Chapel St: Traders furious over Stonnington Council alleged $250K spend on non-local businesses

An inner city council is accused of spending hundreds of thousands of dollars on products from non-local businesses.

Matt Lanigan recently closed his South Yarra cafe Lucky Penny for good. Picture: David Geraghty.

Traders on one of Melbourne’s busiest shopping strips claim the local council has dodged local businesses and splurged hundreds of thousands of dollars of ratepayers money on outside suppliers.

The Chapel Street Precinct has accused Stonnington Council of spending more than $250,000 in the past six months on contractors based outside the municipality.

A letter to the council, seen by Stonnington Leader and raised by Cr Marcia Griffin at its March 15 meeting, calls on the council to make immediate changes to its procurement policy, which is under review.

“While we continue to tackle many challenges over the COVID-19 pandemic, it is now about how we ethically responded that will be felt for decades to come,” the precinct’s directors wrote.

“It is important that we make you aware that an estimated $250,000 has been spent out of the City of Stonnington business economy in the last six months, due to businesses being contacted from outside your municipality.”

“We would like to work together to swiftly solve this issue and ensure funds are being spent where they should be … if there ever was a time to keep your spend in our local economy, it is now.”

Among the contractors allegedly used by the council outside of Stonnington are printing companies and sign manufacturers in Port Melbourne, West Melbourne and Caulfield.

The accusations come after Leader revealed last week more than 50 businesses had closed in the Chapel Street precinct since the pandemic began.

The most recent victim was well-known cafe Lucky Penny, which closed on March 1 after seven years trading on the strip.

Owner Matt Lanigan said the cafe had come to the end of its lease and he was unable to get a rent reduction from landlords to make it viable to continue.
Mr Lanigan also feared the cafe would not be able to survive another potential lockdown due to the virus outbreak.

“The confidence to reinvest money into hospitality just isn’t there, and we can’t trust that we’re not going to get shut down again,” he said.

Mr Lanigan said the pandemic had also made him and co-owner Tavis Rogerson re-evaluate what was important to them, including their mental health.

”We decided our mental health was a priority after the past 12 months we’ve been through,” he said.

“Without JobKeeper it would have been really hard and a lot of hours for us to survive another winter.

“We had an opportunity to get out, and that was better for us, because we could focus on our passions, which have changed in the past 12 months”.

Lucky Penny was the eleventh cafe or takeaway food outlet to close on Chapel St since the pandemic hit a year ago.

Chapel St Precinct general manager Chrissie Maus said 48 businesses had closed in the precinct in the past 12 months, but 61 new businesses had opened.

Ms Maus said she was “seriously concerned about the mental health and wellbeing of our community, business owners and workers”.

“Now more than ever is it important to support your local faves so they can climb out of COVID debt,” she said.

Stonnington Council has been contacted for comment.