Tower for our future

Given the recent machinations in the Greek Orthodox Community of Melbourne and Victoria, BILL PAPASTERGIADIS, the president of the GOCMV outlines the case for the proposed Greek Tower in Lonsdale Street.

The Hellenic Tower project is a project that looks forward 50 years and aims to secure the future of the Greek Orthodox Community of Melbourne, Victoria, (GOCMV).

On 21 March 2009, in front of tens of thousands of Greeks, at the Antipodes Festival, Premier John Brumby announced a package of $3.5million for the Greek Community and the Lonsdale Street precinct.

$ 2million was granted towards the Greek Tower, which will  incorporate a centre for Greek culture, heritage and language.

The $2 million grant is the largest grant awarded to a community group in Victoria’s history, significantly higher than grants provided to the Chinese and Italian communities.

The grant arose from an independent study commissioned by the Victorian Government on the feasibility of the Greek Tower, which was funded by the Victorian Government at a cost exceeding $85,000.

What is incorporated in the Greek Centre?

The proposed centre is to be a multi-faceted facility, reinforcing the historic link of the Greek Community with the Lonsdale Street precinct.

The precinct plays a critical role in the representing the Greek Community’s contribution to Melbourne and Australia.

The Greek Centre will be a space for the Australian community that will present the history and current reality of Greek Australian history, culture, language and faith through exhibitions, performances, conferences, screenings and multimedia experiences.

The grant of $2 million is directed towards a cultural centre within the Greek Community Building to occupy two floors of the proposed centre.

The intangible cultural heritage of a Hellenic Lonsdale Street needs to be heralded for all Victorians, for it is Lonsdale Street that looms large in the imagination of Greek and other Australians.

Further funding from federal and local governments

The Victorian Government has advised it is keen to endorse and assist the Greek Community in seeking equivalent funding from the Federal Government.

This was recently announced in State Parliament.

Discussions will also be commenced with the City of Melbourne.

With the success of the Antipodes Festival, the Greek Community now enjoys an excellent relationship with the Melbourne City Council and the Mayor.

The Greek Government in its discussions with us expressed its support, and given the current endorsement by the Victorian Government, more discussions will now be pursued.

Funding is only for Lonsdale St.
The Victorian Government made it clear to the Greek Community that it would not provide funding to any project outside of Lonsdale Street.

The city is the centre of commerce, culture, arts, trade and tourism.

It is the Victorian Government’s aim to reinvigorate the Lonsdale Street precinct, their own report concluded ‘the vision for Lonsdale Street emphasises a cosmopolitan, professional and hospitable Greek precinct which embodies the concept of Hellenism to create a high class and sophisticated restaurant and cultural precinct – a true cultural destination.

Melbourne is the most culturally diverse city in Australia boasting 17.9 million visitors annually.

The problems with Bulleen

The Bulleen site has a litany of problems, the biggest being that the site is under the flood plain.

This situation can only be rectified by building massive concrete structures to bring the site above the flood plane.

The cost of such construction will run into many millions.  .

The reality of refurbishing the current Lonsdale site
The current building is in disarray!

It does not satisfy any building codes or regulations.

Fire escapes are substandard, access is poor, there is no disabled entrance and the one and only elevator is totally inadequate.

Renovating old buildings is four times more expensive than building it anew. Also a refurbishment does not resolve the biggest problem confronting the Greek Community, that of generating an income stream.

The Greek Community has little funds/profit to undertake projects.

Independent and renowned experts  prepared the report

The Victorian Government Feasibility Report for the Centre, which fully endorsed the Tower project, ensured that the best-qualified professionals in different areas of expertise were engaged.

The following parties were engaged to provide their assessment and their reports were prepared independently of the Greek Community.

The Architects:Bruce Henderson Architects

Bruce Henderson Architects who provided the design for the centre are a respected practice locally and internationally, with experience in residential, commercial and retail architecture.

As a practice with a strong developer base they specialise in the delivery of solutions that achieve quality design within the budgetary constraints of the project.

The success of projects such as Concept Blue, Royal Domain and Flinders Wharf, are testament to this.

Their pioneering design will act as a beacon for the Greek Community and will be recognised by all as the city’s Hellenic cultural centre.

The facade is a vital component in this vision. An ancient Greek scene integrated into the glass panels becomes a focal point for the precinct and a landmark that will instil pride into our community.

The Project Budget:WT Partnership

WT Partnership, one of Australia’s leading quantity surveyors and construction cost consultants, estimated the total construction cost at $21 million.

Depending upon the level of fit-out, and if only a cultural centre is offered as currently funded by the Victorian Government was incorporated, then the total cost would be $23 million.

The project could be funded in a number of ways.

The Greek Community will only seek finance when there have been sufficient pre-sales and leases so that the project is “de-risked” and the returns firmly established.

In those circumstances, there are many financial institutions that would lend that amount of money.

Valuation , research and property advisors: Landmark White

Landmark White one of Australia’s largest valuers, undertook a detailed assessment of the project taking into account the global economic decline.

A letter to that effect has been signed by Landmark White.

Landmark White use a number of comparable sales.

For example, they refer to the development at Therry Street, Melbourne.

Curiously, the average prices at Therry Street represent $10,000 per sqm, whereas we have only assumed $9,000 per sqm.

We have erred on the side of conservatism, by understating our revenue by 10 percent.

We note that the average size of the Therry Street apartments is 30 sqm to 40 sqm, a size which Mr Paikopoulos says is not sellable (yet the project has been sold)!

Furthermore, there were 150 apartments at Therry Street.

The Lonsdale Street project will sell substantially less apartments.  Accordingly, the most comparable project, which is a few hundred meters from Lonsdale Street, more than vindicates our analysis.

We have not therefore relied on sales in “exclusive” areas.

He claims that the figures are too high.

It is with surprise that we note that they state that after a renovation of the existing building, they have assumed a rental of the retail of $150,000.

Landmark White, after an exhaustive analysis of rents, conclude that the retail rental is likely to be $99,000!  We have relied on a figure that is achievable and verifiable, not “a made up figure.”

The Landmark White Valuation is a well-researched and professional analysis revealing that our assumed sales figures are less than what is being achieved in the market.

In addition, with lower interest rates, there has been a rush for more affordable property, making these smaller apartments a commodity whose demand is increasing.

The Financial Benefit

No member of the Greek Community would support the project if it threatens the economic viability of the organisation.  Construction would only commence based on sufficient pre-sales, or leases.

The annual operating costs and funding sources of the centre will depend upon the exact number of services or space offered.  If, for example, it is only confined to a cultural centre then the operating budget would be no more than $200,000.  Yet, the net return for the Greek Community would be $2 million.

At present, the Greek Community has a budget surplus during some years of $50,000 and in other years it in fact operates at a loss. If the Greek Community does not develop an income stream to help fund projects to sustain its important cultural and language institutions, then query its relevance.

Landmark White values the project upon completion at approximately $44 million.

With a small investment by the Greek Community, funded by sales of the project, the Greek Community is left with an asset of $44 million producing net return of $2 million.

The Future

The project enjoys the support of most in the Greek Australian community of Victoria. It has awaken community feelings amongst second and third generation Greeks who view this project as an opportunity to leave a lasting legacy symbolising the important role that Greeks play in the Melbourne and the global Hellenic Diaspora.

We are determined to deliver this project as a financial success for Greek Community and as a symbol of pride for all the Greeks.