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Developers eye super-brothel for Palace Hotel site

By NICHOLAS JONES - The New Zealand Herald | 5:30AM - Wednesday, April 06, 2011


An artist's impression of the 10-storey
‘entertainment and hospitality centre’.

DEVELOPERS Michael and John Chow are planning to build a 10-storey super-brothel on the prime inner-city site once occupied by the historic Palace Hotel.

The "entertainment and hospitality centre" will have underground parking, a restaurant and bars and a rooftop swimming pool, as well as a "gentlemen's club".

Following a deal with the publishers of Penthouse Magazine, two floors of the building will be occupied by a Penthouse Club — where adult performances by models will "bring the magazine to life".

The Chow Group have secured the Australasian rights to operate Penthouse Clubs, and the new Auckland club would be the first in the Asia-Pacific region.

However, Auckland Council spokesman Glyn Walters said no consent applications had been received for the new building's construction.

A $200,000 bill the council sent to the Chows for the demolition of the Palace Hotel, located opposite SkyCity Casino, remains unpaid.

Yesterday, Chow Group lawyer Max Tait refused to comment on the non-payment. As a rule the council does not issue consents to applicants who owe them money.

The council is still considering legal action against the Chows after an engineering report revealed the renovations they carried out on the 124-year-old hotel severely damaged it.

The building became a safety risk after it began cracking and moving last November, and was torn down on the orders of Mayor Len Brown.

The Chows had been converting the 1886 building into a brothel, and initially threatened legal action against the council for demolishing the building. However, engineers found the hotel's weakness was caused by its basement walls not being adequately supported during the renovations.

Mr Walters said the new building's application could require public or limited notification.

"This will require a submission period, hearings and a decision. And any conditions required will be made by a hearings panel."

Neither of the Chow brothers returned the Herald's calls yesterday, but in a statement John Chow said the new venue would cater to "everyone who grew up with the world-famous Penthouse brand".

"The Palace Hotel was an important site. It was sad to see it torn down, but the new development will be better than ever."

If the development does gain council approval it is expected to be completed by early 2013.

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10717403


The Bordello Brothers

Weekend Herald | 5:30AM - Saturday, April 09, 2011


Brothers John (left) and Michael Chow are hoping to bring their successful sex industry
business to the site of the old Palace Hotel in Auckland. — Photo: Paul Estcourt.

LOOK OUT, Auckland — the Chows have arrived.

With their black suits, broad shoulders, BMWs and Mercedes and extensive background in Wellington's red light district, the Kwasian sex industry magnates are out to make their mark.

In Auckland on Thursday to advance plans for the city's first high-rise brothel — directly opposite SkyCity, an area increasingly popular with the prostitution business — sex trade entrepreneurs John and Michael Chow emphasise the property investment aspects of their business and how their 10-level adult entertainment club will have a 60 per cent international visitor target.

Older brother John flicks his hair back, speaking with a strong Hong Kong accent in truncated sentences, checking his iphone, telling how he was just 14 when he arrived from Hong Kong. Michael, bald, has more of a Kiwi accent, quick humour and tells how he was 8 when he arrived.

Speaking from Albert Street's expensive Stamford Plaza where they stay, and hold meetings in the lobby foyer, John Chow holds a thick folder of plans for the empty Palace Hotel site where a quantity surveyor has been engaged, along with experienced town planner Martin Green, to take care of their resource consent application for the new adult entertainment venue.

John Chow tells how they have also engaged defence lawyer Bruce Gray QC to work on litigation against Auckland Council over what he claims was the Palace's illegal demolition — the council said it was necessary to protect the public.

The Chows were converting their $3.3 million historic 1886 building into a brothel ready for the Rugby World Cup when engineers discovered cracks attributed to basement walls not being adequately supported during the renovations.

The council's chief executive, Doug McKay, says the owners were consulted but John Chow becomes animated and agitated when talking about the demolition and denies being told in advance: "Just like, someone come to my house and slap my mum and I've got to shut my mouth? I can't do that. I don't want to cause any trouble but the thing is, I've been put in a corner. What should I do? I spent the money, I've got property, I follow the process with the bill-paying and all the consultants and is someone taking advantage of me? I can't just let someone step over me."

The council defends its actions, and sent a $200,000 bill which remains in dispute. Yet now the Chows want the same authority to give them consent. John Chow simply cannot get over the demolition.

"We have been working on this since February and it will be a two-year project, looking at opening in 2013. I bought a property, I want to do a refurbishment — whether it's a brothel or other business like a restaurant. I engage a professional consultant to do the work, got the written consent, meeting with Historic Places Trust, everyone's happy and on 17 November the building got cracked."

"Wouldn't you expect the council to consult you? But within hours they make a decision. I come to your house, I demolish your house and send you $200,000 bill. How you feel? How you feel? Honest?" he demands, leaning forward, waiting, wide-eyed, questioning.

"It's quite amazing to me when someone demolish your building without your consent. I understand the council has health and safety reasons. No one was in the building next door so there's no health or safety issue," John Chow says, getting more heated as he takes the story from one step to the next.

Chow denies wanting any media profile but wants to establish Auckland business connections.

"Whether it's property or the other businesses, if I only come up here once a month, I won't be able to build a network. At least people know us, 'that's the Chow brothers', whether it's property or a brothel or a restaurant, it doesn't matter, at least people will know who we are."

One manager has criticised the Chows' brothel business, claiming girls aged just 18 to 21 are rostered on 17-hour shifts, charged for towels, linen, ads, marketing plus a $400 administration fee. The girls also pay for their own lubricants and condoms. Customers pay around $220 an hour and the women get $100-$120 of that.

John Chow says Chow Group has 80-100 employees plus 200 contractors, referring to their Exodus Health & Fitness Club, run by a sister, and the brothels.

