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Owners says Summer Street hotel will go ahead, but plans being tweaked after construction costs soar
April 26, 2024
By Peter Holmes
The owner of The Village on Summer Street says the proposed hotel at the front of the shopping will be built, but only when commercially viable.
Paul Saunders from BMPS88 was responding to a story in The Orange News Examiner about the closure of cafe, bakery and gelato shop Billyliks.
Shop owner Matt Chimenti said a number of issues had forced him to exit the business after 18 months. They included price spikes for ingredients and other business expenses, difficulty in finding staff, and the lack of action on the hotel.
Saunders said “there was a little thing called Covid” that got between his dreams and the reality of constructing the hotel, which was first announced in 2020.
Covid not only put the brakes on people being able to gather and to travel, but also on international trade.
Australian bans on foreign and interstate travel, and lockdowns in place during stages of the pandemic, gave Orange a short-term tourism boost, but it was only ever going to be a sugar hit.
As governments worldwide wrestled with the best way to keep people safe while ensuring economies stayed afloat, supply chains were broken, which made it more difficult to source building materials.
When demand eventually returned, the supply wasn’t there, which put inflationary pressure on material prices. Then came staffing issues - finding enough skilled tradespeople to do the work.
Saunders said the cost of the refurbishment at the The Village on Summer, announced 18 months into Covid in August 2021, had blown out by $500,000. He also said the centre contributed towards the fit out at Billyliks.
The centre was placed on the market midway through 2022.
Saunders stressed that all tenants at The Village on Summer signed leases including a disclosure statement about the hotel - that it was still planned, but would only go ahead when commercially viable.
When the hotel project was announced, it came with a budget of $25 million. Saunders said that had blown out by 50 percent - to $37.5 million - in just a few years.
“I could go and buy a building for that,” he said.
Budget blowouts on major projects have become a common theme in Orange since Covid, with the sporting precinct going from $25 million to $59.5 million in four years and the Orange Regional Conservatorium breaking its $25 million budget by $8.5 million late last year.
The con shortfall is to be funded by Orange ratepayers, whose contribution to the $33.5 million project has risen from $10 million to $18.5 million.
Last September The Orange News Examiner reported on the number approved hotel-motel developments where construction was yet to commence.
Saunders said a “hotel is the way to go, there is a lack of accommodation and the opportunity in Orange is still there”.
But finding a way of recouping the extra $12.5 million via hotel room nights was a significant challenge, he said.
“I’ve got some alternative plans - we’ve scaled it down a bit, looking at lower rise. We’re looking at a laneways concept, breaking it down into smaller buildings, but that’s all in the future.”
He said the Billyliks site would work well as business focusing on coffee.
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