4.1
The Australian Broadcasting Corporation (ABC) seeks approval from the Committee to proceed with its proposed project, the fit-out of Parramatta and Ultimo Offices in Sydney, NSW.
4.2
As the national broadcaster, the ABC informs and entertains Australian audiences through radio, television and online content. ABC headquarters are located at 700 Harris Street, Ultimo, NSW. This site is spread across two buildings owned by the ABC (Tower A constructed in 1988 and Tower B constructed in 2002) and is close to Central Station and the Sydney CBD.
4.3
The Ultimo offices are reaching end-of-life. The ABC plans to reorganise the two tower buildings at 700 Harris Street. ABC workgroups will be redistributed and workspaces will be refreshed with new office fit-outs. The vacant space (several floors) can be leased out and create a revenue stream for the ABC. Simultaneously, the ABC plans to take out a lease and subsequent fit-out at a new building in Parramatta, NSW - an area known as Sydney’s second CBD – to house 300 staff and production facilities. The cost to lease and fit-out the new Parramatta offices will be offset by the income generated by leasing out the vacant space in the Ultimo buildings and selling another property at Artarmon on Sydney’s North Shore.
4.4
This project is in line with the ABC’s Five-Year plan which aims to have more than 75 per cent of content makers outside of the ABC’s Ultimo Office by 2025. In line with this plan the project will afford the ABC the opportunity to become more connected, relevant and engaged with communities across Sydney.
4.5
The estimated cost of the project is $43.6 million (excluding GST).
4.6
The project was referred to the Committee on 27 September 2022.
Conduct of the inquiry
4.7
Following referral, the inquiry was publicised on the Committee’s website.
4.8
The Committee received two submissions and one confidential submission. A list of submissions can be found at Appendix A.
4.9
On 1 November 2022, the Committee conducted a private briefing, public and in-camera hearing via teleconference. A transcript of the public hearing is available on the Committee’s website.
Need for the works
4.10
The ABC wants to move more content makers out of the Ultimo headquarters. The establishment of a presence in Parramatta will support the ABC’s intention to become more relevant to a larger proportion of Australians. Greater Western Sydney is a diverse community, home to almost half of Sydney’s population, it is also Australia’s third largest economy. The ABC’s move to the area will support its ability to better engage with local communities.
4.11
ABC Managing Director Mr David Anderson explained to the Committee:
With 2.6 million people, Greater Western Sydney is Australia's fastest-growing region. We have, of course, always had a Western Sydney presence, but the growth of the region and its increasing significance mean there is a compelling case to make this even bigger. The decision to establish a new bureau in Parramatta and relocate up to 300 ABC staff from Ultimo to Parramatta was therefore an obvious step for us. We'll be telling more stories from Greater Western Sydney, where one in every 10 Australians lives.
4.12
Coinciding with the ABC’s intention to establish a presence in Parramatta, the ABC are seeking refurbish its Ultimo Headquarters due to end-of-life. This refurbishment will enable the ABC to better utilise the site’s office space and to introduce activity-based working and accommodate an increase in hybrid working arrangements.
4.13
ABC Managing Director Mr David Anderson explained how the existing facilities at Ultimo will be reconfigured:
We have two buildings in Ultimo. In building A there are seven floors and in building B there are 14. We're looking at taking the top seven floors of the 14-storey building and putting them into the bottom seven floors across both buildings. That requires us to a fit-out works, moving from offices and all the design spaces to be better used, more efficiently used, across that space.
4.14
At the public hearing there was a discussion on whether the 300 staff relocating from Ultimo to Parramatta could in fact still be retained in the refurbished space at 700 Harris Street.
4.15
Mr David Anderson explained to the Committee that it would be difficult to keep the 300 staff (who are expected to move to Parramatta) in Ultimo:
[…] because the way we are configured at the moment is in part administrative and in part production specific and production related. […] as to the way we're going to use the space, after those 300 people relocate—those being the Sydney newsroom, as well as Radio Sydney, which need dedicated production facilities.
4.16
The ABC provided clarification through questions on notice, putting:
The most recent manual assessment identified 2,181 work points (including workstations and offices) in Ultimo across the entire building floorplate. After the refurbishment has been completed, there will be 1,751 work points across the consolidated floorplate of Ultimo for ABC use.
