Red zone owner slams payout offer | Canterbury News | Local News in Canterbury

Retirement village owner Grant Buchanan has slammed the Government's plan to extend its financial package to retirement villages in the red zone.

Last week, the Government announced retirement villages would finally be eligible for the Government's red zone package based on the September 2007 rateable value.

But Mr Buchanan, who owns Avonview Retirement Village in Dallington, said this still won't be enough.

The rateable value for his 10 retirement villas was $1.76 million, while the amount Mr Buchanan was liable to pay the residents was $2.68 million. That left a deficit of $920,000 which may potentially have to come out of the Buchanans' pocket.

The $2.68 million was not what residents had originally paid for the villas, but what was left after fees from the years they had lived there had been deducted.

Mr Buchanan was highly disappointed with the "unrealistic" offer.

"The rateable value has far less meaning for a business; commercial buildings are not rated in the same way as with domestic. It's not relevant. We understand fully the issues Mr Brownlee and his staff have been facing. All we asked them to do was to treat us as a one-off entity and negotiate. Our circumstances are very unique - we are the only operating retirement village which has been red zoned."

But Canterbury Recover Authority chief executive Roger Sutton said the Government had bent over backwards to help retirement villages in the red zone. 

"These facilities are commercial entities. However, Avonview has repeatedly requested to be considered as a residential facility to be eligible for the Red Zone offer that other residential properties have been offered. The Government has now done so, and as at January 27 it was made public that owners of rest homes and retirement villages will be eligible for the same offer as the residential properties."

No other commercial businesses have been given the Red Zone offer.

"The owners of Avonview now say they are not happy with the outcome.  They appear to want to be treated differently to the other 6594 red Zone properties - despite demanding to be given the offer in the first place."

Mr Sutton said it was a time of great hardship for many people across Christchurch and that there was much frustration at the situation the September and February earthquakes have caused.

"We acknowledge that and we are trying to do the best we can for the people of this city in a way that is fair. And I do note that the Red Zone offer made to Avonview will enable it to finally pay out its residents."

However, Mr Buchanan believed the Government had only offered them the red zone package after he had threatened to take them to the High Court.

"The Government are beating their chests and saying look what a great offer we've made but it's rubbish. They have a responsibility to these people who are, by definition, the city's most vulnerable. We were told in June that we had to shut the place down and force the residents to leave. It wasn't us that wanted to do that; we would have kept going. It was a Government decision.

"Of course we also have a responsibility, but we're doing the best we can to keep our residents in the loop. We have a very close relationship with the residents and it's not us that they are getting upset with. We will honour our obligations," he said.

Mr Buchanan said he could not say what the final payouts to his residents would be.

"It's very complex. Ultimately, the settlement will come from both EQC and the insurance company. If the insurance company writes off the villas then that will result in a different outcome. But we're going to keep fighting and get the best for our residents that we can."

Whatever the result, Mr Buchanan said he and his wife would be facing personal financial difficulties. Their home, nearby to Avonview, had also been destroyed in the earthquake.

"They haven't compensated me market value for the business. How are you supposed to reopen after two years of being closed? I'm not sure. It seems to be that if you're not in the CBD the Government don't care about you."