Delay in InterContinental Hotel construction at Parramatta amid Metro West tunnel concerns
Western Sydney has suffered a major blow ahead of the new airport’s opening, with fears the construction of Parramatta’s first five-star hotel will compromise Metro West tunnels.
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Western Sydney has suffered a blow in its bid to open Parramatta’s first five-star hotel in time for the new airport’s first flights, with construction frozen on the landmark project.
Work has been halted following Sydney Metro’s claim that the developer behind the InterContinental has not yet achieved consent to build over a rail corridor.
Under planning rules, all new developments above metro tunnels must have consent from Sydney Metro before beginning construction.
Holdmark Property Group – the developer behind the luxury hotel – completed demolition work in 2023 at 197 Church St after the local council gave permission.
However, it must seek separate consent from Sydney Metro to begin excavation works and start construction of the 32- and 23-storey hotel and commercial block.
A Sydney Metro spokesman said it was working with Holdmark to ensure the hotel did not compromise the underground work.
“At this stage, the owners of 197 Church St have not been able to provide assurance to Sydney Metro that the new development does not compromise the future tunnels,’’ he said.
“Sydney Metro will continue to work with the owners of 197 Church St to achieve a suitable design outcome that preserves the safety and viability of Metro West tunnels.’’
The long delay has puzzled many because Holdmark has worked with Sydney Metro since 2022, when the hotel site was identified as one for the tunnels.
A Holdmark spokesman said the developer had regularly communicated with Sydney Metro since early 2022 and modified plans to suit the metro project.
“Holdmark’s technical and commercial teams have engaged co-operatively and extensively with Sydney Metro West since it first identified 197 Church St as a potential rail corridor works site in 2022,’’ he said.
“We have committed to extensive modifications of the hotel floor plans and a range of other technical solutions, including contributing towards the strengthening of the tunnel beneath the site, to ensure that both the hotel and metro project can be delivered safely.’’
He said the company looked forward to resolving any outstanding issues “as soon as possible” and progressing the landmark development.
It is understood Sydney Metro will need to address other concerns outside the hotel site before reaching an agreement with Holdmark.
The major delay will push the opening of the hotel – originally slated for 2025 – back by at least three years, after the opening of Western Sydney Airport in 2026.
Business Western Sydney executive director David Borger acknowledged Metro’s “paramount” safety concerns but called for decisions to be made quickly to accommodate the “famous global brand” of the InterContinental.
“We’ve got the Powerhouse opening in the next couple of years. It will be the biggest tourism asset we’ve got in Parramatta,’’ he said.
“There will be blockbuster exhibitions and shows there, and it’s the perfect time for hotel capacity to come online, and we just don’t want to miss this opportunity.’’
He said 16 development applications for hotels had been lodged in Sydney ahead of the new airport opening, with 1000 of the 8000 beds to be allocated for cabin crew.
He said the InterContinental was “the biggest brand to come to town”.
Holdmark signed a management agreement with IHG Hotels and Resorts in May 2021.
The Holdmark spokesman confirmed it would still deliver the “beautiful addition to the Parramatta skyline”, also boasting a ballroom, swimming pool, gymnasium, restaurant, rooftop bar and 900sq m of meeting space for functions.
“Holdmark remains fully committed to delivering Parramatta’s first five-star hotel that will provide hundreds of jobs and become a magnet for further investment in the CBD,’’ he said.
“By partnering with one of the world’s finest luxury brands in the Intercontinental, it ensures that Parramatta will become a global destination in its own right.’’
The hotel is set to generate 1000 jobs in construction and 360 permanent hospitality, retail and administration roles.
It's not the first time a swanky hotel’s future has been in jeopardy at Parramatta.
Before plans for the InterContinental were announced, the city was also anticipating the opening of a 245-room Hilton by 2025.
Ledrae Hotels, which signed a deal with Hilton in 2018 to build the hotel at the corner of Macquarie and Marsden streets, blamed Covid for delays.
But six years on, not even demolition work has kicked off.
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