Latest News

Back to Latest News back

 

Fixed interest loan presents pathway for Newcastle Art Gallery expansion to proceed

Fixed interest loan presents pathway for Newcastle Art Gallery expansion to proceed
July 23, 2021

A financial report concludes that a loan with a fixed interest rate of less than 1% presents a pathway for the City of Newcastle to fund the $35.6 million expansion of the Newcastle Art Gallery – doubling the Gallery’s size.

The financial report recommends the preferred funding option is to borrow up to $22.6 million over a 10-year fixed rate term from NSW Treasury Corporation, which is the central borrowing authority for the New South Wales public sector.

Newcastle Lord Mayor Nuatali Nelmes said while this funding option has been identified as preferable, City of Newcastle would continue to seek Federal and State grant funding before taking out the loan to ensure all available grant funding options have been exhausted.

City of Newcastle has already approved a development application for the project, which includes upgrading and expanding the Gallery to provide modern facilities such as a new café and retail shop, multi-purpose and educational program space, improved display and secure international standard loading dock.

An additional 1,600 square meters of exhibition space will include dedicated areas for the Gallery's collection on the lower level, while the upper level will cater for a variety of travelling exhibitions, including international shows.

Newcastle Lord Mayor Nuatali Nelmes advised "An expansion of the Gallery has been discussed for 16 years with more than $10 million raised by the community to support the project. I’m pleased to say that City of Newcastle staff have identified a funding pathway to more than double the size of this wonderful community asset and make our shared dream a reality.

"With the current favourable economic conditions, including historically low interest rates, the time has come for City of Newcastle to make this project happen.”

Lord Mayor Nelmes said a number of options including using cash reserves, external loans or a combination of both, have been evaluated in the report to Council, with a recommendation to borrow up to $22.6 million via a fixed interest rate loan of 0.88% over 10 years to fund the balance required for the expansion project.

The various options were compared on their Net Present Value (NPV), with estimates showing that borrowing up to $22.6 million over 10 years at all-time low interest rates far outweighs the benefits of using our own cash.

Lord Mayor Nelmes adds "City of Newcastle is committed to the Newcastle Art Gallery continuing to be a symbol of excellence and source of pride as a major cultural asset for our state, which is home to a nationally significant collection that includes more than 7,000 works valued at $115 million.”

Loan borrowings are a desirable option given the current economic conditions, which enable Council to undertake this significant work while continuing to deliver a budget surplus and cash reserves.

A tender report will be submitted to Council later this year seeking approval to award a construction contract.

Fast Facts

Newcastle Art Gallery was Australia’s first purpose-built regional art gallery, officially opened by Her Majesty Queen Elizabeth II in 1977.

The Gallery is home to the most valuable collection in regional Australia, with more than 7,000 works valued at $115 million, including art by Arthur Boyd, William Dobell, Donald Friend, Tracey Moffatt, Margaret Olley, John Olsen, Patricia Piccinini, Gwyn Hanssen Pigott and Brett Whitely.

The current footprint of the 44-year-old building only allows 1% of the collection to be exhibited over the course of a year.

The outstanding cost of the expansion is estimated to be $35.6 million, with City of Newcastle having already invested $3.6 million getting to the project to the position of being shovel ready.

Significant funds are being held in trust with the Newcastle Art Gallery Foundation Board for the specific purpose of expanding the Art Gallery, including a $10 million bequest from Valerie Ryan, a commitment to additional community fundraising of $2.5 million and $500,000 from the Margaret Olley Art Trust.

City of Newcastle committed to contributing $16.2 million towards the project (including the $3.6 million already invested) following a unanimous resolution of Council in February this year.

The project was included in the NSW Government's Cultural Infrastructure Plan 2025, which identified the redevelopment of the Art Gallery precinct as a ‘regional opportunity’.

A business case prepared in accordance with NSW Treasury guidelines demonstrates a Benefit-Cost Ratio (BCR) of 1.77 and a positive Net Present Value (NPV) of $24.1 million for the project, which is expected to create 170 jobs, including 152 in construction and 18 ongoing once it is complete.

