Blacktown Council proposes raising rates every year for 20 years to fund $400m council office buildings

Sydney’s most populated council is planning to sting residents with sharp rate rises every year for the next 20 year to build two new office buildings for its own staff – a move slammed by critics as ‘unpalatable’ and ‘unjustifiable’.

A western Sydney council is planning to hit residents with a 20-year rate rise to raise more than $200m towards building two new council office buildings for its own employees – a move critics have labelled “unpalatable” and “unjustifiable” in a cost of living crisis.

More than 100,000 ratepayers in the Blacktown Council area could be stung with rate rises of 3.9 per cent every year for the next two decades to bankroll the construction of the two new office administration buildings in Rooty Hill and Blacktown.

The construction projects comes after the council sold its existing Blacktown office headquarters – along with three other council-owned sites – to Sydney based developer Walker Corporation in 2023.

The sale was made to clear land for the Walker Corporations’ $2 billion redevelopment of the Blacktown CBD which will see new units, public spaces and commercial offices developed in the town centre.

But since the council agreed to the sell-off, the estimated cost of building replacement council offices has soared from $153.4m to a staggering $400m which the council says has triggered the need for a “modest” rate rise.

The council has proposed to build two new office buildings for its staff.

According to the council, the budget blowout was partly due to “design changes” as well as further investigations into the conditions of the two development sites.

A council spokesman said the new offices were an “important investment” for the council and will enable “council to work more efficiently and effectively”.

A concept image of the Walker Corporation’s Blacktown redevelopment project.

But the proposed rate rise has already sparked dissent from some councillors, including Liberal Jess Diaz who described the two-decade fee hike as “unpalatable”.

“There’ll be a very big backlash from the community and it’s totally uncalled for in the current climate when residents are already struggling financially,” he said.

“If the rate rise was going to infrastructure that residents expect from the council like roads or footpaths that actually have direct benefit for residents it may be justified but it’s not.

“As a council, we have to live within our means and not burden residents who are already feeling pain now with the cost of living.”

The rate rise would impact ratepayers across the Blacktown Council region.

Council documents show around half of the $400m construction cost is expected to be funded from its land sell-off which has generated $206m in revenue.

The council has proposed entering into a $200m loan to fund the remaining cost and the 3.9 per cent rate rise would help fund loan interest repayments which is expected to tally around $164m over the 20 year period.

A council report stated the council was “not able to fund the cost of both office buildings without” the rate rise.

The council’s headquarters which it sold to Walker Corporation in 2023.

“Given this importance, our (rate rise) application will focus on how the overall required rate increase can be staggered over multiple years to reduce the financial impact on our ratepayers, while at the same time providing sufficient revenues to enable funding construction of both office buildings as expediently as possible,” the report stated.

A spokesman for the council said the previous $153.4m estimated cost of the office projects “only accounted for initial raw construction costs, prior to detailed site investigations cost breakdown and before project management, fees, consultancy and other costs”.

He said the new office buildings would help support the delivery of services to the growing Blacktown population.

Blacktown councillor Jess Diaz.

“As delivery of essential council services has grown, the council has outgrown its 60-year-old administrative centre,” he said in a statement.

“The new staff facilities will enable the council to work more efficiently and effectively, attract talented staff and ensure we can continue to meet the needs of Blacktown City’s growing population.”

A final decision on the proposed rate hike has not been made and will still require support from a majority of councillors.

It would also require approval from the Independent Pricing and Regulatory Tribunal which assesses whether councils can lift rates above annual CPI increases.

If supported, the rate rise is proposed to come into effect from the 2026/27 financial year and remain in place until 2046/27.