FUTURE

Museum of Applied Arts and Sciences

(MAAS) Final Business Case - Executive

Summary

Version Number: 0.7 Gate 2 Review Date issued: 14 February 2017 Sensitive: Cabinet

TAKE OF CONTE\TS

1 Executive Summary 3

1.1 Recommendation 3

1.2 Introduction 4

1.3 Key project sponsors 5

1.4 The MAAS Board of Trustees 5

1.5 The government commitment 6

1.6 Objectives of the project 7

1.7 Project overview 8

1,8 Service need 12

1.9 Overview of Options Considered 14

1.10 Costs and Benefits 17

1.11 Collection and Logistics Planning 24

1.12 Stakeholder Engagement and Consultation 26

1.13 Procurement and Implementation Arrangements 27

1.14 Key Assumptions and Strategic Directions 30

1.15 Conclusion 32

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1. EXECUTIVE SUMMARY

1.1 RECOMMENDATION

This Business Case establishes the minimum investment case required to support Governments commitment to secure the long term sustainability and outputs of the Museum of Applied Arts and Sciences (MAAS) through the development of the New Museum for MAAS at Parramatta.

The preferred project option responds to the requirements of the New Museum Project Objectives and the NSW Governments commitment to develop a world-class contemporary museum. The realisation of the New Museum complements Governments objective to underpin the growth and development of the Western Sydney's cultural sector through the provision of a contemporary facility that drives demand for cultural participation. A thorough facility planning and modelling process has seen the development of a preferred option that enables maximum utilisation and activation of the Riverbank site, and provides greater access to the unique MAAS collection. The New Museum will provide benefits to NSW residents and visitors, by providing a fit-for-purpose facility that will be operational by December 2022.

This investment case provides substantiation of the $724 million capital and $99.21 million transition recurrent for the preferred Option 02A, required to enable the New Museum for MAAS to maintain its future business, cultural, community and strategic obligations including:

1. ensuring that MAAS delivers upon the requirement to remain Australia's contemporary museum for excellence and innovation in applied arts and sciences. MAAS' vision is to be the leading museum of applied arts and sciences, inspiring people and communities to transform our world. Its mission is to be a catalyst for creative expression and curious minds;

2. the development and maintenance of its collection;3. ensuring that MARS forms part of a global network of cultural

heritage organisations which collaborate on research, collection loans and exhibition development and touring;

4. ensuring that MAAS and its Trust continue to deliver its legislative mandate established under the Museum of Applied Arts and Sciences Act 1945 (NSW);

5. utilisation of innovative, sophisticated media technology intelligently embedded throughout the Museum's experiences that bring the collection and its stories of human ingenuity to life. Investment in immersive, interactive experiences that focus on co-creative, hands-on learning allowing maximum exposure to the MAAS collection;

6. ensuring that MAAS utilises new digital learning and online collaborations that provide a dynamic digital and online presence, with key support for STEAM (science, technology, engineering, arts, mathematics) and the creative industries, Providing outreach across NSW and Australia therefore creating new and innovative educational and interactive experiences that enhance the status of NSW as a supporter of community, industry and educational outcomes;

0. ensuring that the New Museum delivers upon Governments economic, social and cultural investment in the growth and development of one of the fastest evolving regions in NSW and Australia, by using the arts and culture sector to drive this strategic priority. The planning for, and development of, the New Museum in Parramatta comes at a time when Government and the community are recognising and responding to the extent of demographic and economic change occurring in the Western Sydney region — characterised by the higher-than-average growth In population, changing demographic characteristics, continued growth in economic output and a rebalancing of sources of regional economic output towards service and higher value-added industries. Parramatta, more specifically, is an emerging smart city; and

ensuring that the project delivers on Governments commitment to1.

establish the new facility for MAAS on the Parramatta Riverbank with consideration to wider urban planning and precinct activation opportunities.

The imperative to support the Final Business Case is underpinned by Government's recognition that the New Museum Project provides significant opportunity for a social infrastructure investment in MAAS to anchor the community of Western Sydney. Recent and compelling justification of the value of like investment is evidenced from various international and national projects such as the Guggenheim in Bilbao, Spain and the Museum of Old and New Art (MONA) in Hobart, Tasmania.

