Quake exodus biggest fear for Christchurch

As Christchurch reels from Tuesday’s deadly earthquake, experts say emotion must be set aside and commonsense applied to the stricken city’s future.

The South Island’s largest city was hit by a 6.3 magnitude earthquake at 12.51pm on Tuesday just five months after a first big quake wreaked havoc.

“One of my biggest fears at the moment is flight. Not just of businesses but people too,” said Peter Townsend, Canterbury Employers’ Chamber of Commerce chief executive.

“People in Christchurch have had enough and I don’t want this beautiful city to be compromised.”

At press time, the official death toll was 76 but this was expected to rise as local and international search and rescue teams scour the central business district.

With much of the CBD destroyed or damaged beyond repair, radical solutions for the city’s business heart have already emerged.

They favour a complete CBD relocation to the city’s safer outskirts and a low-rise rebuild of existing sites.

Both proposals involve a total move away from the conventional high-rise towers to safer more sustainable low rise buildings. Planning experts claim abandoning the city for a new location was not realistic.

Although government and essential services will be replaced, the rebuild must be done in such a way that will win the confidence and wallets of private business and investment.

Companies most likely to relocate were service-based businesses and those with discretion to relocate, Mr Townsend said.

The government must lead the way with a post-disaster blueprint and quickly convince private enterprise to remain onside as part of a reborn city.

The fear is discerning private money will walk away and strong public/private leadership is essential to avoid this.

Businesses seek new premises
Christchurch businesses are expected to look for new locations in the suburbs or further afield while the future of the central business district is decided.

Kiwi Income Property Trust chief executive Chris Gudgeon said it was difficult to tell how much good office space was left in the central city but any vacant space would get filled quickly, once it was safe to return to work.

“People will then have to look to suburban or regional locations.

“You’d have to say it’s not a good sign that the Forsyth Barr tower had apparently a stairway collapse. There’s only a handful of big office spaces and taking one out is going to have an effect.”

Mr Gudgeon said Kiwi Income’s Pricewaterhouse-Coopers Centre had sustained no obvious structural damage.

“Our expectation is the PWC centre will continue to function successfully as an office building. But of course the CBD is cordoned off.”

Kiwi Income had already received some enquiries for vacant office space, he said.

Prime Minister John Key indicated this week that the CBD would effectively have to be rebuilt.

 “Christchurch will have a very different feel to it in years to come,” he said.

Mr Gudgeon said Christchurch was the commercial centre of the South Island and must continue to have a place.

“The South Island economy is going to continue. It’s not going to stop. While it’s going to be a rocky year or two or four, Christchurch will have undeniable place in the commercial fabric of the South Island.

“It’s going to have to restore itself.”

Fear of flight
Canterbury Employers’ Chamber of Commerce chief executive Peter Townsend is concerned CBD-based firms will relocate from the central city disaster zone.

“The damage is a quantum leap up from where we were on September 4,” Mr Townsend said. “One of my biggest fears at the moment is flight. Not just of businesses, but people too.

“People have had enough and I don’t want this beautiful city to be compromised because people leave.”

Companies most likely to relocate were service-based businesses and those with discretion to relocate their operations, he said. The city’s largest manufacturers and employers were based in the suburbs and had come through this week’s quake with their buildings relatively unscathed. But many remained affected by the loss of power, water and sewerage across large parts of the city.

Tait Electronics had 1000 employees who were ready to return to work, but they could not open the doors until water and power were returned, he said.

Although immediate efforts in the CBD this week were about saving lives, Mr Townsend acknowledged businesses needed to get back up on their feet as soon as possible.

Timaru offers office space
Some Christchurch businesses have shown interest in taking up offers of space in Timaru, according to Aoraki development, business and tourism chief executive Wendy Smith.

She said there was a register of residential accommodation along with a list of office, commercial and industrial space available, which had been passed on to officials in Christchurch. Several businesses were interest, she said.

Ms Smith said Timaru, about 160km south of Christchurch, could cope with a major influx of people, with the city providing a port and plenty of land for commercial and industrial development.

Had enough
How many businesses in Christchurch that were just about to get back on their feet again, have now suffered an impact that, in some cases, could be fatal, BNZ head of research Stephen Toplis asked.

ASB Bank chief economist Nick Tuffley said the earthquake came when the economy is vulnerable and domestic demand weak. Along with the obvious disruption to Christchurch’s retail and tourism businesses, the manufacturing base would be affected, he said.

Manufacturing is concentrated west of the city and away from water.

“However, this quake appeared to be more violent, so there is potentially  greater scope for damage to equipment which could see production halted for longer,” Mr Tufley said.

Nick Tuffley said a large degree of uncertainty remains, even from the first quake back in September. The assessment process has taken a long time and very little rebuilding activity had begun. 

In addition, decisions had yet to be made on the future of areas badly affected by liquefaction. 

“These factors will also likely hamper the reconstruction of damage caused by February’s quake. In reality, it is likely to be a number of years before Christchurch would have finished rebuilding.”

Adding to the woes, capacity constraints could slow this progress. Mr Tuffley said anecdotes before the quake suggested frustrated builders in Canterbury were opting to go to Queensland and help with the flood damage there instead.

