Federation Square East
July 2013
Reclaiming paradise by decking over a parking lot?
Federation Square East (FSE) is back on the agenda as the Napthine Government calls on interested parties to submit ideas for development options for the site.
The question is not so much whether or not this three hectare central city site should be developed – it is more a question of when, and how.
The FSE site, which currently comprises rail yards and a car park, is one of the few major sites still undeveloped around the CBD. Situated between Federation Square and Batman Avenue, the site is strategically important to Melbourne given its proximity to the CBD, and its direct link to the Olympic Park sports precinct, the MCG, the Southbank arts precinct, Flinders Street Station and the Yarra River.
Since at least 2006, when the Bracks Government spent around $1 million on engineering, feasibility and design reports, successive Victorian Governments have investigated opportunities to develop this site.
Before any development decisions are made however, there are a number of key issues that must be considered.
Firstly, development of the site will be expensive as it requires a ‘deck’ over the existing Jolimont rail yard. Estimated to cost around $300 million, this ‘deck’ is so costly because of the engineering and logistical difficulties associated with building over a major rail activity area.
The second challenge is to balance the competing interests of public amenity with potential residential or office block developments that may be required as leverage if private investors are expected to contribute to development costs.
There is no doubt private investors would find the location of FSE very attractive, and whilst the opportunity to build residential or office towers on the site may appeal to the developer, it may not appeal to the public. Hence, some tough decisions must be made.
If public amenity is the key priority, then Chicago’s Millennium Park is potentially the exemplar to which we might look. Millennium Park, a 10 hectare urban regeneration project built over rail yards and car parks near the Lake Michigan shoreline of the Chicago CBD, features a music pavilion similar to the Sidney Myer Music Bowl, amazing sculptures such as Cloud Gate by Anish Kapoor and Crown Fountain, an interactive video sculpture, and the 2.5 acre Lurie Garden.
Millennium Park has received awards for its accessibility and green design and there is no doubt any city in the world would be happy to have this public park as its centrepiece.
The upside for this development is that it is a public park, free from high rise office blocks and residential buildings. In the absence of opportunities for private investors to leverage funding from the development of saleable or leasable office or residential titles on site however, this public amenity option came with a US$475 million price tag, which was borne by the taxpayer and private donors.
This is not to say the Park and its amenity was not a wise investment. Given the choice, I suspect Melbournians would also overwhelmingly support the creation of beautiful open parkland on the FSE site, free from high rise developments blocking our views of, and access to, the riverfront. What we must keep in mind however, is if we choose this option, the most likely funding source will be taxpayer dollars, and this raises the question of prioritisation of public spend.
Perhaps, however, with a little more lateral thinking, there is an alternative. Take Barangaroo in Sydney for example. Barangaroo is a $6 billion, 22 hectare urban regeneration project between the western edge of the CBD and the shores of Sydney harbour. In 2003, the NSW Government set the vision to transform this former container port into one of the Asia Pacific’s foremost financial and professional services employment hubs.
Barangaroo is made up of three redevelopment areas:
• Barangaroo South, a major new business, tourism, residential and retail precinct opening onto a public waterfront promenade;
• Barangaroo Central, a cultural and civic area focused on recreation, relaxation, events, festivals, entertainment and leisure activities; and
• Headland Park, six hectares of publicly accessible parkland with picnic areas, bush walks, tidal pools, and a new cultural centre.
What is of particular interest is that Headland Park is being delivered at no cost to taxpayers, but instead is being funded via payments from the development of the Barangaroo South commercial precinct.
In an innovative funding agreement, in exchange for rights and 99-year leases to develop particular sites within Barangaroo South, Lend Lease makes regular development payments to the Barangaroo Delivery Authority. Since March 2010, these payments, which fund the development of the public park areas, have totalled $206.4 million.
In exchange for innovatively blending these commercial, residential and public amenity areas together, the Barangaroo project is expected to be delivered at no cost to taxpayers. In essence, the trade-off for providing free public parklands for the people was planned commercial and residential high-rise in certain areas of the site.
There will no doubt be an excellent array of workable commercial and financial solutions put forward to support the potential redevelopment of the FSE site. The question is how willing are we, as the people who work and live in the city, to accept a blend of uses on this site as a trade-off for some much needed private investment?
Kate Roffey is Chief Executive Officer, Committee for Melbourne
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