The History of Renew Newcastle

At the beginning of 2008 Newcastle had been hit badly by a large-scale version of a problem that was evident in many old main streets and town centres across Australia and around the world.

The old CBD of Newcastle had developed as a commercial precinct in the era of trams and public transport. The rise in car ownership and the construction of suburban shopping centres now meant that the old 'city centre' had ceased to be a desirable retail destination. Businesses had left the old city centre in favour of growing commercial shopping centres and office parks in outer suburbs.

Many buildings were empty and development projects were either stalled by the financial crisis or simply not viable. The city was emptying out and the old Newcastle CBD could no longer compete with the suburbs. The biggest symptom of this problem was that there were approximately 150 visibly empty buildings in the Newcastle city centre.

The sheer volume of empty spaces had reached the point where the decline had become self-perpetuating. It was attracting vandalism, violence and street crime. New businesses were reluctant to open in areas that had been in a spiral of visible decline for more than two decades.  

The not-for-profit company Renew Newcastle was founded to make some of these spaces available on an interim basis to artists, creative enterprises and community groups. In theory, this would benefit the projects that occupied those spaces and act as a catalyst for reactivating the city.

Despite a high level of interest from creative enterprises in accessing vacant spaces and examples overseas having shown that this could be a catalyst for urban renewal, the process did not begin organically in Newcastle. Artists and creative entrepreneurs reported that while there were high levels of vacancies, it was still comparably difficult to rent vacant spaces as the costs were prohibitive and the terms available did not match their way of working.

The Renew Newcastle model was developed in response to this problem.

Artists' patterns of working and the overheads involved in even long vacant buildings meant that the kind of initiative evident in the community was not matching the reality of the commercial property market. The market value of many of the buildings had fallen below the cost to their owners to use them. In many cases, buildings were worth more to their owners as losses and deductions than as going concerns.

An ordinary commercial lease - even a peppercorn one - created obligations and burdens on a property owner so great that it meant that there was a considerable cost in allowing low-cost activity despite obvious benefits to the city and, ultimately, to the property owner.

Renew Newcastle identified issues such as liability and insurance, tax and accounting ramifications (property values are assessed based on lease values so cheap leases can 'devalue' a property on paper), and increased maintenance costs as key reasons why these properties had become 'unleasable' for the kinds of market values that people were willing to pay for them.

Effectively, the rental values had fallen below an artificial floor, below which they could not be viably rented.

By putting in place a structure that brokered access to these spaces cheaply, Renew Newcastle was able to bring nearly 40 new creative projects and enterprises - both temporary and ongoing - back to the city in the first 12 months.

Within the first year, the initial area of the city targeted by Renew Newcastle - the Hunter Street mall - was transformed from an empty area in the city to a busy centre of creativity and activity. By the end of that first year, many new commercial tenants were opening, and activity and interest was returning to the mall at a level not seen in decades.