The New Museum for MAAS at Parramatta presents a once in a generation opportunity to effect change within the cultural landscape of Western Sydney and NSW. MAAS 'holds in trust for the community an invaluable and preeminent collection, the true value of which is only enabled through its ability to be shared and experienced. The recommended level of investment in a New Museum for MAAS will deliver upon the objectives and goals of Government for MAAS as an institution, the broader cultural strategies for NSW and for the economic success of this growing region.

MAAS IS AUSTRALIA'S CONTEMPORARY MUSEUM FOR EXCELLENCE AND INNOVATION IN APPLIED ARTS AND SCIENCES AND COMMANDS A UNIQUE PLACE IN THE INTERSECTION OF SCIENCE, TECHNOLOGY, DESIGN AND THE ARTS.

1.2 INTRODUCTION

MAAS is Australia's contemporary museum for excellence and innovation in applied arts and sciences and commands a unique place at the intersection of science, technology, design and the arts.

Established as part of the 19th century agenda for the advancement of knowledge and social reform, following the Sydney International Exhibition of 1879, MARS remains as relevant and as resonant in its role today as it was then.

The Museum's critical focus on creativity, ideas and innovation as well as engagement with STEAM (science, technology, engineering, arts and mathematics) through its core disciplines, collections, programs and research has seen the Museum establish a reputation in the delivery of effective and meaningful public engagement initiatives that sit at the nexus of art and science.

MAAS is responsible for the Powerhouse Museum, Sydney Observatory, and the Museums Discovery Centre. The Museum was established under the Museum of Applied Arts and Sciences Act 1945 (NSW). This Act states the role of the museum is to "effectively minister to the needs and demands of the community in any or all branches of applied science and art and the development of industry."

The purpose of this Final Business Case is to develop, appraise and justify the capital and recurrent funding requirements to ensure that the New Museum Project achieves the benefits and commitments required both by Government and as outlined in the conditions of the Trustees of the Museum of Applied Arts and Sciences. In this respect, the Final Business Case does not seek to prove the case for change in respect of strategic priorities already announced by Government such as:

· the relocation of the Museum to Western Sydney;· the selection of the Riverbank site in Parramatta;· the New Museum will serve as an anchor for a new arts and

cultural precinct;· the New Museum will showcase 40% more of the MAAS'

collection by increasing the area of collection on display; and

· the project will be subject to a design competition, to enhance the opportunity for delivery of iconic building.

The Business Case therefore considers the following elements in the context of the aforementioned terms of reference:

· financial analysis of the minimum service configuration that delivers the current and future needs of MAAS;

· determination of the option that provides the best value proposition to deliver the benefits and strategic outcomes for MAAS in line with the Project Objectives in 1.6;

· implementation assessment of the preferred delivery option (only) with consideration of:

· Project Governance and Project Management;· Procurement and Delivery Planning;· Stakeholder Engagement;· Workforce Planning; and· Risk Management Planning.

· demonstrates the evidence that the proposed project is ready to be considered for investment approval by Government; and

· provides preliminary review of commercial opportunities that could be considered and their impact on the master planning and value drivers for the threshold investment case.

1.3 KEY PROJECT SPONSORS

The key sponsors for the New Museum Project are:

1. The Trustees of MAAS who, under the MAAS Act have key responsibility for the collection and MAAS assets;

2. Minister for the Arts, responsible for the direction of the Arts & Cultural policy for NSW, and the Premier of NSW as the Minister for Western Sydney; and

3. Arts NSW & Department of Justice, responsible for the implementation of Art & Cultural policy, and Chair of the Project Steering Committee.

1.4 THE MAAS BOARD OF TRUSTEES

The MAAS Board of Trustees has stewardship of MAAS and exercise the powers conferred by the MAAS Act. The Board of Trustees has been guided by two primary objectives in relation to the New Museum project and as custodians of the collection.

The first is a commitment to deliver, a world class museum, enabled by adequate capital and operational funding. This represents a unique challenge, to reimagine a museum of applied arts and sciences that responds to the changing technologies, learning environments and lifestyle trends of the twenty first century.

The second is a commitment to maintain and enhance the MAAS collection. The hybrid nature of this collection, spanning the applied arts and sciences and making connections between sciences and materials technologies on the one hand, and design and innovation on the other, is unique amongst Australian collecting institutions. Museums are defined by their collections, rather than their buildings, and the Board of Trustees is committed to enhancing a collection which tells a story of human creativity, ingenuity and innovation.