Christchurch’s population is also likely to suffer as stress and nerve-fraying aftershock see residents leave the area.

“Further damage has been done to an already impaired housing stock. Some people may chose, or be forced, to live somewhere else,” Mr Tuffley said.

Change in design needed
An international urban planner and city designer – who knows Christchurch – told the National Business Review areas hit by liquefaction must be avoided because they would continue to be unsafe. In Christchurch’s case liquefaction was where soil substantially lost strength and stiffness in response to earthquakes, causing it to behave like a liquid, bubbling up from underground and flooding streets and properties.

Demetri Baches, an expert partner in Miami-based international urban planners and designers Duany Plater-Zyberk,told NBR from the US the city should be rebuilt on its original sites but with low-rise buildings taking full advantage of technology, sustainability and high level building codes.

“Low-rise landscape is better for a city because it spreads development more evenly. For Christchurch a low-level fabric is not only more economical but also better for the city. And now you have an earthquake issue you also have a safety issue.

“New Zealand is one of the more earthquake-advanced countries in the world. You have pioneered a lot of the building technology so you don’t have to turn very far to retool Christchurch,” Mr Baches, who has more than 25 years urban planning experience, said.
“You could build better; building codes may need to be updated; and craftsmanship and building inspections need to be kicked up a notch but there is nothing new that would require a massive re-think.

“Many cities are on active faults,” he said. “Rebuild or move is typically the first thing people discuss.”

He said the resources it would take to start a city anew would be so great in terms of the environment and the cost – financial and social – that to abandon Christchurch for a completely new location would not be feasible.

“More often than not, the already expended energy to build the place over 150 years, the vested rights people have and the huge draw on the economy make it difficult to pick up and leave,” Mr Baches said.

Mr Baches’ views were echoed by Prime Minister John Key, who also warned of the dangers of liquefaction and said buildings in the CBD would have to be rebuilt.

Mr Baches said San Francisco was rebuilt in exactly the same place and Managua, in Nicuragua, was leveled and rebuilt in the same place.

He said Port au Prince, in Haiti – where his firm did work for the replanning – would be rebuilt in the same place. “You take more precautions and make your building codes stricter.”

Because Christchurch had never experienced earthquakes until now a lot of its building stock wasn’t prepared, he said “It could expose some shoddy construction.”

Focus on smart growth
NBR columnist Owen McShane said the earthquake showed town planners have their priorities wrong focusing on “smart growth” and worrying about rising sea levels.

“Our planners should stop worrying about sea levels rises that might happen in 100 years and start thinking about making our cities resilient in the face of catastrophic events which we know can happen tomorrow.” These events include cyclones, volcanoes, earthquakes and tsunamis, he said.

“Don’t put our motorways in tunnels below sea level. Don’t further intensify the central city, especially near the harbour edge. I suspect given the trauma in Christchurch the city will be re-built as a multi-nucleic low-rise decentralised urban area.”

No matter how good the engineering, people will be reluctant to work in buildings more than a few stories high, he said. Any CBD will probably be built somewhere else, to avoid the risk of liquefaction. “The cathedral and square are a symbol of Christchurch, like the Eiffel Tower, and may be worth rebuilding for that emotional content.

Urban development consultant Phil McDermott also touted the benefits of a low-rise, decentralised city, which he said was potentially life saving in disasters like an earthquake.

“And what can urban designers and planners take from this devastation?” he wrote in his blog. “What does it tell us about the importance of space in the central city, of wide boulevards, generous parks, and civic squares? About the need for more space, not less.”

He said the centre of Christchurch is still relatively open, and perhaps that saved some lives, because it was possible to take refuge in the streets, the squares, and the parks.

“This event must surely erode planners’ resistance to the decentralisation that is the mark of a prosperous, modern city, that makes it that little bit more liveable, and so much more resilient in the face of disaster.

“Perhaps we should be thankful a diminishing share of Christchurch’s people actually works in the CBD today just 26% of the total.

Reinsurers to hike prices for ‘risky’ New Zealand
Reinsurance costs are certain to rise for New Zealand businesses in the aftermath of the latest Canterbury earthquake, Insurance Council chief executive Chris Ryan says.

“I think there’s a significant risk of that – when the reinsurers are paying out this sort of money they want to have a firm view of where they want reinsurance premiums going,” he told NBR.

“Certainly there’s going to be some increase in premiums, to what extent I don’t know.”

Mr Ryan said reinsurance premiums are set to rise not only in New Zealand but also across the region.

“Reinsurers are taking another look at the risk profile of both New Zealand and Australia.”

As a result of the earthquakes on this side of the Tasman and the flooding, bushfires and cyclones in Australia, the low-risk reputation of both countries is under scrutiny.

“You’ll see this region getting more attention from the pricing wizards looking at the real risk of this region.”

He said an oficial from German reinsurer Munich Re had visited recently and indicated increases would be in the region of 5-10%.

The quake was a “double whammy” because insurers had only got through about 25% of the work from the last one.

However, he said because much of the damage this time has been to commercial buildings, which aren’t covered by the Earthquake Commission, insurers will be able to get to work on claims straight away.