[+] City of Melbourne Divests Properties, Delays Projects

The City of Melbourne will sell off four of its properties as the council grapples with a $19.5-million hole in its budget at the end of the third quarter. 

It’s $10 million more than the forecasted budget deficit for the quarter thanks to the impact of Covid-19 continuing to plague the city’s revenue streams. 

Labour shortages and supply chain issues, along with a $22.8-million shortfall in parking revenue driven by Covid-19 restrictions, are biting into the city’s capital works program.

The council has significantly underspent against its budgeted projects with a report indicating 10 per cent of capital works projects were now off track. 

At a council meeting this week a plan to divest four disused community assets was endorsed. The plan will now go to public consultation in July. 

The properties slated for sale are 47-49 Canning Street at Carlton, 100-104 A’Beckett Street in Melbourne, 30-38 Gatehouse Drive at Kensington and 505-513 Abbotsford Street in North Melbourne.

Greens councillor Rohan Leppert said the four buildings had been replaced by facilities acquired or developed close by.

“My default position is to never, ever, ever sell public land but these are surplus to requirements,” Leppert said. 

“I just really want to emphasise that behind this report there are many years of consideration of what we’re acquiring and why, and we’ve thoroughly exhausted what we can do with these sites.”

According to a City of Melbourne report, the four properties are currently underutilised and no longer being used for council services, while some had declined with age and do not warrant the expenditure to retain the asset.

▲ The City of Melbourne has voted to sell four disused assets, including the recently completed Lady Huntingfield Childrens and Family Services Centre.

A council officer said that subject to community consultation, three of the four properties had been earmarked for potential affordable housing, but provisions would need to be made for rezoning to enable this. 

The City of Melbourne is forecasting an underlying deficit of $36.9 million attributed to the long-lasting impacts of covid outbreaks on the economy of the city. 

Lord Mayor Sally Capp said they had not anticipated the long-tail effect of Covid on this financial year.

“The difficult environment in which we and many other organisations are operating has been noted,” Capp said. 

“I do acknowledge the impact on our capital works and many of our major projects but also so many of those projects in action across the municipality.”

Leppert said the quarterly council reports were a “robust health check” of council’s budget and capital works program. 

He said there was a “significant” underspend on capital works programs and foreshadowed decisions would be made around projects into the future. 

“We’re not looking at any cap works budget variations today. There’ll be an interesting report in August when we look at the fourth quarter, and what should be carried forward and what shouldn’t. 

“We are monitoring that situation and respect that the cost of goods, the cost of labour and the demand in contractors to get our ambitious projects through is something that we have to constantly monitor and take advantage of the opportunities when they arise. It’s difficult, but we’re doing our best. 

“In spite of that underspend we are at last after many many years now embarking on really raiding that loan facility. Before we get to that next quarterly report I think we will have really drawn down on that in a big way, in a very healthy way. This is very good debt that is going to be driving city-shaping projects into the future.”

▲ Labour shortages and supply chain constraints have led to an underspend on the City of Melbourne's capital works programs. 

The City of Melbourne announced a record $254-million infrastructure spend in its draft budget for 2022-23, including $40 million for its landmark Greenline development along the edge of the Yarra. 

The massive infrastructure pipeline will generate up to 1000 jobs, providing a significant economic boost for businesses across the city.    

Deputy Lord Mayor Nicholas Reece said Melbourne remained an “attractive drawcard for developers”.

“The city boasts a healthy pipeline of approved projects worth almost $1 billion, stretching from the CBD and Southbank to Kensington, East Melbourne and Docklands,” Reece said.

“The new Digital Permits system will make applying for a planning permit easier than ever. By streamlining this process, we’re letting the world know Melbourne is open for business.”

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