The state government has signed the deal to buy two-thirds of the GPT Group’s property holdings around the Hunter Street mall for $20million, paving the way for a major revitalisation project in the city’s traditional heart.
The company and government land and property developer Landcom completed the contract yesterday, under which they would also work together to develop four city blocks into a mix of residential, commercial and specialty retail.
A ceremonial signing may take place today.
Under the deal, Landcom would take a 66.6per cent stake in the landholdings for $20million, with GPT to retain the other third.
GPT would support Landcom with its expertise in development and ability to attract third party investment, but would not directly contribute any capital to redevelopment of the site.
The deal comes about three years after GPT walked away from a $600million retail-based redevelopment of the mall, blaming the former Labor government for not committing to removing heavy rail between Newcastle and Wickham.
The company is believed to have paid about $100million for the city properties, but had limited success selling sites after abandoning its project.
In a statement yesterday, GPT Group head of investment Mark Fookes said the ‘‘right urban renewal outcomes’’ would make Newcastle ‘‘one of Australia’s most liveable cities’’.
‘‘Although the optimum urban renewal outcomes for Newcastle still rely on a state government decision on fundamental infrastructure changes within the Newcastle CBD, this partnership means that the footprint for a significant city urban renewal project remains intact,’’ the statement said.
Newcastle MP Tim Owen said he hoped the government’s initiative would convince others to invest or reconsider shelved plans, and that he would continue pushing for the rail line to be addressed as part of a broader plan.
‘‘We said we would get GPT back to the table and we’ve done it,’’ Mr Owen said.
The next element to be considered could be the Newcastle City Council-owned car park on King Street.
It was a key part of GPT’s original plans for the city, but is now for sale by expressions-of-interest.