Rotorua Museum refurbishment: $30m could be added to the project, says confidential council report
The cost of renovating the Rotorua museum could reach $83 million, creating a funding gap of $30 million, a document obtained by Local Democracy Reporting reveals.
At a minimum, the cost should increase by $15 million, according to the document.
The document is a confidential report to the elected members of the Rotorua Council of Lakes Strategy, Policy and Finance Committee meeting on April 14.
This week, the board did not reveal how the committee – and later, the board – decided at the meeting, saying those details would be released once funding discussions are complete.
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Council says the Grade 1 heritage building – which has been closed for almost six years – is an “extremely complex” project and the mayor says she has “full confidence” in its progress.
The report says the increase is partly due to the impact of Covid-19 and inflation. The board also found that the museum would need $15 million in geotechnical work to meet its initial earthquake safety goals.
It shows that the committee considered recommending to council that the seismic rating of the building be reduced to reduce the shortfall.
The report also reveals the mistrust of the council that a change in the scope of the project could frighten donors such as central government.
The project is funded at $53.5 million, made up of $38 million in external funding – including $22 million from central government – and $15.5 million from the council.
The council has spent $6.3 million of the funding to date.
The report, endorsed by Deputy Chief Executive of the Chief Executive’s Office, Craig Tiriana, said the museum site could sustain a 70% New Building Standard (NBS) rating without ground improvement works.
NBS is a way to measure the seismic performance of a building compared to a new building.
Approximately $15 million in ground improvements would be required to achieve the original ground resistance goal of 80% NBS.
If ground improvement was not required, the total cost estimate fell from $83 to $68 to $73 million and the funding gap from $30 to $15 to $20 million. Labor would also be less invasive and faster.
The board found that the benefit of a 10% improvement in NBS was not “substantial enough” to outweigh the costs and risks.
Seventy percent NBS could mean more damage to the building in the event of an earthquake, but it would still stand. Taonga could be recovered and “personal safety” would be preserved.
The council also changed its design at the start of the project, the report revealed.
The original design, which required building a new structure inside the museum and “attaching” the existing structure to it, was “unlikely to be fully buildable with risk of cost and time. raised “.
A new design, using the “inherent strengths of the structure”, was “less invasive” and would cost $10 million less. It would achieve a building strength – distinct from floor strength – of 80% NBS.
A building below 34% NBS is considered earthquake prone. The New Zealand Society of Engineers recommends a minimum of 67% NBS. In 2016, the building was rated at 15% NBS.
Board Officers recommended that the Committee change the ground NBS target from 80% to 70% NBS, subject to “donor agreement”.
The report said that if the 70% NBS rating were accepted by the board, a shortfall of $15-20 million remained, but the board covering it was “unlikely to be acceptable” to the community.
He recommended that the board seek more funding from existing external funders.
Council officials considered “stopping or suspending” the project if additional funding was not secured, but this was ruled out.
“The museum has been closed for six years.
“The community [is] unlikely to accept an unknown period of further delay.
There would also be risks of further cost escalation and loss of technical expertise, he said.
A ‘high level’ assessment found that in a shortfall of $0-5m the council could reinforce the building to 80% NBS – the remaining ground to 70% NBS – replace the roof and make a fit-up with services for certain parts of the museum.
Council officers recommended a phased approach, opening part of the museum and seeking future funding to complete the rest.
It would be subject to donor agreement and securing “design and consent considerations”. Detailed design work would continue and should be completed by the end of the year.
However, council officials have flagged the risk that funders will not be happy with a partial opening or a new scope and withdraw funding.
The report suggests that the board discuss issues with funders as soon as possible and “emphasize that they have [the] opportunity to provide more funding to provide full scope”.
Another risk in the report was that the project could become “a political issue in the election year” and hamper “positive progress”.
On Wednesday, the museum project manager, deputy chief executive of the Te Arawa Partnerships council, Gina Rangi, said it was an “extremely complex” project.
She said the board assessed alternatives and provided additional expert advice after “constructability and risk issues” arose in April 2021.
She said elected officials have been kept informed and the latest report was sent to them in April, with a public update scheduled for next month.
Rangi said things had progressed since the April committee meeting and discussions with funders were ongoing.
“We know this project is of enormous local and national interest given the history and heritage value of Bath House.
“It will be a community conversation that will be highlighted in the pre-election report, which is due out in August.”
She said the April update excluded the public because it included commercially sensitive information and the board needed to speak to its key financial partners.
Rangi said a ground resistance of 70% NBS would not affect safety.
“We took expert advice on this and our consultants were unanimous that this was the best option.”
The board was also asked if the opening date would be affected.
Rotorua Mayor Steve Chadwick said everyone wanted to see the museum reopen but it was a “very difficult project”.
“Problems were discovered along the way.”
She said because it was a “complicated building” the council had to take the time to get it right.
She had “full confidence” in the progress of the project.
Chadwick was asked to comment on the shortfall, as it was funded by tariffs, and whether the public had a right to hear the discussion at a public meeting.
She was also asked how she voted on the report’s recommendations.
The council announced in April last year that the opening of the museum would be delayed to complete further investigations into the site. At the time, the council said it was due to open in 2025.
The Grade 1 heritage building, which is over 100 years old, closed in November 2016 after being damaged by the 7.8 magnitude earthquake that struck Kaikoura.