Small business: Quake recovery at Otahuna Lodge

Miles Refo and Hall Cannon, co-owners of the Otahuna Lodge. Photo / Supplied

Miles Refo, co-owner with Hall Cannon of the Otahuna Lodge, an exclusive country estate offering five suites and two master suites. Located in Tai Tapu, twenty minutes drive from Christchurch, it suffered damage in the first earthquake, September 4 2010.

What were you first thoughts when you realised the damage done by the
first major earthquake? How well were you covered? What was the damage?

All 10 of the chimneys on the building collapsed at least from the roof line up and the bricks damaged much of the roof slates when they fell. There was much superficial plaster and paint damage inside, some broken glass and the earthquake also broke the sprinkler system in the attic on one side of the house so there was considerable water damage in the rooms on the ground floor and first floor on the northeast side of the house.

From the perspective of our business, our immediate concern was the housing elsewhere of our guests that had been in house that night, the cancellation of bookings for the next four weeks while we figured out what the extent of the damage was, and how long it would take to fix it.

We had good insurance for the damage done to the building. We paid a small excess and a small percentage of the repairs and insurance covered the rest. As a commercial building, the homestead was not affected by EQC. We also had good insurance for the business which enabled us to continue employing all our normal staff at their contracted weekly hours.

What has the recovery entailed?

Designing and constructing multiple replacement chimneys which had to comply rigorously to a seismic code that hadn't yet been established (our engineer at TM Consulting wisely suggested we build them to 100 per cent of modern seismic compliance - in the "unlikely" event that we would have another major earthquake.

And of course we have had multiple quakes which were quite serious but to the engineer's credit, the new chimneys have performed beautifully. It is important to note that there was no precedent for our designs - it was the result of a lot of creativity and long hours in tight deadlines on the part of our engineer Kevin Simcock, our architect Tony Ussher, our estate manager Dave Kilday and a number of people at Fletcher Construction, particularly our foreman John Christie.

We also added seismic bracing through the entire roof cavity and had to replaster/repaint/rewallpaper most of the wall and ceiling surfaces, repaint much of the outside where the paint had been damaged, and attend to all the water damage, replacing carpets, furniture. We also replaced approximately 6,000 slates on the roof and parts of the roof itself that had been damaged by falling masonry.

What are you doing differently now? What have you done to the property
since?

We had to engage in another considerable renovation to all the plaster surfaces, as well as an additional few months each of touch up maintenance for post June and post December quakes after the Feb quake, and also attend to some parts of the building that had slumped. We've engaged also in considerable PR and sales efforts overseas to remind travellers that there are still many wonderful things to see and do in the Canterbury region and in Christchurch itself.

And we have used all the good or salvageable bricks to make a terrace and herb garden outside the kitchen where guests eat breakfast. This is a way for us to proverbially make lemons into lemonade. We also think it important to note that, other than being built, the earthquake was singly the biggest event ever to happen to this property - some people forget that the history of Otahuna did not end when Heaton Rhodes died in 1956. To have a kind of record of the earthquake, to be able to visually see its effect or what it caused/forced us to do is an important part of the history of the building.

Did the experience make you question your location?

No, the building and the context of its garden is quite unique and cannot be found or replicated elsewhere, nor can it be moved. Additionally, this could have happened in any region of NZ or anywhere and can't be predicted, so we don't feel we would necessarily be safer elsewhere. Additionally, we also feel there is incredible potential for Christchurch to be a vibrant and attractive city, and to make all kinds of improvements a city would never have a chance to do because of the interruption to its infrastructure.

What kinds of insurance and other precautions would you recomment to
other businesses like yours?

It will be difficult for business that are location specific, as opposed to ones that could quickly relocate or are virtual, and more so for ones in heritage buildings, to continue to buy insurance at rising rates. Businesses will likely have to spend more effort analysing the risk of potentially lost revenue against premiums which are doubling or trebling but even more so against excesses which are starting to be based on the value of the insured property and not the value of the business turnover or financial loss; this is potentially punitive for business that are heavily capitalised in their location. Also insurance like any other service on the market will be regulated by cost and demand.

How is business now?

When we re-opened in January 2011, we opened to the strongest season we have had to date. Following the February quake which made more impact in international news, business has been down. It is up this year from where it was last year though not as strong as it was in the 2010-2011 season. Some of this is likely related to the perception of the damage in Christchurch and the lack of knowledge of all the wonderful things that are open in the region, from the botanic gardens and Re-Start project downtown, to the entire Banks Peninsula including Akaroa to the Waipara wine region.

However, other lodges around the country have indicated similar patterns to ours which indicate that either people think the entirety of NZ has been affected or is unsafe or that there are other non-related factors at play particularly the high New Zealand dollar but also the weak European economy.

www.otahuna.co.nz