Myer development deal: Hobart Lord Mayor defends $14 million support to keep retail giant in Hobart
The Hobart City Council has estimated the total value of its support for the Myer redevelopment in the city would reach about $14 million.
The council will provide up to $7 million in cash injections to the retail giant while an agreement to charge building owner Kalis Properties reduced rates equates to about $7 million in foregone revenue.
The council has agreed to pay Myer $3.5 million to fully reopen on the site where its store was destroyed by fire in 2007.
Lord Mayor Damon Thomas has defended not releasing the figures at the time of the decision in 2010 because no money would change hands until this financial year.
He told 936 ABC Hobart a 2010 report commissioned by the council and Kalis found the city would lose $82 million a year in retail turnover if Myer left the CBD.
"Had we not provided assistance to get this development up the loss in rates across the city because of the downturn in rates across the CBD would have been spread to the remainder of the city across the residential rate payers," he said.
Alderman Thomas said Myer's potential relocation to a shopping centre in Hobart's suburbs would have rendered the CBD a ghost town.
"Our city depends on a vibrant CBD, a CBD that has a heart and sustainability and allows us to get a rates revenue that we can spend throughout the entire CBD and the rest of Hobart," he said.
"If this had gone belly up we would have had to put that impost on all the other ratepayers and I'm proud that we did what we did."
The council has agreed to pay Myer $3.5 million when it starts trading again in Liverpool Street and a second instalment once the Murray Street stage is complete, which could take up to five years.
Myer will also receive up to four instalments of $875,000 a year, if it fails to meet a set annual turnover target.
Mr Thomas said the council acted appropriately.
"The grants were the subject of rigorous and stringent probity," he said.
The council has also entered into conditional agreements to provide grants and benefits to the developer, Kalis Properties.
