of our time frame.
“Three and a half years down the track we’ve still got 50-60 buildings to demolish in our central city and the rebuild is just beginning. I think we’ve done pretty well when you look at the gravity of what we have been through.”
He says people should not be standing to one side complaining the rebuild is taking too long, rather people should be positively engaged with New Zealand’s biggest ever economic development programme because there are opportunities for everyone.
“When we look back in history and look at the earthquakes and the recovery, we will all say we were hopelessly optimistic when it came to the rebuild of our city and the time frame involved.”
Light at the end of the tunnel
The insurance and resource consent constraints, which initially held up the rebuild, are being lifted and the rebuild is gaining momentum in the central city, “we are starting to see some real evidence of the rebuild and that’s exciting,” Peter says.
“We are starting to see the light, starting to see the central city taking form, starting to see money being invested into repairs and rebuilds and starting to more positivity about our future.”
He says there is still a perception among some people that we are going to rebuild Christchurch the way it used to be, but people need to understand we are not going back to where we came from, the central city is going to be completely different like nothing we have ever seen before“ And that’s a very, very exciting thing to be apart of.”