To ensure that the integrity of the Museum and its unique collection are not comprised, the Board of Trustees has the following vision for the New Museum project:

· in order to achieve an architecturally iconic, wood-class flagship Museum, a 'whole site' option, unencumbered by other commercial developments, is required;

· that the New Museum will improve the current suite of exhibition and programs and not diminish the scale and scope of the museum, or opportunities currently afforded at Ultimo;

· that sufficient funding is provided by the NSW Government to enable these requirements to be met and to effectively and safely transition the collection and operations to the new site; and

· that consideration is given to introducing free general admission to the New Museum.

"We're committed to providing locals and visitors with world-class experiences right across

NSW and this investment in arts and culture in Western Sydney is a clear example of that.

Source: Excerpts from 'Powerhouse powers into Parramatta: $30 million to grow Western Sydney Arts Precinct,'26th preci

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"We're committed to providing locals and visitors with world-"Western Sydney deserves its own cultural institution to be class experiences right across NSW and this investment in artsproud of and the Powerhouse Museum is a terrific cultural icon and culture in Western Sydney is a clear example of that.to be housed locally in the region,"Mr Grant said.Source: I xcerpts from 'Powerhouse powers into Parramatta: $30 million to grow Western Sydney Arts Precinct,'261h February 2015, III Los: //www. nsw. gny .auhnedia releases-premier/powerhouse powers-par ra ma I la 30 - mill kin 7gThw- western sydney- arts - precinc t.

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1.5 THE GOVERNMENT COMMITMENT

On 26 February 2015, the former NSW Premier, Mike Baird MP, and former NSW Deputy Premier and Minister for the Arts, Troy Grant MP, jointly announced that the Powerhouse Museum would be relocated to Parramatta. The announcement coincided with the launch of Create in NSW: The NSW Arts & Cultural Policy Framework 2015, the NSW Government's 10 year policy framework for supporting the development of the NSW arts and cultural sector.

Following the February 2015 announcement to relocate the Powerhouse Museum to Parramatta a number of potential sites were considered for the development. In September of 2015 the NSW Government Standing Committee on Infrastructure (CIC) determined that two sites, the Old David Jones car-park on Parramatta River ('the Riverbank Site') or the Parramatta Golf Course adjacent to Parramatta High School ('the Golf Course Site'), were to be shortlisted and evaluated in a Preliminary Business Case.

The purpose of the Preliminary Business Case was to evaluate the shortlisted sites and inform the NSW Government of the optimal site for the development of the New Museum at Parramatta. In April of 2016 Government considered the recommendations of the Preliminary Business Case and agreed that the Riverbank Site is the preferred location for The New Museum.

On 11 April 2016 the NSW Government announced that it had chosen the Riverbank Site as the preferred location for the New Museum at Parramatta.

The New Museum complements Infrastructure NSW's State Infrastructure Strategy Update 2014, that recommends the NSW Government support population and economic growth in Western Sydney, Australia's third largest economy, and promote Parramatta as Sydney's second CBD.

Infrastructure NSW specifically recommended the acceleration of a potential project to relocate the Powerhouse Museum to Parramatta as part of a broader strategy to enhance Parramatta as an employment hub, commercial centre and cultural destination.

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A NEW MUSEUM THAT FACILITATES BOTH PHYSICAL ANDDIGITAL MUSEUM EXPERIENCES THROUGH PERSONALISATION, INNOVATION,TECHNOLOGY, KNOWLEDGE SHARING AND EXCHANGE PLATFORMS.

1.6 OBJECTIVES OF THE PROJECT Optimise our Transition

The following project objectives, endorsed by the New Museum & Parramatta Cultural Precinct Project Steering Committee and the Trustees of MAAS, have been developed as a summary of the intended purpose, character and direction of the project. The objectives will guide the development and implementation of the project and will set the framework for the qualitative evaluation of the project options.

The New Museum for MARS Project Objectives are:

Create an architecturally iconic, and world-leading museum for the future

· A contemporary museum that facilitates both physical and digital museum experiences through personalisation, innovation, technology, knowledge sharing and exchange platforms.

· World-class education and research facilities embedding interactive technology.

· Embed more of our world-class collection at the heart of the New Museum, while maintaining intemational best practice storage, safety and care for this collection.

