The 920sqm building at Tonsley Innovation District – known as the Boiler House – originally helped power the main Chrysler and Mitsubishi vehicle assembly line, but has been idle since the factory shut in 2008.

A decade later, Adelaide-based hospitality and brewing operator Kidd Retail Group (KRG), which runs the Lady Burra Brewhouse and Kitchen took up a State Government tender to bring the 3000sqm of land and Boiler House back to life with a microbrewery, including a public bar and tasting area, under an eight year lease.

Three years on, the plans have fallen through, and the land and plant that sit adjacent to the Tonsley Railway Station are up for sale by expression of interest until May 6.

Renewal SA said invitations to “adaptively re-use the Boiler House” were open to the hospitality sector “in the hope of attracting a new purchaser to expand the recreational offering at Tonsley”.

“The site is considered ideal for a future restaurant, café, microbrewery or distillery,” it said.

“We are seeking a hospitality operator who is interested in adaptively reusing the Boiler House and honouring its industrial heritage by creating a contemporary meeting place that celebrates its raw, utilitarian character and complements the historic conversion of the neighbouring Main Assembly Building.

“The Boiler House is in a prime location to leverage the growth of Tonsley Innovation District, which now boasts 1700 staff, more than 8000 students per year and a rapidly growing residential community, currently sitting at 260.”

Renewal SA said it was looking for a new “hospitality innovator” after ending the original agreement with KRG.

“Unfortunately, despite Renewal SA having negotiated extensively with Kidd Retail Group to deliver this amenity for the Tonsley community, no work ever commenced on the site,” it said.

KRG owner Steven Kidd said the group had intended to offer craft beer on site under the Lady Burra label, but delays and increasing costs in the midst of the global pandemic had blown the budget, with the company and Renewal SA agreeing to part ways last year.

“It’s a building that needs a lot of work done to it and we knew that going into it,” he said.

“An old building like that has so many problems with it. It needed a lot of monies and infrastructure to upgrade it: asbestos removal, structural issues, and having an old warehouse converted to a retail food precinct was really quite challenging for a building like that.

“There were some challenges around where our patrons would park … there’s a heap of work that needed to go through the due diligence before we were really ready to build.

“I think through this project they (Renewal SA) realised they needed to spend more on this building and it was just timely that they said let’s close it off.”

Kidd said the group had already spent about $110,000 on architectural drawings, tank redesigns and plumbing for the brewery when the pandemic hit and the projected was axed.

“Given retail was one of the main areas that would suffer through this, we were unsure if it was the right thing for our group to proceed,” he said.

“They never really presented any opportunity or options to rehash the deal, given that we’re in the middle of a pandemic.

“It probably would have been good just to sort of go through how it could be done again, but we fully appreciated that they were always quite tight on the budget number that was approved through government and that was their fixed budget.”

He said KRG had planned to spend up to $2.5 million on the project with Renewal SA investing a further $2.5 million.

“We went through quite a long period to understand what the building was and what needed to be invested into it,” he said.

“The amount of time and energy that went into it were obviously quite a lot and … Renewal SA were always very tight with their budget.”

He said with the property up for sale, rather than lease through Renewal SA, the group intended to make an offer to purchase the Boiler Room.

Kidd said the group also planned to open a Miami-style rooftop and cocktail bar, called Two Suns, in the city later this year after three years.

But, he said a proposed city café – Frequency – would no longer go ahead and the group’s wine and tapas bar, The Noble Gentleman, had merged with Lady Burra.