By ALLISON HORE
The City of Sydney will consider extending Woolworths’ lease on the central Sydney building that is home to their Town Hall flagship store. The lease was due to expire in 2030, but after a “very good offer” from Woolworths, the council was left with the decision whether or not to extend the lease, further delaying the long-awaited Town Hall Square development.
The City of Sydney has owned the building on the corner of Park and George street, of which Woolworths occupies 6 floors, since 1985. While no information is yet available as to the value of Woolworths’ offer, councillors hope the money will bail them out of COVID related financial strife.
In a meeting last week, Deputy Lord Mayor Jess Scully said an increase in the lease payments from Woolworths would help the council with the “difficult financial situation” that they face in the COVID-19 fall out. The council estimates their revenue will decrease by $75 million over a 6-month period.
“It will be a very important revenue stream in the context of the budgetary impact of COVID-19 and its slowdown of the city,” she said in the meeting.
But accepting the offer comes at the extent of the long-delayed Town Hall Square development, which is a major part of the City of Sydney’s Sustainable Sydney 2030 project to make Sydney a more “green, global and connected city”.
The Square would open up the area opposite Sydney’s Town Hall and create a public gathering place similar to those in other cities, and it would complement the George Street light rail and CBD pedestrian boulevard.
The extended lease for Woolworths is just one of many setbacks the City of Sydney has faced in seeing through the plans for a Town Hall Square redevelopment, which were first proposed in the 1980s by then lord mayor Doug Sutherland. Before moving forward with the square, the council has had to negotiate with the NSW Government on their Light Rail and Sydney Metro developments.
Although no budget has been set aside for the project, the City of Sydney has coughed up around $150 million to buy properties on key pieces of land. In 2004 the council acquired the building on 207 Pitt Street for $19.9 million. At that time, they already owned the Woolworths building directly opposite Town Hall, the Hotel Coronation and the Lowes building on the corner of Pitt Street and Park street. The Pittsway arcade was purchased by the City of Sydney in 2016 for $43 million.
Despite the amount of money sunk into building acquisitions, and the lack of a solid plan and timeline moving forward, the City of Sydney thinks it is a worthwhile investment.
“Commercial revenue generated from the properties is used to fund city services,” the council spokesperson said.
The council will meet on Monday 25 May to decide whether or not to accept the proposal from Woolworths. They will also consider extending leases for four other businesses occupying the building for five years beyond their 2030 end.