It might have seemed it was never going to happen but the central city retail precinct is signed, sealed and – in 18 months – going to be delivered.
Even his mates don’t get it, says Tim Glasson, relaxing back into the armchair in his tiny, temporary Lincoln Rd office.
Another wave of doubt is washing over when it comes to the rebuild of the central city. People are looking at the current state of the Christchurch CBD and thinking perhaps it will never properly recover.
So when Glasson’s friends bring up the matter, the rich lister – said to be worth a cool $75 million with his many property investments and 20 per cent stake in the Hallenstein Glasson clothing chain – changes the subject.
“I just don’t talk about it. It’s easier. What’s the point? It gets too frustrating.”
Glasson has emerged as one of the small group of local businessmen of a certain age who are busy refashioning the retail core of Christchurch. The other three are Philip Carter, Nick Hunt and Antony Gough.
An atrium in Tim Glasson’s ANZ Centre in central Christchurch. bordered by Colombo St, Hereford St, and High St.
Between them, they are pumping nearly half a billion dollars into a shopping and banking area centred around Ballantynes department store. It is going to be unrecognisably splendid, they say. And the projects are completely nailed down.
Sure, Glasson agrees, there was massive uncertainty until around a year ago. Everything was still sliding about. But now the tenants are lined up, the construction contracts signed.
Where the public sees empty spaces, he already knows the buildings which will fill those spots. It is no longer a question of if, or even when.
Glasson says his own $80m four storey ANZ Centre development – the old Triangle Centre northeast of Ballantynes – is so hedged around with penalty clauses that its shops and offices have to be open for business by Christmas 2016. By early 2017, people are going to see the retail precinct done.
Well maybe not quite. There is a block of empty land by the Bridge of Remembrance that the Crown has ended up owning. There is a carpark the council is faffing about with rather than rebuilding.
But if the retailers can get a sensible outcome on these last elements of the precinct, they reckon they will have created a central city “mall” to beat anything Riccarton or Northlands has to offer.
It will have the parking and public transport access. It will offer a host of name brand stores like Top Shop and Zara that you won’t find in the suburbs.
And unlike Auckland’s Queen Street or Wellington’s Lambton Quay – strung out along some busy roads – it will be a compact nest of laneways and cafes. A modern metropolitan experience.
In his mind’s eye, it is as good as done, says Glasson. He knows because he, like the other developers, has been signing the cheques.
So why argue with his friends? Give them a year and they will be able to see it too.
It is the first time Glasson, now approaching 70, has sat down to talk about his own part in the rebuild. Like most Christchurch rich listers, Glasson has long been a famously private person.
He is known as a tough and careful operator who took over his father’s clothing warehouse in Lichfield St in the 1960s and though a merger with Hallensteins in 1985, built up a chain of men’s and women’s wear stores across New Zealand and Australia.
While officially now just a shareholder in the listed company, business commentators feel Glasson still pulls the strings. The managing director’s job at Hallenstein Glasson has been something of a revolving door – four different faces in the last eight years or so.
In partnership with the firm’s chair Warren Bell, Glasson also controls a large property investment portfolio that includes the $180m Deloitte Centre in Auckland’s Queen St and a private cemetery in Silverdale, north of Auckland.
Ah, Glasson protests, he is not here to talk about his other business interests. But yes, he admits, he has tried to retire a few times without success. And now here he is, because of the earthquakes, with another big job on his hands.
Glasson owned three small buildings in the prequake central city – the Hallensteins and Glassons shops off Cashel St, plus the historic Stewart Dawson building further down High St. About $25m worth.
His initial expectation was that he would collect the insurance and rebuild. “I was going to wait until the city got rationalised and decide what was the most appropriate thing to do.”
Glasson says at first it looked as if action would be fast. In 2011, with the ground still shaking, Christchurch City Council began drafting its central city masterplan.
But the Government decided the result was not ambitious enough and so created the Christchurch Central Development Unit (CCDU), which in July 2012 came out with the precinct-orientated Blueprint.
For the retail zone, the Blueprint called for a compact few blocks of shops with office space above. Cashel St rather than Colombo St would become the main shopping axis.
And to enforce an integrated approach, the CCDU said developers had to submit their proposals as an Outline Development Plan (ODP) which covered at least 7500 square metres.
It was a risky move. Effectively it divided the prime commercial space in the city, several hundred mostly individually-owned properties, into just six half-block chunks. This meant either building owners were going to have to get together with their neighbours to agree a joint development scheme, or else they would have to sell, hand the properties over to someone else with the cash and commitment to rebuild a corner of the retail precinct as a single project.
