The City of Melbourne might not have the property portfolio or cash reserves that lord mayor Clover Moore has built up at the City of Sydney, but today we’ve agreed to commit $76 million to purchasing a strategic 6462-square-metre site adjacent to the historic Queen Victoria Market. Lord mayor Robert Doyle announced the move to Jon Faine on 774 ABC Radio Melbourne this morning (here’s the official statement).
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Melbourne has one of the world’s biggest and oldest markets, and with this latest acquisition, the overall land footprint of QVM expands to about eight hectares on the north-west corner of the CBD. However, pulling together a roughly $200 million renewal program is no easy feat when juggling complications such as heritage protection and the fact QVM is built on top of Melbourne’s first cemetery. There’s also the pivotal question of not disrupting the businesses and livelihoods of 750 traders during the renewal process.
As chair of Melbourne City Council’s finance and governance committee, I drive councillors and officers mad with an obsessive pro-disclosure approach to transparency in decision-making. The result is that everyone can see what the council is doing. For instance, the state government agreed to vend in some of its land at the southern end of the market to effectively help finance the biggest project in council’s history. The full legal contract with the state, including all the obligations council has taken on, is available here on our website.
As part of this deal with Spring Street, council promised to convert the existing ugly 710 asphalt car park covering the cemetery into an attractive open space, potentially like Federation Square next to Flinders Street Station. But where do all the traders and customers park their cars? The original concept was to spend an estimated $55 million building an underground car park below sheds A, B and C at the northern end of the market, away from the cemetery. However, there was a big backlash from traders about this, who were rightly concerned about all the disruption.
As part of the transparency push, anyone can ask questions or make written and oral submissions on specific items of business at City of Melbourne’s committee meetings. The full audio of these debates are then made available on the council’s website. The committee meeting on August 12 this year became a key event as this report was tabled and debated so that we could effectively disclose and endorse some of the key terms of the land-transfer agreement with the state government.
Over one hour and 16 minutes of debate on August 12, trader concerns about the underground car park became crystal clear. The Age then broke the story on September 3 that Robert Munro, 87, had listed his strategic 6462-square-metre site next to the QVM for sale, with an asking price of at least $60 million. The Munro family had owned the site for 103 years and it was originally a factory that manufactured springs for bedding, but is now best known for the Mercat Cross Hotel.
The council swung into action and resolved that we would be a bidder, as this would potentially allow a development that accommodated 400 car parks and would obviate the need to do the full $55 million underground alternative. However, there was also the key question of future planning controls, something the council could influence but that ultimately the state Planning Minister would determine.
The current planning regulations are quite restrictive on the Munro site, so it would have been a dreadful look if the council bought the site and then lifted the 20-metre discretionary height control or weakened existing heritage protections. That’s why we confidentially endorsed and then publicly released the site-specific concept plans on October 1 to enable all bidders access to the same information.
Selling agent Savills refused our request to extend the expression of interest deadline beyond October 8 so that all bidders would have enough time to assess what these concept plans meant, as was explained in The Age. Our $76 million bid, based on an independent assessment of “fair market value”, was endorsed at a confidential council meeting on October 7 and, importantly, we agreed to publicly disclose the key terms of our bid after the event, even if we lost.
Savills wrote to the council last week saying we weren’t the highest bidder, inviting a higher offer. We stuck to all of our terms, including a delayed July 1 settlement and a commitment to recognise the Munro family with any future development. Lo and behold, the family rejected higher offshore bids and went with the council offer. Good on them for putting the council, the traders and the community ahead of a few extra million.
* Stephen Mayne is a Melbourne City councillor.