Last year, the Environment Court denied Mark Dunajtschik permission to tear down the Category 1 listed Harcourts Building. He was also under order either to make the building safe or tear it down. His planned strategy for making the building safe, which involved maintaining the look of the building but not the specific materials currently there, would have improved safety and would have been cost-effective; the heritage people said it wasn't good enough and that he consequently needed to use a repair strategy that did more to preserve specific heritage construction methods and materials. Dunajtschik said the proposed repair strategy was entirely unaffordable given the tenancies the building could attract even after strengthening.
The High Court batted it back to the Environment Court, saying that the Environment Court erred in placing too little weight on economic considerations. I, and others, read this as a bit of a rebuke to the Environment Court and that the Environment Court needed to pull its head in.
Instead, the Environment Court has affirmed its prior decision.
In a decision released this weekend, Environment Judge Jeff Smith said public safety and the risk to the neighbouring HSBC tower could be protected by measures other than demolition of the heritage building, such as strengthening.
"We have concluded that alternative [of repair] is reasonable, although we cannot compel that outcome on this appeal. However, neither will granting a demolition consent compel the owner to demolish the building."
The findings noted if local government considered a building a danger to public safety, it had powers to require that building to be repaired.
Smith's being a bit silly here as Dunajtschik very obviously wishes to bulldoze the building.
The Harcourts Building sits next to the HSBC Building, both are owned by Dunajtschik, and the Harcourts Building would do terrible damage to the HSBC Building in an earthquake: they'd thump together and knock out the HSBC Building's stairwell.
As the neighbouring HSBC tower threatened by the un-strengthened Harcourts site was also owned by Dunajtschik, "the economic argument against strengthening the Harcourts building looks even more tenuous", the ruling said.Because Dunajtschik risks losing tenants in the HSBC Building if he does not make safe the Harcourts Building, the Court is betting that Dunajtschik will comply with Council's order to make the building safe via a repair strategy that is uneconomical when considered only with respect to the Harcourts Building but perhaps economical if the total value at risk isn't just the Harcourts Building but rather both buildings. The Court is also betting that there won't be a big earthquake between now and this mess's being sorted out.
Council and the Court, by requiring that the building be made safe and follow gold-plated Herittage standards, can extract not the entire value of the Harcourts Building but also the entire value of adjacent affected properties that are under the same ownership.
The magnitude of potential regulatory takings in Heritage cases is non-trivial.