Draft budget papers obtained by InDaily show the council expects to spend $24,031,201 in 2020-21 and 2021-22 to cover the cost of the arcade redevelopment.
The council estimates a developer would contribute a further $27 million to build above the ground-floor retail space.
However, the multi-million dollar investment is expected to boost the council’s coffers significantly, with the end market value of the ground-floor development anticipated to come in at $72 million.
Rent from the ground floor retail space is expected to generate $4.45 to $5.45 million each year, with rates set to fetch between $1.5 and $1.8 million annually.
The council has stressed the figures are a work in progress and may be subject to change once a developer and design is finalised.
Adelaide City Council took control of the arcade – which hasn’t been redeveloped since the 1960s – in September last year when the building’s ground lease expired.
An expression of interest process was launched in 2017 to find a developer for the site, with the chosen firm set to be announced by the middle of this year.
Construction is anticipated to begin after September next year, when the current tenant leases are due to expire.
All up, the council would own and manage 6000 square-metres of retail space and 260 public car parks and loading areas on the ground-floor, with a developer to manage all above ground-level space.
Council’s associate property director Tom McCready said “multiple” developer proposals were submitted through the expression of interest process.
He said the redevelopment would turn the arcade and Central Market precinct into a “food and wine destination of international repute”.
“We were delighted with the interest received and high level of thought shown through the initial stage 1 proposals, and have now shortlisted developers/consortia,” he said.
“From the level of interest shown, it’s clear developers have identified this city-shaping project as a once-in-a-generation opportunity.”
According to the draft papers, the arcade redevelopment has the potential to support both “day and night-time activities” and improve the north-south and east-west connections in the city.
The papers also state a redevelopment could “secure the future of the Adelaide Central Market for at least the next 50 years”.
The council has remained tight-lipped on its shortlisted developers from the expression of interest process, citing commercial and legal reasons.
On Saturday, The Advertiser published early concept renders prepared by Adelaide-based architecture firm Hardy Milazzo of what a redeveloped arcade could look like.
According to The Advertiser, the plans included an underground supermarket and retail area, a large open public space labelled a “grand promenade” and two residential and commercial towers constructed above the arcade.
However, InDaily understands the images are several years out of date and do not represent the concepts currently being considered by the council.
In response to InDaily’s questions about the status of the images, a council spokesperson would only say that they were not provided by the council.
The future for the approximate 60 traders currently renting in the arcade remains unclear, with McCready confirming there was “no guaranteed right of return at this stage”.
“We are yet to determine the retail mix within the redevelopment,” McCready said.
“The City of Adelaide is working closely with the Central Market Arcade Traders Association and traders to support the existing Central Market Arcade shopping centre.”
In September last year traders were offered a two-year lease with a six month redevelopment clause.
Central Market Arcade Traders’ Association president Craig Lunn said despite traders’ uncertainty about their long-term future at the arcade, “the atmosphere is quite positive”.
“It’s not doom and gloom, we just don’t know at what point we’re at,” he said.
“The original timeframe when they laid this out a couple of years ago showed that by December 2018 they would actually have someone signed up as their preferred option.
“That’s taken longer than thought but that’s a good thing from our point of view.
“If they’re not telling us anything it means they’re still trying to negotiate planning and that’s buying us more time.”
McCready said the council would continue to engage with existing traders ahead of the redevelopment start date.
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