Enhance Accessibility and Sustainability

· Maximise audience engagement to our collections and programs, physically and digitally, by including free and low-cost access.

· Develop a sustainable MAAS operating model that increases and diversifies access to alternative revenue streams.

· Utilise robust delivery strategies that minimise disruption to operations at Powerhouse Museum whilst enabling a seamless transition to the New Museum.

· Implement sophisticated digital, programmatic and planning strategies that will enable business continuity during the development and transition to the New Museum.

Maximise the opportunity of our new place

· Be the anchor to a vibrant cultural hub.· Supports governments strategies to extend Sydney's cultural

offerings to Westem Sydney as described in Create in NSW: The NSW Arts & Cultural Policy Framework, the NSW State Infrastructure Strategy Update and the Rebuilding NSW Plan.

-WE WANT TO EXTEND SYDNEY'S CULTURAL RIBBON TO WESTERN SYDNEY SO WE WILL INVEST S10 MILLION TO RELOCATE THE POWERHOUSE MUSEUM TO PARRAMATTA."

Source: Excerpts from 'Powerhouse powers into Parramatta: $30 million to grow Western Sydney Arts Precinct,'26th February 2015,Attps://www.nsw.gov.au/media-releases-premier/powerhouse-powers-parramatta-30-million-grow-western-sydney-arts-precinet

t7 PROJECT OVERVIEW

The New Museum Project relocates the functions of the Powerhouse Museum. MAAS' other sites, Museum Discovery Centre and Sydney Observatory will continue business as usual. The project will decommission the existing Powerhouse Museum site, relocate the collections, and create new exhibitions and experiences for a new flagship facility at the riverbank site.

The site has a mix of existing uses including parkland directly adjacent to Parramatta River, a two storey City of Parramatta carpark, two locally listed heritage items and a range of commercial and retail premises on Phillip Street. The site is entirely owned by City of Parramatta with the exception of 42 Phillip Street, which is 243m2 in size, contains an electrical substation and is owned by Endeavour Energy. Acquisition of the site is currently being led by the Department of Justice and Government Property NSW.

The Project for the New Museum includes the demolition of existing structures on the site, including the possible demolition of heritage items, and the construction of an iconic, world-class museum. This includes the research, development and production of new exhibitions, programs and experiences for the New Museum. The project also includes a significant collection and logistics program that incorporates the preparation, documentation, planning and logistical arrangements for the relocation of the MAAS collection.

The New Museum scope includes a range of different and multi-purpose spaces that together, will enable the Museum to achieve its mission and vision.

The spatial and volumetric requirements for the New Museum were developed by MAAS during the development of the Preliminary Business Case. This process included comprehensive spatial benchmarking exercise of domestic and global arts and cultural institutions.

The spatial and volumetric requirements within the Final Business case have been based upon the requirement identified in the Preliminary Business Case, and have been subject to further value management exercises which have resulted in:

· scaling of spaces to suit the requirements of per capita requirements;· further benchmarking of auditoria, Omnimax and educational spaces;

and· spaces that provide dual functionality.

Further consideration has also been given to the current spatial provision within the Powerhouse Museum, and the provision of comparable spaces have been included as appropriate.

The following New Museum Area Schedule has been developed to reflect the core and supplementary requirements of the New Museum and has been endorsed by the New Museum & Parramatta Cultural Precinct Project Steering Committee. The project options developed for the Final Business Case are substantially based upon the spatial requirements detailed below:

New Museum Area Schedule

Space Height Area

Arrivals Foyer

Main Foyer — Primary entry, orientation and welcome 8 900

Ticketing — Information, wayfinding and ticketing 8 200

Cloaking - 50

First Aid - 10

Office — Front of House and Security Staff - 50

Total 121

Commercial

Retail — Museum Shop 4 400

Retail Storage 4 10

Visible Collections — High density Collection displays 4 600

Collections/Long Term /Mid Height B — Large Items/MAAS Collection 6 2000

Collections/Long Term /Standard Height B — MAAS Collection 6 500

Total 7000

Gallery A

Main Touring Hall — Major intemational exhibitions (MAAS programmed) 12 1000

Main Touring Retail — Popup Gift Shop 4 100

Touring Hall Prep Space — Setup, storage and packing 8 250

Dock — Loading access for shipping containers and objects 8 20

Total 1370

Gallery B

Main Touring Hall — Special Exhibitions (NSWCollections/PartnerPrograms)