Via group lawyer Max Tait, John Chow has demanded to see this article pre-publication — which the Herald refused — but before speaking, he says it has to be in his interests and refers to unflattering Wellington publicity. A Dominion Post December 18 feature was headlined ‘No, not the Brothel Brothers’. Chow demands to know what headline will appear on this article.

Asked about the Palace plans, Chow says the adult entertainment business has higher margins, comparing that to the fast-food business. He explains how the sex business is not one they entered intentionally but how their first venture was in 1997 when they took over their folks' Tong Shan Takeaways, renaming it J & M Fast Foods, then doubling the business by keeping it open 24 hours and working in shifts.

A year later, they paid $1 million for the vacant former ANZ building in Courtenay Place, initially planning a hotel and opening another fast-food place; then the heavily mortgaged brothers were forced to sell a Lower Hutt family home and shift into the building. Michael Chow decided to cold-call strip clubs, eventually linking up with Auckland's Mermaid Bar which expressed an interest. The result was the brothers' leap into the sex industry.

Chow Group says: "For a couple of Naenae boys whose family migrated from Hong Kong to Wellington in 1984, it has been quite a ride." Asked about that experience, John Chow says "I'm the same as any immigrant. I came here when I was 14. I'm 40 now. Same as anyone, going to a strange area: once you settle down it becomes normal."

Michael Chow remembers being one of only about two Chinese New Zealanders at the college but laughs at the idea of bullies.

Asked about racism or being hassled, John smiles: "We are quite big actually [for] Chinese. Of course you've got bullies in the school but I'm the second-tallest in the class, so the bully only picks on smaller ones."

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10718042




Lack of remorse over lost building rankles

Brian Rudman on Auckland

The New Zealand Herald | 5:30AM - Wednesday, April 13, 2011


The Palace Hotel in Victoria Street was demolished after excavations damaged
the building irreversibly. — Photo: Dean Purcell.

LAST MONTH month the Western Australian government dramatically increased penalties for people illegally demolishing or damaging heritage-listed buildings.

Not only was the maximum fine increased to $1 million but, crucially, a 10-year development moratorium and a restoration order could be imposed on the affected site.

The changes were announced a few weeks before the Wellington-based Chow brothers announced plans to replace the heritage-listed Palace Hotel (which suddenly began to collapse during renovations last November) with a 10-level glass box.

You can't help wondering if the venerable old building in inner-city Victoria Street might still be standing if such legislation was in force here.

It's the lack of remorse of the Chow brother brothel-owners that really rankles. They breeze into Auckland from their Wellington base, buy up one of the city's few remaining Victorian, street-corner brick pub buildings and then, under their watch, it suddenly starts to crack and slump.

To protect surrounding properties, Auckland Council had to hastily demolish the 124-year old building. What do the Chow brothers do? They come out all guns blazing.

It's all the council's fault. Not a word of apology. Just threats of litigation against the council and rejection of the $200,000 bill the city has presented as the cost of demolition.

The closest to contrition I have seen was a written statement last week announcing the redevelopment plans and concluding "it was sad to see it torn down but the new development will be better than ever".

In Saturday's Weekend Herald, John Chow complained of lack of consultation on the fateful night of November 17.

"Within hours they make a decision. I come to your house, I demolish your house and send you $200,000 bill. How you feel. How you feel. Honest."

Well, this Aucklander says, "You come to my city, you excavate under a loved heritage building until it starts to crumble. My council has to knock it down. How do I feel? I feel angry."

Mr Chow argued that because there was no one in the building next door "there's no health and safety issue".

The devastation caused in Christchurch by old masonry buildings falling against each other shows what nonsense he talks.

As for being sent a bill for the demolition work, I too might have felt sick if I was in his shoes. But sick at being the custodian of a heritage building that collapsed because of excavations being conducted under my watch.

Council chief executive Doug McKay, who led the on-site crisis team, said at the time that the building had continued to move towards the road all evening — "windows were spontaneously cracking and the building was in danger of imminent collapse".

A passerby who leaned against the wall as it first moved said: "The walls were cracking like an eggshell."

Last month's report to the council by three leading engineering firms concluded the damage was "widespread, severe and irrecoverable".

They concluded the collapse of the Palace Hotel was caused by the basement floors not being adequately supported, by the removal of the timber floor, by the removal of the concrete basement floor "designated to be retained in the approved plans" and by over-excavation of the foundations.

This report has been before the Crown Solicitor for a month, seeking advice on possible prosecution. The Chows' response is to threaten court action against the council over "illegal demolition".

They've also found time to produce plans for a 10-level glass-fronted "super brothel" to replace the boutique brothel originally planned for the old pub. How do I feel about that? Angry.

Not because of the business planned. Prostitution is legal. Angry at the senseless loss of a heritage building and at the huge windfall gain the property owners stand to pocket as a result of the Palace Hotel demolition.

As a listed building, development on the site had been constrained by the existing structure. But as an empty site, the proposed 10-level glass box is within planning rules.

It seems likely the final act of the blame game will be carried out in court, with judges having to decide who was responsible for the "over-excavation" that made the situation "irrecoverable".

But for Auckland the result is already final. Another inner-city heritage building has hit the dust.

Back in 1992, the Clutha District Council took advantage of the shiny new Resource Management Act to prosecute a developer for destroying part of the Benhar Hoffman kiln. The perpetrators were fined $56,500 and also ordered to rebuild what they'd knocked down.

Whether that is a precedent in this case is unclear. As is the place of replicas, except as a disciplinary tool against errant developers.

What would concentrate the mind of developers, though, is the 10-year redevelopment moratorium on the affected site that is now law in Western Australia.

That would hurt developers in their most tender spot — their pockets.

http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10718837