The demolition of the historic Auckland building the Palace Hotel.

The demolition of the historic Auckland building the Palace Hotel.

The demolition of the historic Auckland building the Palace Hotel.

The demolition of the historic Auckland building the Palace Hotel.

The demolition of the historic Auckland building the Palace Hotel.

The demolition of the historic Auckland building the Palace Hotel.

The demolition of the historic Auckland building the Palace Hotel.

A historic central Auckland building that began falling apart yesterday afternoon has been demolished overnight on safety grounds.

Cracks were seen yesterday on the 124-year-old Palace Hotel opposite the Sky Tower on Victoria Street, which was undergoing renovation work to transform it into a "massage" club.

Just before the machinery went in early this morning, Auckland Mayor Len Brown said they had not choice but to knock it over before it fell into the street.

PHIL DOYLE DEMOLISHED: The Palace Hotel, on the corner of Victoria and Federal Streets.

"It is pivoting on its base and it is moving at a consistent rate, the movement has not stopped," he told reporters.

"We need - and have made - the decision that it has to come down on the basis that we cannot guarantee the safety of anyone who went into the building, if there were attempts to shore it up."

Contractors had told the council they could not go in.

"We cannot leave it in its present state because if it continues to move at the present rate, it will reach a point where it falls."

This would damage neighbouring buildings.

"It could be a danger to life and limb and we do not want this building as a public safety issue."

Council heritage adviser George Farrant said there was no option.

"It is clearly a failure at basement level, it is in a position where it is simply not safe to go in there to try and brace it, it cannot be done from outside."

He did not know what had caused the basement failure.

"The retaining wall is simply folding under the weight."

Auckland Council chief executive Doug McKay said last night the building was still moving even before demolition.

"It is moving rapidly and we have made the decision to demolish it in the interest of public safety.

"After a very long deliberation taking expert opinion and expert independent engineering advice and consulting the Historical Places Trust, we have decided to take it down," McKay said.

A member of the public spotted the cracks in the Palace Hotel, some up to a metre long.

Police quickly cordoned off Victoria Street West at around 4pm and some nearby buildings were evacuated.

The original building, built in 1886, appeared to be sound but the cracks were in two annexes, added in 1889 and 1912.

Both those annexes were showing signs of serious cracking.

Wellington brothel owners John and Michael Chow bought the building for $3.3 million to convert it into a brothel which would stand opposite the Sky Tower.

The Chow brothers own a string of Wellington brothels including Il Bordello and Splash Club, as well as the Mermaid strip club.

The sale caused concern amongst local business owners, who were worried it would turn the area into a red light district.

Michael Chow said he was shocked he and his brother weren't consulted about the Palace's demolition.

He said the building was insured but he is not sure of the site's future.

"I spent three years working on the site and it came down within an hour," he told Radio New Zealand.

He says it would take a couple of days to digest what had happened.

- with NZPA