An extra $3.4 million will be spent upgrading a building at Tauranga’s Historic Village because of structural issues.

Upgrades to the building known as Complex 2 at the village began in December 2022, but “significant structural issues” were found in April.

These included discontinuous studs, no boundary joist around the first floor, along with strapping inconsistencies.

The Tauranga City Council commission approved the additional funding at a meeting on Monday.  The total budget for the upgrade project is now $7.2 million, up from $3.8 million.

The Historic Village is a council owned and managed community facility. It hosts shops, events and community groups in mix of historic and replica buildings on 17th Ave.

Complex 2 was built in the early 1980s mainly by volunteer tradespeople. It sits in the middle of the village centre and is a focal point from the entrance.

Council community services general manager Barbara Dempsey said it was an “integral building for the operation of the village”.

An aerial map of The Historic Village outlined in yellow. Photo: Tauranga City Council.

It housed the commercial kitchen used by the village’s café and other venues for catering, and the Balcony Room a "key venue" for event hire.

A temporary kitchen has been set up in a container to service the café and catering needs.

“We've got a lot of buildings in the village that need upgrading. We have gone a very long time without repairing and maintaining some of these buildings.”

The original “reasonably comprehensive” upgrade included work on the kitchen, elevators and toilets, said Dempsey.

The team carried out a “massive assessment” of the building but it was only when the wall lining was pulled off they understood that the project had changed, she said.

“It’s no longer a significant upgrade. It's now structural upgrade along with the upgrade that we want for the operations of the building.

“We're very mindful that we can't keep adding to the ratepayer input into the village.”

The team planned to look at all the buildings in the village to “make the balance sheet better,” said Dempsey.

“Whether that's actually earn more money so that we can still upgrade the current buildings or make some tough decisions about some other buildings.”

Commission chair Anne Tolley said if buildings at the village weren't "fit for purpose" they may need to be closed. Photo: John Borren/SunLive.

Commission chair Anne Tolley said the council got complaints from “time to time” about trying to make the village operate in “a financially sustainable way”.

“That's how it's got to operate, otherwise we get buildings that are not fit for purpose being used by people.

“If there are buildings that are not fit for purpose, we may well have to close them rather than let community groups use unsafe buildings at a peppercorn rental,” said Tolley.

“I just continue to be amazed how successive councils have allowed some of those buildings to be used by good, kind-hearted, passionate members of our community in buildings that are not fit for purpose because it's a peppercorn rental.

“Peppercorn rentals don't pay for building upgrades, that's the problem.”

Peppercorn rent is a small amount paid to the council for use of the building.

She requested Dempsey’s recommendation that a full business case be prepared and presented to commissioners, be adopted.

This was to ensure that the reliance on ratepayer contributions were not increased from the $8.2m capital expenditure and in $2.4m operating expenses budgeted in the draft 2024-2034 long-term plan. It would also consider the condition of other buildings in the village.

Commissioner Bill Wasley said they or future councils didn't want another surprise of this size. Photo: John Borren/SunLive.

Commissioner Bill Wasley wanted to ensure the business case would include “detailed assessment of all the relevant buildings”.

“Whether it's us or some future council, we don't want a surprise of this quantum.”

Dempsey agreed and said the some of the buildings were quite open now so the council would be able to make a good judgment about them and others would need a more invasive assessment.

“Bear in mind we did that on this one [Complex 2] as well.”

Wasley also wanted to ensure the current occupants understood that extra immediate investment in the village may not possible.

“We need to make it clear so there's no myths developed that this is what's happened… because of needing to address this particular situation.”

Commissioner Stephen Selwood asked for assurance that everything had been accounted for in the project.

Historic village manager Blair Graham replied they can see right through the building. A design team and engineers had been through and quantity surveyors were “hammering the contractors”.

“We know everything there is to know about this building.”

The current building contractor Alaska Construction Interiors was reappointed to complete the work. It was expected to be finished by February 2025.

Public Interest Journalism funded through NZ On Air.