Sarjeant Gallery costs jump $20m; ratepayers’ contribution revealed

Whanganui ratepayers will pay 27.5 percent of the cost of redeveloping Te Whare o Rehua Sarjeant Gallery.

With the redevelopment about a month away from completion, the final cost is expected to come in at between $73.5 and $74.2 million.

It has bumped up another $2m since the end of June. The forecast is now $18.4m above the budget of approimately $55m excluding GST, from the time contracts were awarded in 2019.

The historic white-stone gallery and its contrasting new black-granite wing is due to be completed on 24 October and will open on 9 November.

A report to Whanganui District Council's Operations and Performance Committee from project director Gaye Batty said ratepayers would chip in about $20m (27.5 percent), with 57.6 percent coming from government grants and 14.8 percent from interest earned and fundraising, community grants and donations.

Batty said the redevelopment had offered up complex challenges and "some unusual surprises" along the way.

"If you consider the restoration of a fragile heritage building sitting on sandy ground, add in a massive archaeological excavation on the adjacent site and a change of material and design for the new building façade - then throw in a global pandemic, with its impacts on the construction industry, supply chain issues and insurance costs, you start to have some idea of the complex task this has been."

Most cost increases were because of additional heritage restoration work including extra earthquake strengthening and heritage plastering ($5.49m), delays directly related to COVID-19 ($2.72m), and unforeseen ground conditions ($1.72m).

Cost increases due to rising trade costs added $1.88m. Quantity surveyor RLB said if the project was retendered today, the price could be $12.3m higher because market prices had escalated 10 percent above the original forecast.

Additional archaeology work added a further $1.1m to the budget blowout, extra landscaping on the eastern driveway cost $0.94m, and higher insurance costs added $0.93m.

"Scope creep" put on $520,000 for digital and audio-visual technology "to future-proof the gallery" and an unplanned $570,000 to fit out the gallery cafē.

When expressions of interest were sought for an operator to run the cafē, the operator was required to pay for the fit-out. In early September, after potential operators pulled out, the council took on responsibility for the cafē.

Signing off $271,336 of unbudgeted funding to finance the first year of cafē operations, the council will own the cafē and hire a contractor to run it. The $570,000 fit-out costs are now included in the project's unbudgeted capital expenditure.

Council general manager community, property and places Sarah O'Hagan said the redevelopment had been done in an incredibly difficult period in time, socially and economically.

"At the same time it has contributed to the local community, with $16.6m of the construction costs going directly to local sub-contractors."

O'Hagan said a full evaluation of the project would take place in early 2025 and would be reported to the Operations and Performance Committee in the first half of the calendar year.

LDR is local body journalism co-funded by RNZ and NZ On Air.