The State Government has committed $367 million in capital funding to construct the new centre. The City of Melbourne is contributing a further $43 million which will be spent on municipal works around the precinct, such as roads and street lighting, a new footbridge to the north bank of the Yarra River, and marketing of the new centre.
The new centre is intended to bring major economic benefits to Victoria, including an estimated increase to gross state product of $197 million a year and an additional 2 500 jobs during the construction phase. Due to the extensive commercial developments being implemented in conjunction with the core development, the overall project is also a catalyst for a $1 billion redevelopment of the area adjacent to the Melbourne Exhibition Centre.
As part of the PPP arrangements, the State received $93.2 million from The Plenary Group for development rights of the precinct. A subsidiary of the group, Austexx Plenary Melbourne, will receive a 99-year leasehold for the commercial areas and a 25-year leasehold for the land relating to the convention and exhibition centre, once the convention centre is accepted by the State.
In addition to the main PPP deal, the State recently agreed in principle to contribute $5.2 million to the commercial development partners (Austexx Plenary Melbourne) towards the cost of the restoration of the old South Wharf docks and sheds, and integration into the commercial development. The State has also agreed to pay compensation to existing lease owners to relinquish their rights to the sheds.