4.17
However, the ABC reiterated in questions on notice that despite the refurbishments to Ultimo the goal was to move 300 staff to Parramatta – in order to deliver the Five-Year plan objectives, including:
[…] the objective of 75 per cent of content makers based outside of Ultimo and reflecting contemporary Australia. The decision to establish a new bureau in Parramatta and relocate up to 300 ABC staff from Ultimo to Parramatta, will boost the ABC’s presence and effectiveness in Greater Western Sydney.
Options considered
4.18
The ABC engaged Jones Lang LaSalle to conduct a market approach through a request for tender process to identify possible suitable locations for the ABC’s office in Parramatta.
4.19
Twenty-one potential facilities were reviewed, with four shortlist options including:
6-8 Parramatta Square – Promenade and Level 39
60 Station Street – Part Ground, Level 1, Level 18 and 19
2-12 Macquarie Street – Ground floor and Level 2
6 Hassall Street – Ground floor, Level 10 and 11.
4.20
The ABC assessed the possible options based on the following factors:
ability to establish a public presence to support community engagement activities
sustainability credentials
proximity to public transport
overall commercial offering.
4.21
At the conclusion of this process 6-8 Parramatta Square was determined as the preferred option. Reasons for this choice included:
the ability for the public to view on air programs
a 5.5-star NABERS energy rating and 4-star NABERS water rating
proximity of the rail station, bus links and light rail as well as parking for the ABC’s fleet vehicles
the central location in Parramatta
ability to offset the lease from using revenue from the leasing out of 7 levels of the ABC’s Ultimo premises.
4.22
The ABC entered a Heads of Agreement for the lease of 3,106sqm across two floors of 6-8 Parramatta Square. The initial agreement is for a fifteen-year term, with two five-year extension options.
4.23
The lease includes office space on level 39, and a presence on the ground floor which is known as the Promenade. The Promenade provides a publicly visible space which will encourage local community engagement.
4.24
The ABC provided further information in their confidential submission to the Committee detailing options available for the project in relation to both the Ultimo Headquarters and the Parramatta office.
Scope of the works
4.25
The fit-out of the 6-8 Parramatta Square office will include 2,356m2 of office space on level 39 and 750m2 on the Promenade. The fit-out will accommodate 300 staff across the two levels.
4.26
Scope of works for the fit-out will include:
213 traditional work points
46 open individual and group work settings
15 meeting and focus rooms
floor finishes: provision of new carpet tiles for the general office space, and vinyl for kitchenettes and feature areas
wall finishes: painting of walls and provision of whiteboards, acoustic lining and wayfinding graphics
ceiling finishes: ceiling to the main circulation will be removed to expose the soffit, which will be spray painted and feature ceilings such as timber batten or grid will be installed in specialist areas such as kitchens
joinery: vertical surfaces will be finished in a coloured or timber-look laminate and kitchen and specialist benchtops will be in a solid-surface material.
4.27
The refurbishment of the ABC’s Ultimo Headquarters will include 15,622m2 of the total 64,894m2 net lettable area, and in the post project period 8,170m2 will be leased out. Approximately 1,700 staff will remain after the refurbishment’s completion, there are currently 2,100 staff.
4.28
The scope of works for the refurbishment will include:
1200 workstations (an increase from the current 1,075)
10.2m2 per work point (a decrease from the current 13.3m2)
337 open individual and group seats (an increase from the current 94)
207 enclosed meeting/focus rooms and phone booths (an increase from the current 39)
408 lockers (an increase from the current 64)
floor finishes: provision of carpet tiles for the general office space and vinyl for the kitchenettes and feature areas
wall finishes: painting of walls, provision of whiteboards and acoustic linings for meeting rooms and specialist areas and wayfinding graphics.
joinery: vertical surfaces will be finished in a coloured or timber-look laminate and kitchen and specialist benchtops will be in a solid-surface material.
4.29
In relation to the scope of works for both parts of the project the ABC included more general scope elements including:
kitchen/staff hub will be designed to accommodate wheelchair access
electrical installations including, electrical supply, metering, distribution, and lighting (the Parramatta tenancy utilises an efficient automated lighting system)
specialist services for studios, including power and data to facilitate space functions
battery operated self-contained emergency lights and exit signs connected to a wireless central monitoring system
emergency warning intercommunication system with accessibility catering to meet hearing impaired requirements
acoustics: noise reduction measures will be implemented including insulated glazed partitions, acoustic ceiling tiles and panels in meeting rooms.
replacement of computer monitors with LED monitors that use less power and replacement of desktops and phones with mobile devices
security measures: a risk assessment will be conducted during the design phase, the fit-out will be informed by the outcomes of the assessment, additionally the fit-out will be designed to perform to a Zone 2 specification, in line with ASIO T4 technical specifications.
