By Cameron Houston and Lachlan Abbott
Melbourne’s oldest gentlemen’s club has moved to block a plan by Sydney billionaire Justin Hemmes to transform a CBD car park into a “hospitality, entertainment and creative wonderland” at the city’s famed Paris End.
In February, Hemmes’ Merivale Group bought the eight-storey car park from the City of Melbourne for $55 million and unveiled contentious plans to build a multi-level precinct with a boutique hotel, restaurants, bars, galleries and a sky garden.
An artist’s impression of Justin Hemmes’ plans for 34-60 Little Collins Street. The Melbourne Club is located amid the large trees in the bottom-right corner.Credit: Merivale
But the hospitality mogul now faces fierce opposition from the Melbourne Club, which plans to use a long-held option – a legally enforceable right – to acquire a 50 per cent stake in an existing lease of the Little Collins Street car park that has another 12 years to run.
A source at the exclusive gentlemen’s club, which has observed a long-held convention of not discussing its affairs with the media, said it was unlikely to negotiate with Merivale to end the lease.
The club, which has occupied its premises at 36 Collins Street since 1859, counts some of Melbourne’s most powerful corporate figures, lawyers, doctors and former politicians among its membership of about 1500. Many of these members and their guests use the car park at 34-60 Little Collins Street.
The rear of the Melbourne Club, including a private garden listed with the Victorian Heritage Register, sits metres from Hemmes’ proposed redevelopment. The billionaire’s proposal has incensed many of the club’s members.
The car park is leased by major property fund Dexus, which has control of the site until 2037. Dexus was expected to negotiate a financial settlement with Merivale to terminate its lease, which would have enabled the project to proceed once planning approval was granted by the city council.
The Melbourne Club (at right, behind fence) is directly across the road from the proposed developmentCredit: Wayne Taylor
At a private meeting on March 31, Melbourne Club members voted overwhelmingly to exercise the option, which will cost the club about $5.5 million.
A club insider confirmed the plan unveiled by Hemmes and Lord Mayor Nick Reece had caused consternation among members over the potential loss of amenity at the top end of Collins and Little Collins streets.
Another source familiar with the vote, but not authorised to speak on behalf of the Melbourne Club, said the club had not been adequately consulted by Merivale and “will do what it takes” to stop Hemmes’ plan.
Trees and a tall wall obscure the view of much of the current car park from the Melbourne Club garden.Credit: Luis Enrique Ascui
“They’re more than willing to stand up to him ... They’ve definitely got the funds, and they also have access to some of the city’s best lawyers if it comes to that,” the source said.
A Melbourne Club spokeswoman declined to comment. A spokesman for Dexus also declined to comment.
Any delay to the Merivale project could deliver a major blow to the council’s plans to revive the top end of Melbourne’s CBD, which has been battered by strict lockdown orders during the pandemic, a shift towards working from home and a slump in consumer spending.
Reece had insisted the redevelopment would cement “Melbourne’s future as a hospitality tour de force”, while also creating hundreds of jobs and generating millions of dollars for the local economy.
“This deal is the right move to propel our hospitality scene even further – adding to our extensive collection of venues, driving visitation and cementing Melbourne’s reputation as the best place to do business.
“It’s a huge vote of confidence that Merivale has chosen to invest in Melbourne,” he said.
But the council has come under fire over its handling of the sale, which it approved on February 25 despite objections from three of the 11 members.
At the time, The Age revealed Cr Owen Guest, who holds a doctorate in finance and is a former fund manager, had voted against the deal with Merivale and had accused his colleagues, including Reece, of “selling the farm to pay for the silverware”.
Guest – who was elected to the council in October and is head of its finance, governance and risk committee – said he and others were concerned that the full value of the car park had not been realised.
“They’ve picked this up for a song, and I think that will be clear in the value of the land in years to come,” he said.
Hemmes, who is yet to receive planning approval for his proposed hospitality precinct, is due to settle on the property in June.
In February, he said the project would be an “incredible addition to the fabric of Melbourne”.
Merivale chief executive Justin Hemmes.Credit: Steven Siewert
“This is our boldest and most innovative project that we have embarked upon to date, a vision that I’ve been conceptualising and refining for a decade,” he said.
Melbourne City Council declined to comment on Sunday.
This masthead understands that the council informed Merivale of the option held by the Melbourne Club before the sale of the site.
Hemmes and Merivale did not respond to requests for comment on Sunday.
An earlier investigation by this masthead revealed allegations of sexual harassment and a toxic workplace culture in the Merivale hospitality empire. The 52-year-old billionaire’s company also agreed to pay $19.25 million to former staff last year following allegations they had been underpaid.
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