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The costs of strengthening and redeveloping Wellington Town hall could nearly double as Wellington City Council announced a massive budget blow-out on the project.
The council said the $182 million project could cost an additional $70m-$147m to complete.
Mayor Tory Whanau said news of the blow-out was "extremely tough to hear, but not unexpected".
"We are dealing with challenging economic conditions - but we are more than half-way through the project, which was started by a previous council. There's no way we can turn back. We must see it through to completion.
"However, I join Wellingtonians at being frustrated and annoyed at the news of another cost increase."
The gutted town hall in 2017. Photo: Wellington City Council
The 120-year-old building has been closed since 2013, after being deemed earthquake-prone in 2009. It is a Category 1 Heritage NZ building, on reclaimed land.
Cost estimates to redevelop the site have risen from an initial $32m to $145m, when work started in 2019.
In May last year, the council announced that ballooning material and shipping costs, made worse by the pandemic, would lift the budget by another $37m.
Today, Whanau said potential risks identified by engineers, architects and the main contractors had become a reality.
"The Town Hall is an old, fragile, complicated heritage building built on reclaimed land - and the project team keep encountering new structural and ground conditions that are significantly impacting costs."
In a briefing on the project, councillors were told that the building's heritage listing and consenting constraints meant it was not an option to halt the project or demolish it.
They were told leaving the building in its current state would be a breach of the Building Act and a "start to finish" resource consent meant changing tack was likely to be challenged and would result in hundreds of millions of dollars, already invested, going to waste.
"The community wanted the council to seismically upgrade the building and reopen it as a world-class music venue. It is highly unfortunate that this comes at a considerable cost, but we will have to confront this reality. We can't leave it sitting there unfinished," Whanau said.
Tory Whanau Photo: RNZ / Samuel Rillstone
Only 25 percent of the piling and concrete works in the auditorium were complete.
A council statement said ground conditions had been even worse than expected - including contamination and dewatering - all impacting on the time and costs of the job.
The basement sits below sea level and the ground was found to be considerably more waterlogged than initially thought; the building's condition was also worse than expected.
Wellington City Council chief executive Barbara McKerrow said the council had taken on the risks earlier identified.
"Given the complexity of the contract and soaring building costs over the past few years, no construction company was prepared to take on all of these risks - so the council had to accept it would need to do so. These risks have been realised to a level even greater than had been anticipated."
Wellingtonian Jenny said she thought the costs associated with the project were "insane".
"It is a beautiful building, if it could be finished at a reasonable cost I would love to see it but $300m is just ridiculous," she said.
Another, who did not want to be named, said she felt the council had more pressing priorities than the 120-year-old concert hall.
"I understand that there are people who a new town hall is really important to but all I can think about is the storm water drains under the streets. I think that might be a priority. Sewage systems before stageshows," she said.
Outside the construction site on Wakefield Street, Neville Todd said he felt cost blow-outs were becoming the norm for construction in the capital.
"That's worrying for Wellingtonians isn't it? This whole square here, [the] Michael Fowler building's gotta come, doing the library, it's a huge expense," Todd said.
Todd said he was worried that ratepayers would wind up footing more than their fair share for more crucial long term projects.
McKerrow said underground conditions and previously undiscovered problems with the building's original construction were the main factors in the new costs.
"If you think about a building built in 1903, literally on top of rubble hauled there by horse and cart, the water table is not very far underneath that because Te Ngākau - Civic Square was the harbour in the nineteenth century.
"Our construction company had to pile far more deeply than was anticipated," McKerrow said.
She said she did not believe believe the completion of the Town Hall would prevent the council from addressing failing infrastructure like the city's long neglected pipe network.
"We have already allowed for this particular cost in our modelling so the council does have the financial capacity to continue to invest significantly in the city's infrastructure over the next ten years," she said.
Whanau said she had asked whether mothballing the project was an option, but was told that would cost more than the $182m that was already been spent.
"I'm very frustrated. I don't really want to be spending that amount of money on a building when we have all these other issues but because of the heritage status, because of the consent process and because of the money that we've already spent we're quite limited," Whanau said.
She said she did not blame the previous council that voted unanimously to green-light the project, because it didn't have as much information available.
Outside the construction site in Wellington's Civic Square, Wellingtonian Frederick van der Veoodt was less charitable.
"I think the blow-out is probably symbolic of this council's total mismanagement and incompetence. Just not focusing enough on core services and core requirements. Of course, we as ratepayers, we pay the price for that," van der Veoodt said.
The Wellington Town Hall was now expected to reopen in 2027.