Melbourne ratepayers face a massive $185.7m bill to upgrade council offices while local community projects are set to be raided to fund a library move.
Under the “Civic Precinct Renewal” plan, Town Hall bosses are preparing to overhaul the deteriorated Council House 1, Council House 2, and City Village complexes which cost more than $5m a year to maintain due to their age and condition.
Councillors voted unanimously at a council meeting on Tuesday night to produce designs for the multimillion-dollar precinct upgrade, moving the controversial project into its next stage.
A principal design consultant is expected to use $1.94m of the project’s budget to produce the detailed plans, despite a lack of public consultation for the development.
Also part of the plan is an immediate spend of $13m to move the City Library over the next two years.
The Flinders Lane-based library is currently on a commercial lease which expires in June 2028.
Under the renewal it will be relocated to a redeveloped City Village on Bourke St, bringing it totally under council control.
The council’s preferred option is to strip funds directly from other scheduled local upgrades within its existing four-year capital works budget.
Speaking at the council meeting, Lord Mayor Nick Reece defended the project by describing the current administrative offices as “decayed, decrepit and simply not satisfactory as modern places of work”.
“This project will deliver one of the most important new civic buildings in our city for more than a decade – creating a new home for City Library in a permanent council-owned building,” Mr Reece said after the meeting.
He said broader renewal would unlock 7,000sqm of new community space across the precinct.
“We’re also planning for the future – with a long-term proposal to renew our entire civic precinct so we can continue providing vital services for our growing community,” he said.
Infrastructure portfolio deputy head Councillor Rafael Camillo also backed the project, saying Melbourne’s CBD needed community infrastructure that kept pace with its rapid growth.
“This investment will deliver a bigger, modern City Library and create new spaces for learning, connection and essential community services,” Mr Camillo said.
According to the business case, the massive project is expected to deliver $210m in economic benefits against a net present cost of $185.7m, yielding what the council calls a “favourable” net project value of around $24m.
The council papers also show that the $13m library fit-out will require “reprioritising other capital works projects” to free up the cash.
The decision to reallocate local capital works funds to pay for the library comes at a time when the council is facing scrutiny over its wider spending priorities.
At the same council meeting the council revealed it had hidden a $37m budget blowout in the Queen Victoria Market renewal program, while councillor said the Lord Mayor’s decision to break a promise and then gift money to the Salvation Army was “not good governance”.
While the council said it would explore state government grants to offset the library’s $13m price tag, ratepayers will carry the bulk of the risk for the sprawling town hall upgrade.
The next phases of the project, including the structural refurbishments of Council House 1 and Council House 2, have been pushed to the 2028-29 financial year to accommodate the council’s current budget constraints.