New Council Administration Centre Delivers $13 million Saving to Ratepayers

16 Apr 2019

The City of Newcastle’s (CN) relocation to the west end will benefit ratepayers by $13.1 million over 25 years, according to a business case by Australia’s largest commercial real estate services firm.

CN can today announce the finding of the CBRE business case following the awarding by Council of the tender for the fit-out of the new premises at 12 Stewart Avenue.

“With the fit-out cost now locked in, we can inform the public that the business case by CBRE has confirmed cost savings to ratepayers of $13.1 million over the next 25 years by relocating to the new building versus upgrading the existing buildings.

“This $13.1 million saving doesn’t include the huge gain for the city from the conversion of the Roundhouse into a five-star hotel by the Crystalbrook Collection. Nor does it include $22.2 million in estimated interest that Council will earn from the proceeds of the sale of the Roundhouse”, Chief Executive Officer Jeremy Bath said.

Procurement for the fit-out of City of Newcastle’s new administration centre is set to begin in May following the awarding of a contract to NSW based firm Graphite Projects. On site construction will commence in mid-June.

The $8.2 million contract will fit-out all six floors in the new building for 425 Council staff, and also includes construction of a new Council Chamber.

A reimbursement from the owner of the 12 Stewart Avenue building of $372,000 reduces the actual cost to Council of the fit-out to approximately $7.86 million.

The reimbursement is due to Council's decision to have carpet installed as part of the fit-out contract with Graphite Projects rather than by the building owner as is typically the case.

CEO of City of Newcastle Jeremy Bath said the move to 12 Stewart Avenue continues to be on budget.

“In October 2017 we estimated the cost of the fit-out at approximately $7 million. Then ten months later the elected Council resolved to move the Chamber to the new building, which we told them would bring the total cost to $7.8 million.

“Council will use the $372,000 reimbursement from the building owner towards the fit-out contract, meaning the actual cost to Council is exactly what we said it would be in July last year," he said.

United Services Union (USU) Organiser Luke Hutchinson recently met with City of Newcastle CEO Jeremy Bath to discuss several issues raised by union members associated with the move to 12 Stewart Avenue.

“While many of our members are excited about the move, the USU has long said that a collaborative approach with the City is crucial to ensure the wellbeing of all members.

“The USU appreciates there is a level of anxiety associated with any move of this scale, and after meeting with the CEO, we’re confident that we can have any concerns that our members have addressed and resolved in an open and timely manner.

“We also welcome a number of initiatives associated with the move, such as bringing all administrative staff under the one roof and members to enjoy vastly improved workplace facilities”.

“These improvements to workplace facilities and culture can increase collaboration, productivity, encourage staff comradery and raise the overall wellbeing which is really positive for our members working at City of Newcastle,” he said.

Jeremy Bath said that if Council had remained in its current buildings, staff would have continued to be spread across three separate buildings and 13 floors.

"The move allows the consolidation of staff from 3 buildings into one, and across just six floors with a layout that will drive a productive and collaborative way of working.

"Rather than staff being told where they must sit, our employees will decide which team to sit with based on the projects they will be working on that day.

“It’s a new way of working that has proved extremely successful for companies including the Commonwealth Bank, Airbnb, Macquarie Bank, KPMG, PricewaterhouseCoopers, Bankwest and Blacktown Hospital.

“The practise of a staff member having the same desk for twenty years which sits unused when they are out in the field, in meetings, on holidays or away on sick leave, is outdated and an inefficient use of space and resources.

“The advice of some of Australia’s most successful companies is that allowing flexible team-based seating improves staff communication, collaboration and interaction, which in turn ensures better decision making,” Mr Bath said.