Work has started to pull down Rotorua's historic Lakehouse Hotel, which is being taken down gradually due to significant structural and safety concerns with the building.
The Lakehouse was bought by Pukeroa Oruawhata Group at mortgagee auction in 2007 and the group has explored various development options.
However, Pukeroa Oruawhata chairman Malcolm Short said independent reports had highlighted significant problems with the building, including major seismic deficiencies with its foundations and structure.
"Unfortunately, put quite simply, the building is a real and significant safety concern.
"Because of this, we have made the decision to deconstruct the building and this has been signalled to our owners."
Pukeroa Oruawhata commissioned an independent heritage architect to review the building and Heritage New Zealand has also supported the review's findings.
Short said the cost of upgrading the Lakehouse to meet modern earthquake standards was prohibitive.
"In addition, there would be extensive additional costs to bring the building up to modern building standards.
"Before the deconstruction began, the building had been closed because of health and safety concerns. Deconstruction of the Lakehouse is the only option to ensure public safety."
Short said the building was not heritage listed but Pukeroa Oruawhata was working closely with Heritage New Zealand to record the deconstruction and any heritage elements.
Most of the historical elements of the building had been removed or altered by previous owners over time, he said.
The deconstruction is being observed and recorded by an archaeologist, to gain greater information and understanding of building practices of the time.
"The building will be dismantled largely by hand, with key features, joinery and wood salvaged for storage and reuse where possible."
Short said the aim of the project was to make the site safe and Pukeroa Oruawhata had no immediate development plans for the area.
Information on the site's history would be curated and put on information boards which would be erected on the cleared land, Short said.
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Down the road Patrick's Bakery owner Patrick Rattigan said the building had already been empty for a really long time.
"In a way I feel sad, it's such a lovely old building, but saying that I can see it would need a lot of restoration."
Rattigan said it would be nice to see something of the same nature go up in its place.