Diocesan Property Update – July 2015

1 July 2015

The Cathedral Announcement:

On May 28th 2015, Bishop Barry Jones announced his plan for the future of the Cathedral of the Blessed Sacrament. The significance of the timing of this announcement is that it marks the conclusion of over 4 years of extensive testing, modelling and reviewing of the options for all damaged, demolished or earthquake prone buildings across the entire Diocese.

The recovery plan for the Diocese is a single plan that includes the needs of all parishes as well as the Cathedral and the rebuild programme could not commence until a view on the way forward for each parish had been resolved. By announcing the future of the Cathedral it is now possible to discuss the plans for all parishes.

 

The Insurance Pool and cost of rebuild, repair and strengthening

At the core of the plan is the financial model. What we know is that the money received from insurance for our churches was $73m. We also know that the costs of undertaking all the required works are significantly higher, with the original estimates identifying more than $200m.

These estimates were based on the detailed engineering assessments that have taken 4 years to complete and upon assumptions around the timing and prioritisation of repairs as well as the level of strengthening requirements. The original model did not take into account fund raising or sale of assets.

A lot has been learned in those 4 years, particularly about the performance of buildings during seismic events. At the same time, new technologies and materials are making possible solutions that were not available in the past.   We now know that we are required to repair or strengthen all of our buildings to a minimum of 34% of the New Building Standards (NBS) and that in general we have a maximum of 15 years (high risk zone) to complete these works unless for a heritage building where we may apply for an extension up to a maximum of 25 years.

These facts have been added to the model to update many of the assumptions previously made.

Developing criteria for prioritising the required work was part of the recovery plan. The direction taken has been to focus, where possible, to get parishioners back into their churches where they are currently closed, to get underway with the planning for new churches where they have been demolished and finally to undertake strengthening and repairs where churches are still in service with priority given to those assessed as earthquake prone.

Unfortunately this means buildings that have suffered damage but are not earthquake prone are likely to take longer to be included for repair, especially if work is predominantly cosmetic. It also means churches that meet building code are unlikely to require any further strengthening.

In looking at churches that are closed or demolished, the highest priority has been given to those where no suitable alternative facilities exist or where any alternative is less than capable of fulfilling requirements.

A view has been taken on heritage churches to take advantage of the additional time available for work to be completed. An approach to undertaking repairs in defined stages has been developed with the aim to remove any critical issues with the building in the first phase and to get the church re-opened as soon as practically possible. The following stages will be completed within the total timeframe allowed but importantly allows for a programme of fundraising to commence and ease the strain on limited resources. This way, more projects can be started sooner than previously planned.

A similar approach is now being looked at for some of the non-heritage churches in Christchurch to expedite re-occupation, some of these however will only be temporary repairs whilst more permanent outcomes are considered.

Included within the new model are assumptions around sale of assets and fund raising. Each parish will be unique in both opportunities and requirements and more details will be discussed at the appropriate time.  However, broadly speaking, most parishes will be set a target of fundraising at least 1/3rd of the cost of the works to be completed, with 1/3rd coming from the pooled insurance funds and the final 1/3rd coming from sale of assets, funding grants and stretched fund raising targets.

In all cases, the Diocese will have to underwrite any shortfall so that projects can start before all the money has been raised. It is anticipated that fund raising will occur over a period of 10 years or more.

Perhaps a timely reminder that a significant proportion of the costs are for strengthening works to our buildings for which no money whatsoever was paid out in insurance. This risk is being met through the pooling of all insurance receipts for the common good as agreed between the Bishop and his Parish Priests.