Newcastle Art Gallery will receive an injection of $35.6M to help expand the building and open up space for more art and international exhibitions.
The 44-year-old building only allows 1 per cent of the collection to be exhibited over the course of a year, with more than 7,000 works valued at $115M.
The gallery is home to the most valuable collection in regional Australia, including works by Arthur Boyd, William Dobell, Donald Friend, Tracey Moffatt, Margaret Olley, John Olsen, Patricia Piccinini, Gwyn Hanssen Pigott and Brett Whitely.
City of Newcastle committed $16.2M towards the expansion project, including $3.6M already invested.
A financial report considered by Council on Tuesday night concluded a fixed interest rate of less than 1 per cent presented a pathway to fund the expansion.
“An expansion of the gallery has been discussed for 16 years, with more than $10 million raised by the community to support the project,” Lord Mayor Nuatali Nelmes said.
“I’m pleased to say that City of Newcastle staff have identified a funding pathway to more than double the size of this wonderful community asset and make our shared dream a reality.
“With the current favourable economic conditions, including historically low interest rates, the time has come for City of Newcastle to make this project happen.”
Significant funds are also being held in trust with the Newcastle Art Gallery Foundation Board for expansion, including a $10M bequest from Valerie Ryan, a commitment to additional community fundraising of $2.5M and $500,000 from the Margaret Olley Art Trust.
Council has evaluated various options, including using cash reserves and external loans with the various options compared to their Net Present Value (NPV).
Estimates showed that borrowing up to $22.6M from NSW Treasury Corporation over
10 years at all-time low-interest rates outweighed the benefits of using their own cash reserves.
City of Newcastle will continue to seek federal and state grant funding before taking out the loan, ensuring all available grant funding options have been exhausted.
The approved development application includes expanding the gallery, providing modern facilities such as a new café and a retail shop, a multipurpose and educational program space, improved display and a secure international-standard loading dock.
An additional 1600 square metres of exhibition space will have dedicated areas for the gallery’s collection on the lower level. The upper level will cater to various travelling exhibitions, including international shows.
The project is expected to inject more than $1M into annual regional revenue, attract more than 14,000 local visitors and tourists each year, and create 170 jobs, including 152 construction workers and 18 ongoing jobs on completion.
A tender report will be submitted to council later this year, seeking approval to award a construction contract.
Information source: Media release, July 22, City of Newcastle