Business case finds Cannon Hill site 'not viable' for Warrnambool's new art gallery

City councillors will vote on Monday on a recommendation not to proceed, with further exploration of the Cannon Hill site due to the "significant" construction costs and "marginal" rate of return on investment.

Councillors will also be asked to set aside $65,000 in the 2023-24 budget for a business case to be carried out for a new gallery at the Civic Green site.

If the vote this time goes the way of officers' recommendations, it will bring an end to the saga over the Cannon Hill site which is also a memorial precinct for those who served in world war conflicts.

The prospect of an art gallery on Cannon Hill prompted two petitions opposing the move signed by thousands of people. It also sparked the Hands Off Cannon Hill campaign with bumper stickers and corflutes popping up across the city.

But there was some support for exploring the location, with a third petition attracting 500 signatures.

In August last year, the councillors voted 4-3 to prepare a business case for a new gallery at Cannon Hill which would determine the viability, construction costs and to see if there was a compelling case for investment in the Cannon Hill site.

That vote went against an officers' recommendation which was to do the business case for the current location at the Civic Green - something the council could now do if Monday's vote goes that way.

Many of those who spoke out in opposition to the Cannon Hill site said they were not against a new art gallery for the city, with the current site too small to house Warrnambool's growing art collection.

Its 5000 pieces are worth more than $12 million.

The business case, which was mostly funded by the state government, found that while Cannon Hill would "no doubt provide a stunning location", it was a costly option resulting in a relatively low increase in visitor numbers.

The low benefit to cost ratio would "present a challenge" in pursuing state or federal government funding, it found.

Two options for a new art gallery were looked at - one would cost $63 million and the second about $73 million.

But "unprecedented" rises in construction costs for building projects could have seen the cost of a new art gallery go even higher.

The likelihood of there being sand and unstable conditions could also add to the cost of the project.

The cost of the project skyrocketed from the $40 million predicted in the 2021 feasibility study because the council - based on community feedback - asked consultants to ensure the designs protected the views.

The designs were across two levels with the ground level sunk into Cannon Hill and level one having a smaller footprint. Objectors to the Cannon Hill site didn't want to lose the views across Lady Bay - a place many regularly sit and eat lunch.

"The Cannon Hill option would no doubt provide a stunning location, designing to meet the brief results in a costly option and a cost benefit ratio of slightly below one, meaning each dollar invested generates under one dollar in benefits," a report in Monday's agenda says.

"Due to the significant site constraints and the costs associated with construction; and the marginal rate of return on investment, it is not recommended that council progress further investigation for a new gallery located at Cannon Hill."

The business case found that while the Warrnambool Art Gallery had an average of 55,100 visitors each year, the first year of operation at Cannon Hill would bring in 72,580 visitors and grow to 116,000 after five years.

Construction of a new gallery at Cannon Hill would have created at least 135 new jobs, and once opened, another 51.

By 2030, a new art gallery could boost Warrnambool's economy by $8.5 million each year, the business case found.

With Cannon Hill all but ruled out as an option, if the council wants to apply to the state government to help fund a new art gallery, it has to explore a second site.

A business case for the Civic Green site would cost about $65,000 - if it is done now. If it is delayed that cost could be upwards of $200,000, the council says.

It was not unusual for several options to be explored through a feasibility or business case process in the planning for significant community infrastructure projects, the agenda says.

The existing gallery was built in 1986 as a memorial to Sir Fletcher Jones, and a new art gallery would allow Warrnambool to showcase more of the region's Indigenous culture.

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