The CCDU suggested it had the emergency powers to force matters with compulsory purchases if needed. It also said international money was sure to be lining up to take advantage of the opportunity the retail precinct presented. But both these things proved optimistic.
Glasson scoffs at the idea that out-of-town investors were ever going to rebuild Christchurch’s commercial heart.
He says the earthquakes hit as the world was coming out of the global financial crisis. And if they wanted, foreign property firms could head to Shanghai for a 11 per cent return.
Christchurch was a speck on the map with soaring construction costs and an unclear future – the exact opposite of the kind of low risk/high margin opportunities that corporate investors have in mind.
This is why the retail precinct has ended up a project being carried forward by a particular generation – those with the experience and personal wealth to underwrite $100m scale deals. Plus the willingness to accept their ventures can only pay off over the very long term.
Glasson bursts into laughter when asked if he has attempted to calculate his own expected return. “No, I haven’t bothered trying to work that out. You could play with the figures forever. It’s got to be a gut feel as much as anything.”
In fact at the start Glasson found himself sitting it out on the sidelines. He was watching others trying to accumulate the blocks of land needed for an ODP.
Philip Carter had decided to go for the properties around The Crossing, the building he owned east of Ballantynes. The Glassons shop was part of that block so Glasson agreed to sell it to help make Carter’s project work.
Then Wellington-based investor Michael Ogilvie-Lee proposed rebuilding the Triangle Centre as a $100m glass wrapped building. And he needed Glasson’s Hallensteins shop to complete that ODP footprint.
Again, Glasson says he was happy to step back, sell out, wait until eventually something else came along that was worth him re-investing in.
Yet Ogilvie-Lee changed his mind. He was having issues with his Wellington property investments. After a phone call, the transaction was reversed. Glasson ended up buying back his own property, along with the entire Triangle Centre project.
It sounds a bit casual. But Glasson says it boils down to the usual business equation of local knowledge, personal relationships and gut instinct – even if it was a deal with a few more noughts than usual. “I’ve known Michael a long time. We’ve had to work together because our buildings are right beside each other. We shared a common access way. He let me use his car park. He’s an ex-retailer, so we talked about that sometimes.”
Because Glasson was involved in the Re:Start Mall project, he was also hearing the inside gossip of how Carter, Hunt and Gough were developing a logic for the retail precinct. It was becoming clearer how the Triangle Centre could fit into that whole.
Glasson says Ogilvie-Lee had half-signed ANZ as the building’s anchor tenant. It was happy to stay on and take the naming rights. Then he succeeded in signing engineering consultancy Beca to another one and a half floors for its 300 staff.
With Hallenstein Glasson’s board agreeing to take much of the ground floor with a couple of flagships stores, the development was finalised late last year. The Triangle Centre became the ANZ Centre.
The construction contract could be let. Right now, as he says, there is only a hole in the ground. They are digging the foundations and making room for the 96 space basement car park. But any uncertainty is history.
“We’re aiming to pass it over for fit-out in October 2016, so the shops will be open by November next year. And then I expect the offices will fill up over the Christmas holidays.”
Across town on the fifth floor of a new office block in Victoria St, Philip Carter is wrestling with technology. He has just had a wireless display installed in the boardroom and a virtual fly-through of his $140m The Crossing project should play when he taps the icon on his iPad. However the damn thing keeps logging off.
Like Glasson, Carter is worried that once again a negative perception is developing around the central city’s rebuild. There is talk of investors bailing, anchor projects slipping, areas like Cathedral Square being left an eyesore.
Carter agrees there are problems. However so far as the commercial core is concerned – the shops, offices and civic facilities like the bus station and justice precinct clustered around Cashel Mall – the public should be reassured that the big money is locked in.
It took a while, but the button marked go has been pushed.
“If you stand in Cashel Mall now, it’s a bit of a mini-Dubai. There are cranes around the Bus Exchange, cranes where the Grand Chancellor was, cranes where Tim Glasson is, cranes around The Crossing, cranes around Nick Hunt’s buildings. It’s all starting to come out of the ground.”
After another few stabs at the iPad, Carter gets his virtual tour of the Crossing project running. Shiny images of what Christchurch people will be able to walk around by Christmas 2016 begin to play.
Carter explains the thinking behind its design. He says he sent one of his sons, Andrew, overseas to gather the inspiration. There were conversations with other retailers and the CCDU.
Out of that has emerged a vision of the central city rebuilt as if it were an integrated mall – but with more interesting shops and also open plan. A properly urban shopping centre and not a bland air-conditioned enclosure.
Carter says The Crossing will have two levels holding about 60 shops and cafes, with extra floors of offices at the corners. It will be broken up by an atrium and laneways so it feels always like a mix or being inside and outside.