8 1000

Main Touring Retail — Popup Gift Shop 4 100

Touring Hall Prep Space — Setup, storage and packing 8 250

Dock — Loading access and transit 8 20

Total 1370

Sydney Children's Gallery

Exhibits — Dedicated Play and Leaming space for 0-10

years Parents Lounge + Amenities6 800

Amphitheatre 6 (ncl. in exhibits)

Parents Lounge + Amenities 50

Outdoor Experience — Part of gallery, outdoor play - 800

Total 1650

Central Gallery

Main Space — Ever changing installations and commissions (biannual) 8 800

Tech/Equip/Support 4 20

Total 820

Main Galleries

Collections/Long Term Nery Tall — Very Large Scale Transport/Engineering 12 700

Collections/Long Term /Mid Height A — Large Items/MAAS Collection 8 700

Collections/Long Term/Standard Height A — MAAS Collection 6 1000

Temporary Gallery — Design — Regularly Changing Exhibitions (MAAS and touring) 500

Temporary Gallery — Science — Regularly Changing Exhibitions (MAAS and touring) 500

Immersive Experience Gallery — 4D Digital Visualisation Area 6 500

Visible Collections — High density Collection displays 4 600

Collections/Long Term /Mid Height B — Large Items/MAAS Collection 6 2000

Collections/Long Term /Standard Height B — MAAS Collection 6 500Total 7000

Centre for Fashion

Study Centre — Fashion Archive and Collection Access 4 200

Education Spaces

4 200Resident Offices — Artists/Designers/Makers/Technologists in Residence

Learning Studios— Incorporating the Centre for STEAM 4 1200

Library —Lounge — Archives, Research and Study Space 4 400

Education Arrivals — Welcome, orientation for Student Groups 4 200

Education Bag Check/Cloak 4 50

Total 2050

Auditorium Spaces

Large Format Omnimax — Large Format immersive projections 20 470

Main Auditorium — For talks, presentations and conferences 8 630

Small Auditorium — For talks, presentations and conferences 8 350

Foyer/Auditorium Breakout + Servery — Support spaces forevents/conferences

4 420

TechnicaVBioBox/Backstage — Operations and Dressing Rooms for auditoriums

4 130

Production Studio — Video/MediaAivestream production space 6 250

Meeting Rooms — Conference Breakout spaces 4 100

Total 2350

Back of House

Collection Storage — MAAS Collection stores and research spaces 4 3600

Conservation Workshop — Collections remedial, repair and conserve 4 200

Photo/Video Studio — Collections documentation exhibition content 4 20

ConstructionWorkshop — Wood/Metal/Paint Shop for ExhibitionConstruction

4 500

Technology Workshop — Repairs/Maintenance for Video, Lighting & Technology

4 200

Workshop Storage — Materials, spares storage 4 250

Exhibition Storage — Glazed showcases, mannequins, plinths, stands 4 200

2 0 0 0

200

5 0

Office Space — Staff and Directorate Offices, Amenities and Workspaces 4 for 200 people

Loading Dock — Primary Goods arrivaVdispatch 4

General Goods Storage — Stores, stationery, consumables 4

Total

Grand Total 26,200

INSTITUTIONS SUCH AS MAAS ARE VITAL TO A CITY'S TOURISM, ACTING AS SIGNIFICANT ECONOMIC GENERATORS, BOTH WITHIN THE LOCAL AND WIDER COMMUNITY.

1.8 SERVICE NEED

1.8.1 Threshold Service Need

MAAS is a public Museum operated by the NSW Government and is one of the five State Cultural Institutions which include the Australian Museum, Art Gallery of NSW, State Library and Sydney Opera House. MAAS is a statutory body with the Arts NSW. The Minister for the Arts, is responsible to Parliament for operations of the Museum. The Museum is governed by a Board of Trustees appointed under the Museum of Applied Arts and Sciences Act 1945.

