THE City of Melbourne last week released the updated business case for Queen Victoria Market, which concludes that the Council's $250 million investment in its renewal is critical to the market's survival.
"This independent report provides the most definitive evidence yet about why renewal is needed; Queen Victoria Market has been in steady decline over the last 20 years and only a major investment can secure its future," said City of Melbourne CEO, Ben Rimmer.
The updated business case, prepared by SGS Economics & Planning, tested three options: 1) business as usual with no increased investment; 2) limited intervention measures; and 3) Council's full scale renewal program. Following a rigorous assessment, it concluded that Council's $250 million investment in renewal is the only way to secure the market's long-term viability.
"It clearly shows that doing nothing is not an option, and simple structural improvements or a quick facelift are not enough to deal with the market's ageing heritage buildings and infrastructure," Mr Rimmer said.
"If we want to ensure Queen Victoria Market survives and thrives for generations to come, we must invest in renewal now.
"As well loved as the market is, the reality is that over the last five years, the profitability of Queen Victoria Market Pty Ltd has progressively declined to zero per cent. This is in spite of the City of Melbourne agreeing to take a reduced return from its subsidiary company.
"If we don't take action now, Council will be forced to further subsidise the company's operations at an estimated cost to ratepayers of $100 million over the next 30 years."
According to the Council, the business case also validates the rationale for renewal, including the construction of two below ground operational areas, which is centred on securing Queen Victoria Market's place as a fresh food, open air market.
"Queen Victoria Market is more than just numbers on a page; it is about the rich heritage, long-standing relationships and rituals between customers and traders, the authenticity of the open air market experience and the important role the market serves as a community meeting place and where traders run small business," Mr Rimmer said.
"The whole purpose of Council's investment in renewal is to protect the heritage, traditions and unique atmosphere that make the market what it is today. We want to secure the future of the market that Melburnians love and the world loves to visit by attracting more customers and making it a more prosperous, efficient and safer place to shop, visit and do business.
"Existing traders can also be assured that renewal will not be funded through increased lease or licence fees, or costs to market traders. The market's core business as a fresh food market will be protected and we will deliver new below ground facilities to accommodate back-of-house operations, improved infrastructure and a more diverse, flexible market offer which will result in new market trading spaces and generate additional revenue, as outlined in the Retail Plan."
The Business Case also outlines the funding strategy developed by Council to deliver the Queen Victoria Market Precinct Renewal Program, as independently assessed by PricewaterhouseCoopers. It found that renewal will be delivered at a net capital cost of approximately $238 million, within Council's publicly announced commitment to spend up to $250 million on renewal.
Marcus Spiller, Principal and Partner, SGS Economics & Planning, said the updated business case provided a clear rationale for the renewal of Queen Victoria Market.
"After a thorough analysis of the three different options, we found that only the full scale renewal can safeguard the market's future. The updated Business Case also shows that the City of Melbourne's $250 million investment in renewal will deliver a benefit cost ratio of 5.5 which represents excellent community value for money and far exceeds many other comparable government-funded projects," Dr Spiller said.
More information about the Queen Victoria Market Precinct Renewal, including the updated business case, is available from the City of Melbourne website at <http://www.melbourne.vic.gov.au/building-and-development/urban-planning/local-area-planning/queen-victoria-market-precinct-renewal-plan/Pages/queen-victoria-market-precinct-renewal-plan.aspx>.