Morrison Square to be demolished

Nelson's Morrison Square is set to be demolished in the new year.

The commercial complex used to house 22 tenants, most of whom have now vacated the building after significant cladding issues caused by water ingress were discovered, making the buildings unsafe.

But the owner of Italian restaurant Babagatto, who has been vocal against vacating the building ahead of the peak summer season, says he'll continue to "fight 'til the end".

Ian Purdy, the portfolio manager property and infrastructure for the Accident Compensation Corporation (ACC)’s Investment Fund – the complex’s owner – confirmed the demolition but added that no decision had yet been made on the site’s future.

“Our contractors are going to make the site safe, works include disconnecting utilities and stripping out internal fit-out where possible.”

Demotion is expected to occur early next year, once Nelson City Council’s moratorium on works in the CBD ceases at the end of January.

As a general rule, the council doesn't permit programmed work in either the Nelson City or Stoke CBDs from 11 December to 29 January to limit negative impacts on traffic and pedestrians during summer.

All retail tenants of the complex, except those in the historic Hardy St buildings which have a different cladding, were vacated by the beginning of December and ACC’s negotiations with office tenants are ongoing.

The corporation has terminated all the leases which it had the right to terminate.

“We regret that we have had to close the centre,” Ian said.

“ACC’s primary concern is the health and safety of tenants and the public. There is no upside for ACC in closing Morrison Square other than it is our duty as a responsible landlord.”

Raf Sirri, owner of Italian restaurant Babagatto, has been fighting to stay in the square over the summer.

“It could help a lot – a little restaurant like us, to not be killed at the beginning of the season.”

In addition to negotiations between his lawyers and the corporation, he commissioned his own report for the complex’s Building B, where his restaurant is located, which found no water ingress into that building’s cladding.

A petition started by Raf seeking to keep his restaurant in Morrison Square until autumn 2025 has been signed by more than 420 people.

However, despite ACC’s original report not investigating Building B, Ian says subsequent testing found “high levels” of moisture ingress and that the corporation remains committed to demolishing the entire complex.

Raf says  he would be “gutted” if the complex was demolished and that it wouldn’t be good for the community.

However, he was “positive” his restaurant will continue, though it might take several months to find a new location and get set up.

“Babagatto will always shine, as always. But yes, we will fight ‘til the end.”

Nelson Mayor Nick Smith described the closure of the centre as yet another “blow” to the central city’s retail and hospitality sectors during their “toughest winter in decades”.

He understands that the decision to demolish the building was because the cost of remediation was greater than the worth of the centre.

ACC purchased the complex, then known as Fashion Island, in 2008 for $22.7 million.

“My first preference would be for ACC to reinvest in this prime site that does have significant potential for both commercial and residential development,” Smith said.

If ACC didn’t plan to reinvest in the site, he would hope for a quick sale to allow for prompt development.

With two key central city council facilities – Civic House and the Elma Turner Library – reaching the end of their life, the council is investigating options for the future of its public buildings.

The possibility of building a brand-new facility which combines council offices, a new library, and community hub into one building on a new site is one of the options being explored.

ACC has previously said it had no plans to sell the site to the private sector, but Smith said it was “too early in the process” for the council, as a public sector organisation, to consider buying the “prime site”.

“That is not a consideration at the moment,” he said.

“Council would be cautious of buying any property in advance of the further work that's required to clarify the costs and benefits of those options.”

He added that he intends to meet with ACC in the new year to advocate for the city.

An engineering report from December 2023 withheld by ACC but acquired by Local Democracy Reporting documented water ingress into Morrison Square’s cladding.

The water is suspected to have increased the rate of the “substantial corrosion” observed in the complex’s galvanised steel battens and screw fixings across Buildings A and C, and the clocktower.

The report recommended that the cladding panels were remediated or replaced within a year otherwise they would pose a health and safety risk.

From December 2023, Purdy said ACC investigated if it was realistic to remediate the buildings without closing the centre.

Once closure had been decided upon, the leases with all tenants were reviewed to understand the corporation’s obligations – not all tenants had the same lease terms – and employment matters for the property manager’s staff also had to be worked through.

Tenants were formally notified on 25 June 2024 that they would have to vacate the square before the end of the year.

The businesses were sent “scrambling” to try and find new locations across Nelson.

Some stores found other locations to re-open around the city, but many others have since closed permanently.