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Council to consider report finalising GovHub land sale and lease

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A report recommending Greater Bendigo City Council sell land at 189-229 Lyttleton Terrace, the site of its former offices, to progress the development of the Bendigo GovHub project will be considered at the May 20 Council meeting. 

It also recommends Council enter into an agreement with the Department of Treasury and Finance to become a tenant in the building. 

The report is the final step required to implement Council’s in-principle decision from the February 2019 Council meeting, which authorised staff to progress selling the site to Development Victoria (which is building the Bendigo GovHub on behalf of the Victorian Government) and outlined Council’s commitment to become a tenant in the building. 

This sale process has been undertaken in accordance with the Local Government Act (1989) and Local Government Act (2020) that allow for the direct sale of land between governments.

The Bendigo GovHub will place 600 workers from a range of Victorian Government departments and 400 City of Greater Bendigo staff in one building in central Bendigo. It will create 90 construction jobs, deliver 100 new public sector jobs, enhance the customer service experience, deliver a boost to the local economy, particularly nearby hospitality and retail providers, and increase the overall vibrancy of the city centre. 

Developers of the Bendigo GovHub believe it will be the most sustainable government building in Australia. It has been designed in accordance with the National Construction Code (2019) to achieve a ‘Nabers’ rating of 5.5 and a Greenstar rating of at least 5. It is also expected to reduce power costs by 63 per cent compared to a standard office building, and the savings are expected to be greater when compared to the current buildings on the site. 

The desire to achieve a high quality, sustainable outcome for the project extends also to the proposed demolition and works on the Lyttleton Terrace site, which will impose conditions on the developer to ensure at least 90 per cent of waste generated from demolition is diverted from landfill. 

The Valuer-General Victoria, Victoria’s independent valuation authority, has set a value for the site at $5.5M, excluding GST. Proceeds from the sale of land will go towards the City’s fitout costs. 

As part of the February 2019 in-principle decision to become a tenant in the Bendigo GovHub, Council set a limit to what it would be willing to cover in rental and fitout costs. These costs have been achieved.

The all-inclusive project cost, including the City’s decant costs and contribution to fitout costs, is projected to be $35.6M over 40 years. As the initial lease term will be 20 years, a 20-year total project cost has also been calculated and is projected to be $24.47M in today’s dollars.

Whilst long term rental costs would be greater than Council is currently paying in today’s dollars, it is expected that a portion of this increase will be offset by the operating costs of a more sustainable building, productivity gains through centralising offices, changes to work practises and technology improvements.

In preparation for this project, the City’s Lyttleton Terrace Customer Service Centre moved to 15 Hopetoun Street in December 2019 and the remaining 200 staff on the Lyttleton Terrace site moved to temporary offices in Fountain Court between January and March this year. 

To view the Council report visit: www.bendigo.vic.gov.au/agendas

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