4.30
Schematics of the proposed works are included in annexure A of
submission 1.
Community and stakeholder consultation
4.31
Consultation with internal and external stakeholders has already occurred for both the refurbishment at Ultimo and the move and fit-out at Parramatta.
4.32
The ABC explained consultation with staff would continue (as per the ABC Enterprise Agreement), elaborating:
During the Design Development phase of the project, the ABC will undertake interactive design sessions with the ABC’s business areas and affected staff from within these areas. This will allow the ABC to understand the operations requirements of affected teams and how to best accommodate for these throughout the design process.
4.33
No issues of concern were reported by external stakeholders including the Department of Finance, architects, quantity surveyors, developers, property leasing specialists and the Parramatta City Council.
4.34
Engagement continues with the Community and Public Sector Union and the Media, Entertainment and Arts Alliance.
Cost of the works
4.35
The proposed fit-out of the ABC’s new leased premises Parramatta and the Ultimo headquarters has an estimated cost of $43.6 million, excluding GST.
4.36
The Parramatta Office fit-out and lease costs will be paid for via the sub-lease of seven floors of the ABC’s Ultimo Headquarters as well as the sale of aging assets and divestment from the ABC’s facilities in Artarmon.
4.37
ABC Managing Director Mr David Anderson explained:
This project will require no additional taxpayer funding. We’ll fund it through the sale of our property at Artarmon, on Sydney’s North Shore, and by leasing our space in our Ultimo head office.
4.38
The cost per square metre of the project will be $3,513 for the Parramatta office and $1,747 for the Ultimo Headquarters.
4.39
Further details regarding the projects costing were provided in the ABC’s confidential submission and during an in-camera hearing.
Revenue
4.40
The sub-lease of approximately 7,900m2 of the Ultimo Headquarters will generate a revenue stream that the ABC intends to use to cover the costs of the 6-8 Parramatta Square lease.
Public value
4.41
The ABC considers that the public value associated with the project includes:
improvement to operational efficiency
efficiencies from high density and reduction in work point ratios
the ongoing opportunity to lease space in the Ultimo Headquarters
an overall value for money solution
use of existing transport and ancillary services
a long-term commitment to ABC operations in Parramatta
generation of economic activity and local jobs in the delivery of the works
progress in the ABC’s Five-Year plan.
Committee comment
4.42
The Committee recognises the unique role the ABC plays as the national broadcaster. Plans to decentralise the ABC from the Ultimo headquarters will result in more local and diverse content that reflects the lives of more Australians. Parramatta is recognised as Sydney’s second CBD and home to one in ten Australians. The relocation of staff from Ultimo to Parramatta is a significant shift for both audiences and ABC content makers.
4.43
The ABC already owns valuable real estate assets in Sydney including the two buildings in Ultimo and another property at Artarmon. The move to Parramatta is a lease, and not the ownership of an asset. The ABC will not be the only Commonwealth tenant of 6-8 Parramatta Square. The Committee notes that there is increasing use of tenancies across the Commonwealth and considers there could be scope for federally funded agencies to negotiate together when taking out whole of floor leases in the same building.
4.44
Broadcasting has changed significantly since the ABC first started as a single radio service in 1932. Taking a 15-year lease (with optional extensions) provides flexibility for the future. This may allow for adaptations for new technologies, ways of working or building compliance. It may also mean, that twenty years from now the ABC moves on from Greater Western Sydney to a new location. The Committee hopes that the ABC continues to forward plan to ensure that any resources are used wisely and reflect a sensible use of tax-payers money.
4.45
The Committee did not identify any issues of concern with the proposal and is satisfied that the project has merit in terms of need, scope and cost.
4.46
Having regard to its roles and responsibilities contained in the Public Works Committee Act 1969, the Committee is of the view that this project signifies value for money for the Commonwealth and constitutes a project which is fit for purpose, having regard to the established need.
4.47
The Committee recommends that the House of Representatives resolve, pursuant to Section 18(7) of the Public Works Committee Act 1969, that it is expedient to carry out the following proposed works: Australian Broadcasting Corporation – Fit-out of Parramatta and Ultimo Offices.
4.48
Proponent entities must notify the Committee of any changes to the project scope, time, cost, function or design. The Committee also requires that a post-implementation report be provided within three months of a project completion. A report template can be found on the Committee’s website.
4.49
Mr Graham Perrett MP
Chair