And careful attention has been paid to how his development connects with everything around it. One entrance aligns with the Bus Exchange across Lichfield St, another laneway feeds towards Glasson’s ANZ centre, while the air bridge across to Ballantynes remains.
With all the other developers doing the same, Carter says there will be four blocks of new shops that flow down to Gough’s The Terrace on the banks of the Avon. The central city will have a completely new ambience.
But it relies on getting the car parking right. Carter says the reality is the rebuilt central city can only compete if it also has the accessibility of a suburban mall. Like it or not, success will be spelt out by the very numbers the centre brings in.
So Carter admits that it wasn’t until May 2014, when the council finally agreed to sell him the quake-damaged Crossing public car park, allowing him to increase the number of car parking spaces from 200 to 630, that his plans actually clicked into place.
“That was the circuit-breaker.” That is when he could complete the land purchases – buying 8000 sq m on top of the 2000 sq m he already owned – and start planning the detailed design.
Now it is happening. It looks a bombsite at the moment, but Carter says The Crossing will also open by Christmas 2016. The central city will have a retail precinct that is miles ahead of anywhere else in terms of its attractiveness and ease of use.
Carter does mourn a missed opportunity or two. He says an obvious omission from the “mall in the city” story is a cinema multiplex.
Given central city building costs, it couldn’t pay for itself as a development. Well, possibly it might have worked as extra storeys on top of the new Bus Exchange, he says, but that is history now.
More seriously, there is the question of what is going to happen to what has become known as the south west retail block down by the Bridge of Remembrance – the large site currently occupied by Re:Start Mall.
Originally that was going to be the prime shopping development under a $350m ODP put forward by Australasian property giant, the Goodman Group, with Westpac Bank as the anchor tenant.
This was the outside money that the CCDU promised. But the Goodman proposal got bogged down because local landowners refused to be bought out and the CCDU proved shy about using its compulsory purchase powers to force through any sales.
However it then ended up with much of the land being in Crown ownership anyway after a succession of other deals fell through and eventually all those involved walked away.
The failure of the south west block was why the retail precinct felt stalled – along with the fact that the office blocks were springing up all along Victoria St and Cambridge Tce, the wrong side of where the Blueprint wanted them to be.
Carter now looks at this large empty site and sees it as the other natural half to his mall concept. Especially if the council could be persuaded to integrate its remaining damaged car park, the Lichfield St multi-storey beside Ballantynes, into a coherent development.
“The CBD has to have the scale to fight the suburban malls. They have been the problem for many years. And with that as the other half of a new mall in the city, the CBD’s case would be so compelling.”
Carter’s hope is that as The Crossing, the ANZ Centre, and Hunt’s and Gough’s developments take shape, as tenants and funders recognise the possibility that has been created, this next obvious step is sure to follow.
Development is a confidence game. The central city’s problem is that it is caught between the moment in mid-2014 when the spending plans of the likes of Carter and Glasson finally gelled and Christmas 2016 when Cashel St will re-open with a bang.
The city feels on hold. And also its successes are mixed. Some parts of the CCDU’s blueprint, like the innovation precinct, are looking to have developed a head of steam now.
The East Frame is also shortly likely to be declared a success with the official announcement that Fletcher Living is to be the builder of some 1200 apartments along Manchester St – although at an expected build rate of 150 a year, that may prove a slow burning project.
But then there are the other Blueprint elements – around Cathedral Square in particular, and also the South Frame with its hope of turning car yards into campus style office development – where the vision is languishing.
Yet many are echoing Canterbury Employers’ Chamber of Commerce chief executive Peter Townsend in saying you can’t spend $10b on commercial buildings and $7b on civic buildings in a city the size of Christchurch without it being transformational in the end.
Jonathan Lyttle, managing director for commercial real estate specialist Savills, says in retrospect the Blueprint’s ODP process that tilted the table to half block-size developments in the retail precinct was a real risk.
It probably created a year’s delay because of the extra time it took to accumulate the land, corral sufficient tenants, figure out the designs. However now it is safe to talk about what it is going to look like.
“We bring people down from Auckland and after they get off the plane, they just see the devastation. But once you get them on the ground, walk what is literally just two blocks and tell them there’s going to be 10,000 people here in three years time, they’re simply blown away,” says Lyttle.
The new city centre is going to have more people working within 300m of The Crossing or the ANZ Centre than there were within the whole four avenues pre-earthquake. It will be humming, says Lyttle.
So while chunks of the blueprint vision may take a few further years to fall into place, with the retail precinct, the basic plan is finalised, the tenants on board, the foundations already being dug.
It is as good as built. There is now just the 18 month gap until it actually is.