Urban Renewal Cost Recovery Scheme

The Urban Renewal Cost Recovery Scheme (URCRS) funds investment in major flooding and drainage infrastructure to enable major urban renewal precincts in Melbourne, where people can live, work and visit.

The scheme will support the development of the Arden precinct in Melbourne’s inner north-west, and includes:

  • a flood infrastructure plan
  • relevant infrastructure needed to service urban redevelopment and the regeneration of these precincts
  • a pricing arrangement detailing how Melbourne Water will recoup the infrastructure costs, through financial contributions paid by developers when they submit a planning application to develop land at Arden.

It is separate to the precinct’s Development Contributions Plan, currently proposed by the Victorian Planning Authority via Planning Scheme Amendment C407.

Why the scheme is needed in Arden

The Arden precinct in Melbourne’s inner north-west is mostly low lying and prone to flooding, which will be made worse through climate change. The current drainage system is not designed to manage these flows, resulting in unsafe flood depths in some of the lowest lying areas. 

Changes in zoning and land use will transform Arden from an industrial to an innovation and employment precinct (which includes mixed use and residential). As the precinct develops and more people visit, live and work there, it requires a higher level of flood protection.

The URCRS funds the necessary major flooding and drainage infrastructure to manage flood risk in the precinct, and enable more areas of Arden to be developed, and in a safer way.

The vision for Arden

The Arden Structure Plan outlines the State Government’s vision for the precinct’s redevelopment. It includes:

  • innovative and multi-use flood mitigation solutions in the natural and built environment
  • a valued Moonee Ponds Creek corridor
  • an integrated water management approach, to ensure water is shared and reused across Arden.

Infrastructure funded by the scheme

Melbourne Water is working with the Victorian Planning Authority, Department of Transport and City of Melbourne to safely manage the risk of flooding to future development of Arden – the first precinct where we propose to apply the URCRS.

Significant infrastructure is needed to meet this flood and drainage challenge, including:

  • large flood storages (both above ground and below)
  • levee banks
  • pipes and pumps.

This is expected to cost in the order of $110 million.

Developer contributions

Redeveloping land often contributes to, or causes, the need for new or upgraded infrastructure. The change in land use and zoning requires a higher level of flood protection, provided by the proposed works, which enables more of Arden to be developable. Without it, the vision for Arden cannot be achieved, and the entire Arden precinct therefore benefits from these works.

Development contributions are therefore needed to provide essential infrastructure enabling new development across the precinct as a whole.

Calculating the URCRS charge

All new development, including strata subdivisions, will pay an URCRS contribution based on the increase to gross floor area.

A discounted cash flow methodology is used to calculate contributions for the Arden precinct, so that the income Melbourne Water receives is equal to the planned expenditure over the expected life of the scheme. The charge will be periodically reviewed to account for infrastructure renewals, pace of population growth and intensity of development.

Developers will be advised of their calculated contribution when they submit their planning applications.

Preliminary contribution rate
The preliminary rate range within the Arden precinct will be in the order of $8,000–9,000 per 100m2 gross floor area. A final rate will be determined following industry engagement, scheduled to occur over 2022.

Consultation process

Melbourne Water is committed to transparent, open discussion about the Urban Renewal Cost Recovery Scheme and our approach to funding necessary flood management infrastructure for the precinct.

We will engage with affected parties prior to finalising the URCRS:

Process: step 1
 

September to October 2021

Raise awareness of the flood management planning required for Arden, the URCRS and the preliminary rate range. This stage is integrated with the State Government’s public exhibition of Amendment C407 to introduce the Arden Structure Plan and associated planning controls.

For more information, visit the Engage Victoria website.

Process: step 2
 

Early 2022

Consultation with the development and planning industry on the details of the URCRS, including information on the preliminary rate, proposed works and infrastructure, costs, maps and timing. This stage will include an opportunity for public feedback on the proposed URCRS.

Process: step 3
 

Late 2022 (TBC)

Communication on the final rate and collection of the charge.

More information

For more information, download the following fact sheet:

If you need any help, contact us:

 131 722

 [email protected]

Last updated:
13 September 2021