'Completely unviable': project manager speaks candidly about medical centre

On Tuesday, June 25, Bathurst council revealed it had rejected a car park funding request for the project and, later that night, the development group released a statement confirming it would not lodge a development application (DA) for the BIMC.

Zauner Construction was the project manager for the BIMC and the company's director, Garry Zauner, told the Western Advocate on June 26 that, unless the council can agree to the earlier car parking proposal, there's no way forward for the medical centre.

That proposal, he said, was for 570 car parking spaces over three levels, to be provided in the air space above the existing car park behind the Bathurst RSL Club.

"We would remodel the ground floor, provide two publicly accessible green space areas that are part of that remodelling, because there's been a lot of changes made to the development as a result of the NSW Planning and Bathurst council suggestions, and the community suggestions, it must be said," Mr Zauner said.

"And they [Bathurst council] would contribute a fixed contribution of $5 million for their bit, and BIMC would be responsible for the rest of it.

"That was the deal we've been working on for the last few years and, really, I'm a bit surprised, because I think it's a really good deal for everyone."

The council, though, wanted 740 spaces to be provided on the site - 170 more than what BIMC was proposing - and for the costs of those additional spaces to be covered by the development group.

If these additional spaces weren't provided, the council would have been left with fewer parking spaces than it already has certainty over on that site.

Mayor Jess Jennings has said the council was prepared to provide significant financial and in-kind support to the development.

This included providing the land area necessary for the car park at no cost to the developer, despite it being valued "conservatively" at over $3 million.

The council also intended to contribute $5 million of ratepayers' money towards the construction of the car park, and had amended the height restrictions to make way for the six-storey integrated medical centre and four-storey car park.

Cr Jennings said this "conservatively amounts to a commercial real estate gain over $10 million for three extra floors".

While Mr Zauner said the development group understands council's difficult financial position, the group was also reaching its financial limit and couldn't fund the additional spaces.

"We're already at the very edges of our feasibility limit, so we really can't fund another layer of cars on top of that again," he said.

The two parties, which have had a good working relationship, were simply at an impasse.

"They're car spaces for the community. We're being asked to fund more cars, which of course our patients can also use, but it's just completely unviable for that to happen," Mr Zauner said.

With no funding agreement in place for the car parking, the DA cannot be lodged, which is disappointing for all parties involved.

"Obviously, we've worked four long years and in good faith worked with council for a long time to try and get this deal done," Mr Zauner said.

"Everyone knows how difficult these developments are and how difficult funding is.

"It's difficult for council, too, we acknowledge that, but this recent change of wanting another level of car parks added on at our cost is obviously a bridge too far for us and so we won't be able to lodge the DA unless there is a return to the original proposal.

"From our point of view, we can't lodge the DA until there's a car parking agreement because it's just physically not possible, so it just means that we can't progress."

While the car parking arrangement was the sticking point, rising costs were also hurting the BIMC development.

When the project was first announced, it was estimated to cost $70 million.

The COVID-19 pandemic and inflation has led to building supply costs skyrocketing across the construction industry, with many projects seeing significant increases to their original estimates.

The BIMC was no exception, and Mr Zauner said it was difficult to manage.

"Building costs have gone up 30 to 40 per cent in the last four years, as we know, and that's made everything - not just this development, everything - extremely marginal and there's no secret that everyone's costs have gone up," he said.

"Obviously, interest rates aren't helping anyone, including Bathurst council, so that's why these types of proposals need to be considered win-win, really.

"We need to all work together to get to the right outcome."