Demolished hotel owner may sue council

Photo / NZ Herald

The owner of a heritage building knocked down in inner city Auckland hours after large cracks were found in the walls has asked his lawyers to look at legal action against the new Auckland Council for compensation.

The 124-year-old Palace Hotel on Victoria Street was reduced to a pile of rubble and bricks early today, hours after the cracks were found in the walls facing Victoria St.

Part owner Michael Chow, who bought the hotel for $3.3 million with his brother John in 2008, told NZPA he was not consulted before the council ordered the building demolished because it was unsafe and posed a threat to people and other buildings.

He said the old hotel, which was being revamped as an upmarket brothel, was knocked down without his permission and when he tried to talk to Auckland council chief executive Doug McKay before it was knocked down, Mr McKay walked away.

His version was at odds with Mr McKay's who said the owners were consulted.

Mr Chow said he was consulting his legal team after the council "jumped the gun".

"I never got served a notice in writing that my building was to be pulled down. They just went ahead and did it.

"I consulted my lawyer and he said they needed my permission before they are allowed to pull it down," Mr Chow said.

He could not say how much he might seek from the council but said he had spent "multi-million dollars" on the building. The project had a $10m budget and his company, the Chow Group planned to open the brothel in time for the Rugby World Cup next year.

In a statement today Mr McKay said he regretted the decision had to be made to demolish the old building but the council had no choice.

"All reasonable steps were taken to reach a sound decision, including the advice of engineers who strongly advised that the movement of the building posed a serious threat to public safety," he said.

The cracks were noticed about 4pm and the area was immediately cordoned off, causing peak-hour traffic congestion as the city began to empty out after the business day.

The building continued to move throughout the night and Mr McKay said by midnight it had moved 90mm and windows were breaking spontaneously as more and more stress was placed on the structure. Council officials and engineers were understood to be worried it would not last until daylight and was in danger of imminent collapse.

"After all the options were considered the final decision to demolish had to be made in the interest of preventing the building from collapse and becoming a risk to the public and surrounding buildings," Mr McKay said.

"It's always a tragedy to lose a piece of Auckland's heritage but public safety had to come first."

He said the council worked closely with police, fire service, civil defence and Auckland Transport to clear and evacuate the area and some local residents were sent to hotels for the night.

Mr McKay said the owners were consulted throughout the process and were well aware of the inevitability of the council decision to demolish the building.

Their feedback was actively sought prior to the final decision. Mr McKay said an inquiry into what happened had begun and the council would not make further comment until the investigation was completed.

- NZPA