The service need that underpins the project is a State mandate that MAAS must be Australia's contemporary museum for excellence and innovation in applied arts and sciences. Cultural institutions are social places, they work to serve the public but also partner with the public to achieve their objectives. They are also politically engaged, globally connected and incredibly skilled in the arts of international cultural diplomacy, their reach sometimes extending beyond that of govemments, assisting in improving relationships. They offer a place for the public to learn about, and debate contemporary ideas across arts and sciences, promoting civic engagement. Adults and children alike are actively engaged through exhibitions, learning programs and events and become part of the local and global community. They offer communities a place to share their own stories and establish and explore an emotional ownership of the collection and institution. Importantly, institutions such as MAAS are vital to a city's tourism, acting as significant economic generators, both within the local and wider community.

The MAAS Act enshrines this mandate within a legislative framework such that the Museum is required at law to "effectively minister to the needs and demands of the community in any or all branches of applied science and art and the development of industry by:

· the display of selected objects arranged to illustrate the industrial advance of civilisation and the development of inventions and manufactures;

· the promotion of craftsmanship and artistic taste by illustrating the history and development of the applied arts;

· lectures, broadcasts, films, publications and other educational means;

· scientific research; or· any other means necessary or desirable for the development of the

natural resources and manufacturing industries of New South Wales."

The Museum is acknowledged internationally for the calibre of its collection, scholarship and exhibitions. Its collection spans Australian and international history, science, technology, design, industry, decorative arts, music, transport and space exploration. It is home to the material heritage and stories of Australia's diverse communities and cultures, providing insights into Australian history and society.

During the current fiscal year, MAAS has comprehensively delivered its mandate. It has grown the Museum's critical focus on creativity, ideas and innovation, as well as engagement with STEAM (Science, Technology, Engineering, Arts and Mathematics). It has achieved this through its disciplines, collections, programs and research, which h seen the Museum rapidly establishing a reputation in the delivery u, effective and meaningful public engagement initiatives and strategies that sit at the nexus of art and science. In particular, the delivery of a dynamic schedule of vibrant and innovative programs, festivals and exhibitions with a particular focus on audience engagement and customer service has resulted in strong and positive growth across all areas of the Museum's portfolio. 2015/16 MAAS saw a total audience reach of over a million people, with over 730,000 visits in total to the Powerhouse Museum and the Sydney Observatory combined, and over 280,000 visits to offsite and satellite exhibitions programs and talks facilitated by MAAS at other locations in Sydney and around Australia. The Powerhouse Museum visits were up 33% compared with 201415.

This threshold service underpins the service need relevance of MAAS as a cultural institution that supports the social, environmental and economic growth of NSW.

1.8.2 Ensuring a Sustainable Service

By positioning MAAS at the centre of the innovation and creative agenda, the New Museum Project can inspire a new generation of

young Australians to dream, to imagine the possibilities and realise their ambitions. Government has recognised that its investment must include an iconic architectural building that anchors the identity of Parramatta and Western Sydney and draws local, interstate and international audiences to the area. The New Museum will explore new methods of display and engagement that will creatively interact the way an audience engages with MAAS' collection. An increased ability to regularly change and revitalise the displays will ensure a greater opportunity to attract a repeat audience.

The move to Parramatta to a purpose built museum will allow MAAS to bring world class exhibitions, events and programs that have previously been limited to Sydney's CBD. It will support the growth and development of one of the fastest evolving regions in NSW and Australia, and deliver on the NSW Government's strategic priorities in supporting the arts and culture sector.

From his announcement, the former Premier set the tone for the New Museum: it must be an icon for Sydney, the Museum, and the world. It will engage with its urban environment and be integrated with, and connected to the city. The architecture and placement within the site will reflect a landmark status, an identity distinct from surrounding buildings. The design should optimise street frontages to be visible from key approach corridors, and signal the Museum's presence within the urban landscape.

The New Museum will be subject to an international design competition. The museum's mission in applied arts and sciences must translate to a building of superior design and innovative engineering qualities and, world class design excellence in its physical form.

More than a traditional museum, the New Museum will be a truly dynamic place for people to meet, socialise, debate, learn and share ideas. Full of activity year round, day and night, it will offer a vibrant portfolio of exhibitions, events, and creative programs alongside cafes, social and open spaces.

The New Museum will be a major destination. Beyond simply inspiring visitors; it aims to leave them transformed with new knowledge and skills. Bringing the collection to life, the New Museum will create personalised onsite experiences for visitors, offering a variety of innovative ways for people of all ages to connect and learn. It will feature immersive, interactive experiences with a focus on co-creative, hands-on learning and participation by the community.

