News / Council

Saxon Street project hit by budget blowout

The much-vaunted arts and community hub will cost ratepayers almost $30 million 

An artist’s impression of part of the new Saxon Street precinct.
An artist’s impression of part of the new Saxon Street precinct. Source: Merri-bek City Council

Mark Phillips

BRUNSWICK’S new arts and community hub in Saxon Street will cost twice as much as originally planned as skyrocketing construction costs continue to inflate the project’s budget. 

Merri-bek City Council on Tuesday approved a final budget of just under $29 million for the project – more than double what was forecast just 18 months ago. 

In a seven minute meeting on Tuesday night, councillors approved without any debate the allocation of an extra $14.4 million for two high-profile projects in Brunswick and Fawkner. 

In awarding the building contract for Saxon Street to McCorkell Constructions for $25 million, the council has had to draw on extra reserve funds to pay for the project. 

The project will deliver 3500 square metres of floor space for arts and community activities on a council-owned site at 33 Saxon Street, adjacent to the Brunswick Baths, which once included a Catholic secondary school and the stables building that houses Blak Dot Gallery. 

A 134-year-old double storey house will be the centrepiece of the cultural hub, while a new L-shaped five-storey building will be constructed in the south-eastern corner of the site to provide space for galleries, workspaces, and a café. 

There will also be about 2500 square metres of public open space. 

The two main current tenants, Blak Dot Gallery and Siteworks, farewelled the site temporarily on December 17 with an all-day event that included live music and market stalls. Blak Dot will return to the site after the construction work is completed in 2024. 

But questions remain about the project after a cornerstone tenant, the Brunswick Neighbourhood House, walked away earlier this year following unreconcilable differences with the council about its vision for the precinct. 

In the council’s 2021-22 Budget, the Saxon Street project was forecast to have a total cost of $13.5 million to be spent over four years. That had increased to $22.6 million in the current 2022-23 Budget which was adopted in June and later revised to $23.3 million, according to a written report to councillors on Tuesday.  

But in a short six months, the cost has blown out again by another $5.7 million or 24.5%.  

This is made up of a fixed price for construction of $25 million plus a 10% contingency of $2.5 million, while other costs include $1 million for the project designer Kennedy Nolan Architects.  

Get more stories like this delivered to your inbox

No reasons were provided to the council meeting on Tuesday night about why the project budget had grown so much, however the entire building and construction industry is known to have been grappling with increasing costs attributed to COVID-19 and shortages of supplies and labour. 

The council has appointed McCorkell Constructions to manage the building project after a tender process that attracted five candidates. 

Even though McCorkell was the cheapest tender, its construction cost of $25 million still required the council to find another $5 million to overcome the budget shortfall. 

Despite the cost blowouts, one of the project’s key backers, Councillor Mark Riley, insisted it would be worth the expense. 

“The works have gone much beyond our expectations for capital works so it’s much more expensive than we intended it to be,” he said at the council meeting on Tuesday. 

“But I think all things considered, the value we will get out of this site once it’s been developed and redeveloped will be really important for Merri-bek and Brunswick and this whole area.” 

The project will be mostly funded by the council, supported by a $1 million grant from the commonwealth government. 

Construction works are set to begin early next year. 

At their meeting on Tuesday – the final one for the year – councillors also approved a 30.5% increase in the budget for the redevelopment of the Fawkner Leisure Centre. The budget for that project is now $36.9 million, up from $28.2 million, after a design and construct contract was awarded to Built Environs for $30.3 million.

Read more:

Saxon Street development to go ahead despite objections