PricewaterhouseCoopers say a package of developments worth $60.8 million on Mount Buffalo including a cafe in the heritage-listed chalet are feasible ideas, but that “in order to attract the required level of private sector investment, a firm commitment and a capital contribution from the Government needs to be obtained”.
The firm was commissioned in May by Alpine Council to identify which of seven concepts in the “Vision for Mt Buffalo”, produced by a government-appointed advisory group last year, could be realised.
They found the majority of concepts were considered appealing to the private sector, but there should be a staged approach to developing the Vision for Mount Buffalo, commencing with the following concepts:
Cafe in the chalet
Under a 21-year-lease, the cafe in the front of the chalet would operate 365 days and is considered a “first critical step”.
Total capital cost would be just over $2 million, producing a net profit of $113,633 based in a high-demand scenario.
A 50 metre glass-bottomed walkway that traverses across the granite rock gorge of Mount Buffalo, located at Crystal Brook, would cost $12.2 million, with net profit $267,612 in the first year.
PwC concluded “Whilst there does not appear to be sufficient revenue generation to instigate this concept privately and feasibly, the opportunities for broader regional and mountain visitation could make this ‘key market attractor’”.
This concept “analyses the commercial feasibility of 10 low-impact, sustainable eco-pods that are assumed to be pre-fabricated off-site and located at Lake Catani” and the Taskforce also floated Cresta Valley as a location.
It would be considered attractive to a private operator, with a capital cost of $1.4 million and net profit of $137,115 in year one.
Dingo Dell Outdoor Centre of Excellence
An educational centre providing camp-style offerings for schools was considered attractive to government, with a capital cost of $13.6 million and net profit in year one of $186,697.
In particular, a “food and beverage option in the front of the Chalet as the first immediate stage, combined with the Wilderness Eco-Pods are appealing both conceptually and commercially, and would be strong contributors to the local region”.
The Gorge Skywalk and Dingo Dell Outdoor Centre of Excellence, “whilst they do not produce risk adjusted returns that would be considered highly appealing by the private sector”, were seen as desirable opportunities by PwC.
The concept of a boutique hotel in the chalet, that would repurpose 95 per cent of the existing building but did not include, which differs from the Vision, a spa hotel, was still deemed feasible but was not recommended by PwC as a first priority, along with the Cresta Valley Activities and Events, and Mountain Gateway concepts.
“At a total capital cost of $38.7 million, the Chalet redevelopment concept does not produce a positive financial return in its own right … the benefits of this concept will outweigh the costs if each adult Victorian resident values the Chalet at $0.08 per year,” consultants wrote.
“The development of an initial stage of works (42-room hotel & restaurant) would not detract from the future development of the entire Chalet hotel and Village development”.
PwC consultants concluded that the market is “clearly attuned” to risks associated with such developments, and that “at this early stage of the whole-of-mountain development Vision, the private sector is unwilling to dedicate significant resources and investment due to the challenges associated with the mountain in its current state … and that a firm Government commitment to address these areas would be needed in order to attract private sector investment”.
The report also looked at other challenges including leasing and and options for powering the chalet.
Supplying in-ground high voltage mains power to the Chalet was costed at $11 million, which was considered too high.
An assessment by HIP V. HYPE Sustainability “infers that it is possible to service each activation concept using locally-generated sustainable energy” but further design work would be required.
Alpine Council chief executive Charlie Bird said the council, which is represented on a taskforce formed last year when $200,000 was allocated by the state government for the PwC study, was already working on some of the planning restraints identified in the report.
“The current zoning up there is public conservation and resource zone and this appears to be an anomaly in the planning scheme because it does not permit activity or developments that previously occurred at the chalet,” he said.
“There needs to be an amendment to allow a cafe in the chalet … we’ve been working with the (state planning) department and are confident we’ll resolve that in the near future.”
Mr Bird said the council were advocating for funding to establish a cafe in the chalet.
“That will reconnect people to the chalet, build confidence with business operators and investors, and act as a catalyst for future investment,” he said.
“Ideally there would be a commitment made prior to the election … if we could have something operational by December 2019, that would be great.”
Independent Ovens Valley candidate Tammy Atkins said there should be a realistic approach to the project.
“Some of the ideas are quite out there and it’s great not to be constrained in our thinking, but now it’s a matter of bringing it back down to the ground – get the cafe done and then see where we’re at,” she said.
“I absolutely support $2 million to get a cafe up there, and am happy to include that as a key project I’ll follow up, should I be elected in a fortnight’s time.
“By being an independent, I’ll hold either side to account to their promises.”
Wangaratta’s Richard Rhodes, among a group campaigning the government to fully restore the chalet as a first priority, said 12,116 signatures on their petition showed the community had already demonstrated what should happen on the mountain.