Business Sydney Executive Director Paul Nicolaou has called for closer scrutiny of the City of Sydney’s plan to fast-track the $150 million Town Hall Square project, warning it could place additional pressure on struggling CBD businesses.
The concerns come after newly released City of Sydney forecasts revealed the council is expected to move from a projected $98.3 million operating surplus in 2027-28 to a $123.8 million deficit the following financial year, when major spending on the project is scheduled to begin.
The Town Hall Square development will see a block of commercial buildings opposite Sydney Town Hall demolished and replaced with a new public square in the heart of the CBD.
Nicolaou said the proposal raises important questions about the impact on Sydney’s commercial centre.
“Any proposal that risks weakening the commercial heart of Sydney must be thoroughly scrutinised,” he told The Australian.
“CBD businesses are already facing a challenging environment, with lower foot traffic, reduced discretionary spending and rising operating costs.”
He added that removing commercial properties to make way for the square could create further difficulties for nearby businesses trying to remain viable.
The project has also attracted criticism from other business and property groups. Property Council of Australia Group Executive Matthew Kandelaars questioned whether accelerating the development was the right priority in the current economic climate.
NSW Premier Chris Minns has also publicly expressed reservations, saying it was “hard to see why this project is such an urgent priority for Sydney.”
The City of Sydney has defended the proposal, maintaining that the project is fully funded under its long-term financial plan and that the projected deficit is a one-off accounting outcome linked to the write-off of buildings earmarked for demolition.
A council spokeswoman said operating surpluses were expected to return the following year and that the city’s long-term financial forecasts remain positive.
The Town Hall Square project has long been championed by Lord Mayor Clover Moore, who earlier this year successfully pushed to bring construction forward to 2028 despite earlier advice from council staff that the project should not commence until 2035 because of concerns about its financial impact.
Source: The Australian
