Hunter Sports Centre expansion: Lake Macquarie City Council approves $42 million tender for Glendale project despite cost blowout

Councillors wrestled with whether to put their hands in the ratepayers' pockets, some concerned with a decade of financial burden moving forward, others arguing the facility would become nothing more than a white elephant if they turned millions of dollars in state and federal funding down.

As construction costs skyrocket, initial cost projections have increased from $39.4 million to $52.6 million for the expansion, warm-up and athlete testing facility and NSW Trampoline Centre of Excellence at Glendale.

Ultimately, councillors voted to award the $42.6 million tender to a Sydney-based construction company on Monday night.

"This is a once in a generation opportunity, this money will not get back to us," Cr David Belcher said.

"With these state and federal funding grants, we won't get another opportunity, this is it - unless we as a council are ready to in 10 years time pony up $42 million of our own money, this is it.

"We would do a disservice to our community if we let this thing slip through our fingers because we were hesitant about making a large decision."

Council received four tender bids to build the expansion, based on the successful tenderer Grindley Constructions Pty Ltd, the cost has grown by 34 per cent in the last 18 months.

Construction costs, supply chain issues and inflation have all contributed to the price hike, combined with an increase in allowances and contingencies initial projections of $39.4 million have increased by $13.1 million.

The ambitious project will see a three-storey extension at the end of the existing building, kitted out with a new function room, two multi-purpose rooms, a commercial kitchen, amenities, offices and a cafe lounge on the ground floor.

Upstairs the centre will boast health and fitness facilities with a gym, two group fitness rooms and changerooms with a dedicated space for management to run large events on the third floor.

The existing HSC building is also set for a face lift, council's plans include a new creche, ventilation and building management systems as well as new lining and insulation in the gymnasium.

Council's funding sources don't meet the increased costs, requiring a further loan of $12.3 million.

It's expected the centre will cost an extra $2.1 million to run each year for the next decade.

Cr Jason Pauling voted against the project, arguing the inflated price tag could see the council reaching for a special rate variation in the future.

"I have agonised over this for quite some time, the government has given us some money and we need to find the rest, so the risk is ours if this thing goes off the rails, it's on us," he said.

"I don't really want to hand back a couple of big cheques, I'd rather it wasn't like that, but going back to the point of being open, transparent and honest, I can't put my hand on my heart and say this is a good call.

"If this goes off the rails, I certainly want to be able to say to ratepayers, 'I was on the right side of this one'."

Cr Nick Jones shared his financial concerns, telling the chamber, "straight off the bat, this number does scare the hell out of me".

"It's a huge amount to spend on one single project," he said.

The federal government has coughed up $10 million for the project, with a $12.5 million kick-in from the state government for the NSW Trampoline Centre of Excellence announced in May, last year.

Both governments have committed a further $1.9 million towards the warm-up and athlete testing facility.

Initial cost modelling of the expansion had HSC Inc repaying a loan of $10.5m, now expected to be closer to $10.8m.

According to the council, the project will generate $16.4 million in regional income each year, bringing with it 35 full time jobs in its first 12 months.

The trampoline centre is expected to generate $1.4 million in event tourism each year with 78,000 visits from users.

Despite the financial concerns, Cr Madeline Bishop said the council can't put a price on wellness.

"I don't mean just physical but mental, this is a holistic way of approaching our city's health," she said.

"I agree with the financial considerations and I too have struggled with some of them, but I stand by my decision to support this.

"We just need to step off the precipice and do it."

The council hopes the expansion will help it forge a partnership with the University of Newcastle, offering study opportunities at the athlete testing facility.

The centre expansion is expected to be complete by late 2023 to early 2024 with the warm-up facility and athlete testing building finished mid-year.

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