TOWN HALL'S 10 MIL OF DROUGHT MONEY HAS BEEN WITHDRAWN

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 A $10 million Federal Government grant that was to have helped fund the $90 million Creative Precinct on the Birchalls car park has been withdrawn after the City of Launceston council was unable to reach a funding agreement and a December 31 completion deadline passed.

The controversial Building Better Regions Fund drought grant was made in 2020 under the Morrison Government and directed towards the proposed development in Paterson St.

A Department of Infrastructure, Transport, Regional Development, Communications and Arts spokesperson told The Examiner: "As a grant agreement was unable to be reached, the Department has withdrawn funding for the Launceston Creative Precinct project under the BBRF. "

The announcement came just a week after Mayor Danny Gibson said: "Active and positive discussions with the federal government concerning the BBRF are continuing."

On Friday he said: "A request to modify the grant application was made in March last year, which we understood was still being considered by the Federal Government right up until we received the notification.

"There are a number of issues and options to work through in respect to this project, with the Federal Government's decision on the BBRF grant being the latest of these.

"This withdrawal of funds will naturally reduce the community assets and benefit that can be delivered."

Under terms of round four of the BBRF the council was required to complete the project by December 31, 2022. The grant was specific to the Creative Precinct project and could not be applied to another project or another site.

The withdrawal comes days after the Tasmanian Civil Administration Tribunal ordered the council to provide a permit to Car Parks Super, the owner of the 41-55 Paterson St site, for a $60 million retail, residential and parking development.

The withdrawal is a blow for the council which was strongly committed to the Creative Precinct project. It used ratepayer's funds to pay a $1.2 million, or 10 per cent, deposit towards the proposed $12 million car park purchase by precinct proponent Creative Property Holdings in July 2020.

It also stood behind CPH as financial guarantor at one stage and separately paid $8.4 million for the still vacant Birchalls building. The Council preference was for a bus interchange and the Creative Precinct.

A council YouTube production still claims the council has bought part of the Birchalls car park for a business interchange and that CPH had bought the rest of the car park for the precinct.

However, a Federal Court case and a subsequent appeal derailed the plans.

A Tasmanian Government spokesman said: "It is disappointing that the Federal Government has decided to remove this funding from a Northern Tasmanian project."

"The Creative Precinct is an exciting project that would transform Launceston and Northern Tasmania by helping create new industries for the region, driving innovation and education outcomes and bringing development and vibrancy to the centre of the city. The Tasmanian Government will continue to work with the Council and the project partners on a revised project for Northern Tasmania."