THE Department of Conservation has revealed Chateau Tongariro was returned to it “in generally poor condition” by KAH New Zealand, the company which held the lease to run the historic hotel for more than 30 years.
About four months following the departure of KAH and the return of the Chateau to DOC, discussions between the two parties, “in relation to the handover of the building and termination of the lease” are ongoing.
This was stated in DOC’s reply to questions the King Country News lodged under the Official Information Act. The reply, received on Monday from DOC’s acting director of business services, Shan Baththana, added that the lease KAH operated under put a clear obligation on it to keep the building in good condition.
KAH, which closed the Chateau and handed it back to DOC in April, is owned by Malaysian conglomerate Oriental Holdings Ltd.
In February, Oriental Holdings senior vice president, Kevin Peeris, told the New Zealand media an adverse seismic assessment of land on which the Chateau stood, plus uncertainty over the future of the Ruapehu ski fields had been behind the company’s decision to move on.
Property owners generally forfeit any buildings on leasehold land when a lease is terminated, and that was the position KAH apparently accepted. But DOC’s reply to the King Country News’ questions shows it was not entirely happy with the state of the Chateau when it was returned.
DOC also sent the King Country News a copy for the lease KAH operated under, the wording of which seems to confirm the lessee was responsible for upkeep.
A clause read as follows:
5.01 “Throughout the term of the lease, the lessee shall at all times keep and maintain in good and substantial repair and condition all improvements now, or at any time thereafter during the term of this lease, erected, created or made on the land in the leased area to a standard consistent with the authorised use specified in 8.01 [which says the building can only be used as a tourist hotel].”
Furthermore, according to the lease document, DOC would seem to have redress should a dispute arise between the parties.
Section 11 of the lease said:
“In addition to the rent and other moneys reserved by this lease, the lessee shall pay . . . All costs, charges and expenses for which the lessor shall reasonably become liable, in consequence of, or in connection with, any breach or default by the lessee in the performance, observation of any of the terms, covenants and conditions of this lease and the enforcement thereof.”
King Country News asked DOC whether it had been responsible to check on KAH’s performance in maintaining the Chateau, and whether DOC was satisfied that this was done adequately?
Shan said unlike most tenancy agreements, which put the balance of responsibility on landlords to keep buildings in good repair for their tenants, the lease agreement put a clear obligation on KAH, as owners of the improvements, to keep them in good condition.
“The maintenance programme was a business decision for the owners and the department was relatively limited in what it could demand.
“Contemporary lease agreements are not structured in the way the KAH one was in 1991,” Shan said.
Yesterday, the King Country News reached out to both parties for further comment, but none had been received as this edition went to press.
Wide interest in Chateau despite quake risk
The Department of Conservation has received 15 inquiries from parties interested in taking over the lease of the Chateau Tongariro, but whether the historic building needs earthquake strengthening remains unknown.
In reply to an Official Information Act request from King Country News, DOC said it had a seismic report on the state of the building but would not release it at this stage. However, the report would soon be posted on DOC’s website.
The previous lease holder, KAH New Zealand, owned by Bayview International Hotels and Resorts, closed the building and terminated its lease in April, citing an adverse seismic report among its reasons.
“The most recent seismic assessment found that underground shifts over time have meant some of the hotel infrastructure no longer meets current safety standards,” said Bayview International Hotels and Resorts senior vice president, Kevin Peeris
“To ensure the safety of everyone at the hotel the decision was made to close the property,” Kevin said.
But fears of possiblE earthquake strengthening costs do not seem to have put off those interested in running the historic hotel.
The acting director of DOC’s business services department, Shan Baththana, has confirmed wide interest in the building “from a range of individuals”. She would not say how many of these were from within New Zealand, how many from overseas, or whether any represented iwi investors.
“Once we have determined what the long-term future for the property could be, we will be in a better position to respond to any suggestions or proposals for its use,” Shan said.
“DOC is keenly aware the Chateau is an iconic heritage building sitting at the gateway to the Tongariro National Park, which itself has Dual World Heritage for its natural and cultural heritage.
“We are committed to working with iwi and a range of stakeholders on these issues.”
Shan confirmed KAH New Zealand had removed many paintings and furnishings from the building.
“All chattels within the building were the property of KAH NZ who purchased these items when they took over the lease on the building in 1991 from Tourist Hotel Corporate Ltd.
The department is not aware of all assets owned by KAH NZ but can confirm a large number were left in the building at the end of the lease, including a range of paintings, building fittings, and furniture.”
