Tauranga City Council has taken a significant step towards recovering $20 million of ratepayer money for the beleaguered Harington Street parking building.

The Harington Transport Hub in central Tauranga had already cost $19m when construction was abandoned in September 2019 over seismic design issues. Costs to the council then carried on, at $4000 per day.

A court date to recover wasted costs from the building's designers has been set for February next year, more than two years after the council lodged proceedings with the court in October 2020.

The intention was to recover "as much as possible" of the $20.5m ploughed into the project, a previous statement from TCC said.

The information has come to light as work has begun to demolish the structure and build a multi-million dollar hotel and carpark in its place.

Tauranga City Council general manager infrastructure Nic Johansson told Local Democracy Reporting the hearing of ‘separate questions' was set to start on February 13, 2023 in the High Court.

Five days has been allocated for the hearing.

The council would not confirm who the legal action was against but told Local Democracy Reporting to apply through the court.

LDR discovered, from the court, that the proceedings are against the structural engineering company contracted to design the building, Harrison Grierson.

The action was also against other parties neither the council nor court, would name. LDR has applied for the court documents and is awaiting a decision on whether they will be released.

As well as litigation, the council lodged official complaints with New Zealand's professional body for engineers, asking for action against three unnamed engineers in December 2020.

'There are disciplinary proceedings sought through Engineering New Zealand against the structural engineers involved with, and approving the design,” said Johansson.

Engineering New Zealand (ENZ) general manager Justin Brownlie said the investigation was progressing and it was 'unlikely further information will be made public this year”.

When asked if this timeframe was typical for complaints of this nature, Brownlie replied: 'Complaints which are technically complex and/or involve multiple parties can take some time to progress through the complaints process.

'Taking that time is important to ensure a good process where all parties are given a fair and reasonable opportunity to present their account of what happened.”

Only decisions about complaints upheld by a disciplinary committee would be made public, said Brownlie.

If the complaints were upheld, penalties included: removing or suspending the engineers' registration and/or their ENZ membership, censuring the engineers, ordering them to pay a fine not exceeding $5,000, according to the ENZ website.

The disciplinary committee can also order that the engineer contribute to the costs of the inquiry and be named.

The off street parking site in 2017, before construction began. File photo: SunLive.

The building's demise

Construction of the $29m Harington Transport Hub, set to be a nine-storey building with 550 carparks, began in June 2018.

In March 2019 the structure was 20m high when a beam twisted during a concrete pour, triggering concern.

Between June and July 2019 seismic design problems were revealed.

A high level structural review carried out by engineering company Holmes Consulting, showed floor, column and bracing weaknesses.

This included foundations so thin they needed another 300 tonnes of reinforcing steel and 140 truckloads of concrete, as well as basement wall strengthening to all four corners and eight columns that needed destroying using hydro jets, while propping up floors above.

In September 2019 construction was halted and later that year work began on a remedial strengthening design.

The mass of concrete and steel framing would remain untouched for close to three years.

By May 2020 the construction company Watt's and Hughes, engineering firm Aurecon and Harrison Grierson could not agree on a strengthening design, according to documents obtained from council.

In June 2020 a closed door meeting was held with the mayor and councillors to decide the hub's fate.

A decision to abandon the project was made because of the 'prohibitive cost” of remediation.

An estimate to demolish the building was $26.5m, structural remediation would have cost $55.4m, and demolition and rebuild was costed at $64.4m, according to a report from TSA Project Management.

At the time mayor Tenby Powell said: 'As unpalatable as it is to abandon a project which has already cost $19 million, our expert advice makes it clear that the completion options available to us would simply be sending good money after bad.”

Nearly a year later, in March 2021 the site was sold for $1 to Waibop (Hamilton) Limited - a subsidiary of the original construction company Watts and Hughes.

The agreement meant the new owner would take responsibility for the property and existing structure.

Unused materials and structural steel purchased for use in the building, plus a negotiated settlement for the cancellation of the construction contract, resulted in a final payment to the council of $200,000.

An artist's impression of the new hotel and parking building. Image: Supplied.

A fresh start

The multi-million dollar 14 storey hotel and carpark with 200 public parking spaces will be built on the site by Watts and Hughes.

A $4m building consent for the carpark's foundation and structural works was granted by TCC in September.

Watts and Hughes managing director Craig Watts told LDR completion of the carpark was expected by October next year.

Watts said they were working with a 'preferred hotelier” and once that agreement was unconditional, construction drawings for the hotel would 'commence immediately”.

'Once we get through the car park, we hope we can carry on with the actual hotel construction.”

The 'preferred hotelier” was 4.5 stars, which Watts believed 'Tauranga needs badly”.

TCC commissioner Stephen Selwood said the council welcomed Watts and Hughes plans to redevelop the site and ensure it provided public car parking as well as parking for future users of the building.

'We also note that the commercial uses planned for the structure on this site will have significantly changed the financial viability of the development, compared with the situation the council faced when it reached a decision that it was not viable to remediate the building's seismic design deficiencies.

'The availability of 359 privately-developed off-street carparks adds to the many initiatives underway or committed in the city centre and will help offset the loss of off-street parking on The Strand, when the current carpark is redeveloped into a waterfront recreational space everyone in the city can enjoy and be proud of,” Selwood finished.

Harrison Grierson was approached for comment but declined because 'the matter is the subject of litigation.”

Public Interest Journalism funded through NZ On Air.