However, whether there is a challenge to the Hydro Grand’s historic status remains to be seen, while a construction timeframe could yet hinge on apartment pre-sales and interest in commercial leases.
The multi-phase project, of three separate but linked buildings, includes 32 apartments on five floors, a hotel with 68 rooms and ground and first-floor food and beverage outlets, but not all built at the same time.
South Canterbury businessmen Allan Booth and rich-lister Alan Pye, of Bayhill Developments, have applied for resource consent for a mixed use office, apartment, retail and hotel complex at 10 The Bay Hill, in Timaru.
Mr Booth said in an interview that subject to gaining resource consent from a hearing in October, he would move to demolish the Hydro Grand at the end of this year.
However, he noted that before the three-stage development went ahead, there would have to be "sufficient" apartment sales and commercial leases in place "which would dictate the timing [of construction]".
The Hydro Grand was registered with the Historic New Zealand’s predecessor as a Category 2 listed building in 1983 and Mr Booth did not rule out a challenge to demolishing the 102-year-old building.
"[While] we have done our homework, we’ll just have to wait and see," he said.
He said the Hydro Grand had been derelict and unoccupied for the past decade.
While he had considered refurbishment options to meet earthquake and safety standards, it would have been uneconomic.
Full-compliance strengthening was estimated to cost "a minimum" of more than $15million.
"I had a pretty open mind about all the possibilities for the site, but it soon became quite clear that any thought of retention and refurbishment of the old Hydro would be an expensive and futile exercise," Mr Booth said.
He purchased three neighbouring sites in 2013, after an earlier hotel proposal did not materialise.
He said a report by architects Salmond Reed found the cost of retaining, then adapting, the existing building to meet required standards could not achieve a commercial return on the investment.
Mr Booth said the project was being funded solely by him and Mr Pye.
● Mr Pye’s family fortune rose from $200million last year to $350million.
Ranked 38th out of 190 on this year’s NBR rich list, the Pye group supplies supermarkets and food processors with vegetables, and it also owns at least seven dairy operations.
