New RAH: Moving hospital will cost East End millions of dollars in lost revenue
MOVING the Royal Adelaide Hospital across the CBD will cost the neighbouring economy it leaves behind millions of dollars unless “substantial” redevelopment occurs, an official study has warned.
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MOVING the Royal Adelaide Hospital across the CBD will cost the neighbouring economy it leaves behind millions of dollars unless “substantial” redevelopment occurs, an official study has warned.
A confidential economic assessment report, commissioned by Renewal SA, has been obtained by The Advertiser after a year-long battle under Freedom of Information laws.
The 58-page document, prepared by a leading consultancy firm, concludes that without any major new development on the prime North Tce site, some of the city’s busiest retail areas will suffer.
The report warns that with almost 6000 workers and students estimated to be leaving the area, there could be a “direct impact” worth at least $9.5 million a year in lost turnover to nearby businesses, dozens of job losses and fears some will lose up to a third of trade.
The report, completed in February last year but released only after an intervention from the state Ombudsman, also warns of a dip in some property values, reduced rental levels of up to 5 per cent and falling council rates revenue.
The study, undertaken by Fyfe, concludes that while the overall impact is predicted to be “quite modest”, many cafes, restaurants and retail shops will be “seriously” hit.
“The relocation of the RAH and related activities to a new site in the West End will result in the transfer of a major workforce and their associated economic activity out of the East End, with anticipated negative consequences for ... traders,” it concludes.
But the report, titled Royal Adelaide Hospital Relocation, local economic impact assessment, says any “impact would be reduced should any reuse or redevelopment of the hospital buildings” occur.
“A substantial reoccupation or redevelopment of the vacated RAH space that incorporates high spending user groups could successfully replace the foregone turnover,” it says.
The State Government called for expressions of interest in July to redevelop the seven-hectare site once the new Royal Adelaide Hospital opens in 2016.
Apartments, businesses and shaded gardens are among its ambitions for the old site after it selected an alternative for a new city high school.
But the economic impact study, which cost taxpayers $77,440, adds weight to community fears, revealed by The Advertiser last year, that the site could become a “white elephant”.
Researchers interviewed local businesses, property owners, hospital staff, visitors, students, university workers and community leaders in late 2013. Adelaide City Council and Department of Premier and Cabinet bureaucrats were also consulted.
But just half of the businesses, employing an average five workers, were willing to discuss their private finances, suggesting the impact could be greater. The total area generates almost $175 million a year in revenue.
Workers said they mainly visited Rundle St and Rundle Mall. The report found the average yearly spend in the area was almost $3150.
Renewal SA chief executive John Hanlon said the report showed the site’s importance to the area, “which is why delivering economic benefits is an essential part of the expression of interest”.
“It is essential that the plans provide a significant number of opportunities for people to live and work on the site,” he said.
A similar study, undertaken by the same authors for the city council, was revealed by The Advertiser in June. It raised concerns that the move west would not bring economic prosperity.
The workers moving to the new RAH and biomedical precinct could contribute $17 million a year to the West End economy, it found.
But commercial space will more than double to 2700sqm in the new hospital, giving workers less incentive to venture outside.
The impact
What workers do in the East End
· Stopped for a coffee (50%):
· Lunch, restaurant, cafe, lunch bar (47%)
· Retail shopping (45%)
· Coffee, takeaway (45%)
· Lunch, takeaway (45%)
· Drinks, hotel, bar or pub (29%)
· Dinner, restaurant, cafe, pub (29%)
· Theatre, concert, cinema (14%)
· Business services (11%)
· None (42%)
Where a loss of turnover will hit (annual in 2018)
Business services: $436,000
Discount department stores: $480,000
Speciality shops (fashion, jewellery): $716,000
Supermarkets: $113,000
Personal services: $398,000
Carparking stations: $727,000
Restaurants/cafes (dinner): $812,000
Pubs/hotels/bars: $743,000
Lunch bars (eat in): $481,000
Convenience stores: $439,000
Lunch bars (takeaway): $1.036m
Restaurants/cafes (lunch): $868,000
Coffee shops/cafes: $2.042m
Theatres/cinemas: $116,000
Meeting venue: $6000
Public Institution: $82,000
Total: $9.495m
What to put on the site (local suggestions):
Higher education facilities (expansion of universities)
Research facilities
Tertiary student accommodation
Primary/secondary school
Private hospital
Medical centre/clinics/specialist medical services
Residential apartments
Office/commercial precinct
Arts/cultural precinct/venues
Entertainment venue
Localised retailing
Parklands extension
Hotel/serviced apartments and
Innovation precinct/start-up research
* Report assumes no reuse or redevelopment
Source: State Government
Change on the menu for local cafe
FOR Belinda Eastham, the Royal Adelaide Hospital’s move west will have an immense impact on her business.
The 25 year-old is the manager at Foodtopia, a cafe across the road from the existing hospital site. Hospital staff, patients and visitors form most of its trade, along with regular customers and catering orders for meetings.
“It will be a big loss for the business,” Ms Eastham said. “We don’t tend to get uni students, so all of our customer base is from the hospital.”
The cafe serves at least 300 people per day, with many coming in multiple times during the day.
“Our regulars are all pretty worried that we’re not coming down there (to the new RAH site) with them,” she said.
Ms Eastham said the owners considered relocating the business to the opposite end of the North Terrace but decided they will wait until the hospital relocates.
She said they have already felt the pinch of a tightened hospital budget.
Foodtopia currently employs three full-time staffin the cafe and five casual staff in the kitchen.
“We’ll still have the hours for staff but fingers crossed it doesn’t just completely die down,” Ms Eastham said.
She hopes planned construction will create business.
- Jade Gailberger