The expansion is expected to inject more than $1 million into annual regional revenue by attracting more than 14,000 additional local visitors and tourists each year.

Further additional visitation is estimated at 73,590 in relation to use of the additional Gallery facilities outside of exhibition spaces; generating revenue of $2.7 million in relation to the use of these facilities.

Images top: Newcastle Lord Mayor Nuatali Nelmes at Newcastle Art Gallery; images centre and above: Newcastle Art Gallery expansion project renders Courtesy City of Newcastle 

Related Articles

25th September 2020 - Funding boost for Newcastle Museum and Art Gallery

4th February 2019 - NSW Politicians make election pledges to parks and the Newcastle Art Gallery

8th April 2018 - Director role restored at Newcastle Art Gallery

7th June 2021 - Broken Hill Regional Art Gallery set to close for extensive repairs

7th January 2021 - NGV to receive $20 million grant from for new contemporary art gallery

13th November 2019 - City of Launceston approves development of gasworks art gallery

31st August 2019 - Business case released for National Aboriginal Art Gallery in Alice Springs

24th April 2019 - Bendigo Art Gallery Guides celebrate 30th anniversary 

27th March 2019 - Federal Government commits $10 million to new Rockhampton art gallery

29th November 2018 - Expansion approved for the Art Gallery of NSW

28th February 2018 - New Melbourne art gallery grows from private collection

14th June 2017 - Art Gallery of NSW gets $244 million funding for Sydney Modern expansion

13th April 2015 - Council rejects calls to fund Cessnock Regional Art Gallery

10th July 2013 - Albury Regional Art Gallery closes for $10.5 redevelopment


Asking a small favour
We hope that you value the news that we publish so while you're here can we ask for your support?

The news we publish at www.ausleisure.com.au is independent, credible (we hope) and free for you to access, with no pay walls and no annoying pop-up ads.

However, as an independent publisher, can we ask for you to support us by subscribing to the printed Australasian Leisure Management magazine - if you don't already do so.

Published bi-monthly since 1997, the printed Australasian Leisure Management differs from this website in that it publishes longer, in-depth and analytical features covering aquatics, attractions, entertainment, events, fitness, parks, recreation, sport, tourism and venues management.

Subscriptions cost just $90 a year.

Click here to subscribe.

 

supplier directory

The Complete Guide to Leisure Industry Products & Services.

See the directory see all

THE FITNESS GENERATION

The Fitness Generation is now part of NovoFit - see www.ausleisure.com.au/suppliers/novofit/

read more

Fitness / Technology / Wellness

 
 

Spill Station Australia

Compliant chemical storage and decanting solutions. Includes spill kits, spill containment pallets, chemical decanting decks and safety shower and eyewash equipment. See our full range of solutions

read more

Aquatics / Safety / Security / Venues

 
 

State Wide Pool Services

Known as Hydrilla since September 2020 - see www.ausleisure.com.au/suppliers/hydrilla-pty-ltd

read more

Aquatics

 
 

Aussie Strength

We are Aussie Strength. The ultimate supplier for Commercial Gym Equipment that's built to deliver in the toughest environments. From USA-Built hardcore weight training equipment from Arsenal…

read more

Fitness / Technology / Wellness

 
 

Abel Sports

INTRODUCTION Abel Sports is Australia’s leading manufacturer and suppliers of Goal Posts, sports ground safety netting systems and coaches boxes for Stadiums ,Sports Clubs, Councils and…

read more

Recreation / Sport / Venues

 
 
 

PathMinder

PathMinder Pty Ltd have partnered with AllUser Industries srl to bring Europe’s most advanced high security portals to the Australian and New Zealand markets. AllUser Industries started to…

read more

Access / Fitness / Recreation / Security

 
 

iDwala Pty Ltd

iDwala is the Community Sports Surface Specialist offering the highest quality designs and technical expertise to Councils, Schools and Sporting Clubs looking to create sporting…

read more

Consultants / Design / Recreation / Sport / Surfaces

 
 
 
 

get listed with our suppliers directory

Get your business noticed in our targeted directory. Viewed by 10,000 industry professionals per week!

list your business