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Christchurch City Council to receive $635 million post-earthquake insurance settlement
Christchurch City Council is to receive a global settlement of $635 million from its insurers for all its facilities damaged in the 2010/11 Canterbury earthquakes, including Lancaster Park (the former AMI Stadium).
The Council had lodged insurance claims worth $920 million for its above-ground assets, but settled with LAPP (the Local Authority Protection Programme Disaster Fund) and Civic Assurance’s principal reinsurers, – for a lesser, but still record, amount to avoid time-consuming and costly court action.
The settlement of $635 million follows complex and challenging negotiations which took several months to complete. They involved not just the Council’s insurer LAPP, but also Civic Assurance and Civic Assurance’s three main reinsurers.
It is a global settlement for all of the Council’s 1,600 or so individual above-ground asset claims and business interruption losses.
The agreed amount of $635 million is in addition to the $201 million paid by LAPP to Christchurch City Council for damage to the Council’s below-ground assets in 2012 and a Settlement with the Earthquake Commission of $59.4 million (after excess was deducted).
Peter Gudsell, the Council's Chief Financial Officer, said the Council was delighted to have reached a conditional settlement, stating “the actual settlement will take place in February when the Council is to receive payment in full.
“Achieving agreement means the Council will not be reliant upon progress payments from the insurer as and when agreed reinstatement work is undertaken.
“This gives Council far greater flexibility and certainty in terms of what and when assets can be repaired or replaced."
Christchurch Mayor Lianne Dalziel said the insurance settlement was great news for the city going into the Christmas break, adding “knowing our full and final insurance settlement gives us certainty as we begin work on our 2016/17 Annual Plan. It is an enormous relief."
The settlement covered Lancaster Park, one of the biggest claims, which the Council had insured for $143 million.
During negotiations, Civic Assurance had disputed that the venue was damaged beyond repair, at one time suggesting that it could be repaired for less than $50 million.
Council can now consider repairing the stadium and/or advancing its plans for a new venue closer to the city centre.
Canterbury Rugby Football Union Chief Executive Hamish Riach hoped the settlement would make the stadium issue more of a priority in the city's rebuild.
Riach told Fairfax media “we hope that that conversation can now be held in a thoughtful, planned way rather than pushing the stadium to the depths of the pond because it's somehow seen as being frivolous."
Riach explained that the union remained open to either a repaired Lancaster Park or a new arena.
Other post-earthquake settlements have seen the Arts Centre settle its insurance claims across all its buildings for $163 million. The bulk of its claim was with Ansvar New Zealand (now ACS Ltd), which paid out $156 million. The final $6.75 million was settled with Lumley Insurance in late 2012.
Images: Liquefaction at Lancaster Park after the February 2011 earthquake (top) and Lancaster Park in use as AMI Stadium prior to the earthquakes (below).
3rd December 2015 - CALLS FOR BUILDING OF NEW CHRISTCHURCH CONVENTION CENTRE TO BE EXPEDITED
12th June 2015 - GO AHEAD FOR $127.5 MILLION RESTORATION OF CHRISTCHURCH TOWN HALL
27th April 2015 - RUGBY UNION OPEN TO LANCASTER PARK RETURN
4th November 2014 - CHRISTCHURCH’S TEMPORARY AMI STADIUM SET FOR LONGER LIFE
4th March 2014 - CHRISTCHURCH ADVANCES PLANS FOR POST-EARTHQUAKE SPORTS HUB
29th October 2012 - CHRISTCHURCH CITY COUNCIL COMMITTED TO NEW CBD STADIUM
11th April 2011 - VBASE’S PLANS TO BRING CHRISTCHURCH VENUES ‘BACK TO LIFE’
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