Sydney Start Up Hub offices in York Street all but abandoned

A flashy 11-floor government-subsidised office building in the CBD for wannabe entrepreneurs and innovators is all but abandoned, and “taking the mickey out of taxpayers”.

It was pitched as an ambitious innovative precinct for Sydney to rival Silicon Valley in the US, with taxpayers subsidising 11 floors of office space for 1800 people.

But five years on, the Sydney Startup Hub is suffering from empty offices, under-utilised desks and a scattered number of workers.

While the up-market York St building was designed to provide a physical networking space for budding entrepreneurs, it appears the stay-at-home bug in the wake of Covid has hit it hard.

The state government says it is now working with industry to try to get them back in the hub – but it will not say if it has carried out any reviews or business plans to see if taxpayers have received value for money.

The government spent $35 million fitting out the building and has just renewed the lease for the 17,244 square metres of office space, to run until 2027, at a cost of $831 per square metre, not including GST, or $14.3m a year.

A completely empty floor in the 11-level building.

All 11 floors were originally slated for start-ups, with subsidised rents and desk space for 1800, but government departments now occupy the top floor, while many offices are empty and locked up.

On level one of the building, a number of offices with NSW Government Innovation signs are deserted while a scattering of people sit on lounges in the reception area. A previous tenant said many of them had come in off the street, seeking free Wi-Fi.

A few people come in to the reception area to take advantage of free Wi-Fi, a previous tenant said.

IPA deputy executive director Daniel Wild said when governments were looking at more than $100bn of debt, the last thing taxpayers needed was subsidies for empty office blocks.

“This start-up operation is clearly taking the mickey out of taxpayers who are footing the bill for under-utilised, prime location CBD premises,” he said.

“This is yet another reason why governments and bureaucrats should not try to pick winners. Having a start-up hub created by government is like having a steakhouse set up by a vegan.”

Opposition industry spokesman Anoulack Chanthivong said the government had “over-promised and underdelivered” with the hub.

Very little innovation happening in the deserted NSW Government Innovation office.

“This government is asleep at the wheel when it comes to looking after public money,” he said.

Investment Minister Alister Henskens said desk occupancy rates had fluctuated after the pandemic, but there were 338 start-ups in residence at the location.

“Since opening in 2018, a total of 1800 start-ups have been residents of the hub, raising more than $740m in investment funding – creating nearly 6000 skilled jobs,” he said.

“The NSW government is actively engaging with industry to encourage and support businesses to return to the hub, and to promote the work of the three anchor tenants – Fishburners, Stone & Chalk and Tank Stream Labs.”