Sourced from Australia's largest and most significant collection of applied arts and sciences, exhibits will feature displays of objects from spacecraft to fashion, large-scale immersive displays and public access to the heart of the collection through visible collection storage.

Sophisticated media technology, intelligently embedded throughout the experiences, will bring the collection and its stories of human ingenuity to life. Digital learning and online collaborations will provide a dynamic digital and online presence, with key support for STEAM and creative industries education providing outreach across NSW and Australia.

Combining exhibitions with workspaces, the New Museum will also bring together scientists, technologists, designers and artists from across Sydney and the world opening up new opportunities for exciting cross-disciplinary collaboration, participation and research.

All this will be housed in the heart of Western Sydney, with sustainable and architectural design excellence that will set a benchmark for museum design globally.

1.8.3 Commercial Opportunities

Key to achieving the MAAS objective to be more sustainable are the core commercial opportunities that support MAAS' business outcomes and service needs. The Museum has existing revenue driving activities that it will continue to grow.

The New Museum will generate varied revenue streams to diversify its funding base through function spaces, food and beverage, a large dedicated flexible touring gallery able to hold "blockbuster' exhibitions, auditoriums and an Omnimax— the first of its kind in Australia. MAAS will continue to create world-class publications and build on its membership base.

1.8.4 Business Continuity Strategy - Operations DuringDevelopment and Delivery — Business Continuity Strategy

MAAS will be required to continue to deliver world-class exhibitions and programs at the Powerhouse Museum until 2021.

The day-to-day operations will remain as they are today until the beginning of 2021 when MAAS will commence collection logistics works in the Powerhouse Museum in preparation for the New Museum. From 2021 MAAS will present a scaled back offering at the Powerhouse Museum to visitors whilst it will be business as usual at the Sydney Observatory and Museums Discovery Centre.

This scaled back offer will reduce the number of active exhibition spaces, and will reduce the frequency of temporary exhibitions programming. Education, public and festival programming will remain at existing levels thus managing community business continuity expectation.

Additional programming, exhibition touring and outreach across Western Sydney and NSW is planned across the transition period to ensure overall continuity of MAAS public offer.

UMW

MORE OF THE MAAS WORLD-CLASS COLLECTION WILL BE EMBEDDED AT THE HEART OF THE NEW MUSEUM. WHILE MAINTAINING INTERNATIONAL BEST PRACTICE STORAGE, SAFETY AND CARE FOR THIS COLLECTION

1.9 OVERVIEW OF OPTIONS CONSIDERED

The Final Business Case considers three project options and sub-options for the development of the New Museum on the Riverbank site, each of the project options are substantially based upon the requirements of the Area Schedule.

The project options all assume availability of the entire site for the exclusive development of the museum, however the investigation of additional mixed use developments on the site may result in additional land use opportunities which may alter this assumption in future stages of the project.

A 'do nothing' option, being the continuation of operations at the Powerhouse site at Ultimo, whilst not architecturally modelled has been utilised for the purposes of the economic and financial analysis, however this option is not considered a viable project option further to the unequivocal commitment to relocate the Powerhouse Museum to Parramatta.

The Project Options considered within the Final Business case are summarised as follows:

Option 01 — Reduced Brief:· value managed option of the Area Schedule scope;· this concept envisages utilisation of the entire site, and does not retain the

heritage items of Willow Grove or the St George's Terrace;· Omits 'Touring Gallery B', the Omnimax and has reduced collections

storage; and· the Area Schedule for Option 01 is less than the current space

occupied by the Powerhouse at Ultimo.

The reduced collections storage, gallery space and omission of the Omnimax severely constrains the New Museum's capacity to function as a contemporary, world-class cultural institution. The briefed area requirement of Option 01 also limit the capacity of the museum to display more of the Museum's collection in accordance with Government commitments.Option 02 — Base Requirement with reduced Gallery space:· captures the base requirements of the Project scope, with the

omission of 'Touring Gallery B' and reduced Gallery Areas;· this concept envisages utilisation of the entire site, and does not retain the

heritage items of Willow Grove or the St George's Terrace; and

· the total Area Schedule for this option is comparable to the current space of the Powerhouse at Ultimo, however has less display space than the current Powerhouse Museum.

Option 02A — Base Requirement:· option 02A captures the base requirements of the Project scope with the

omission of 'Touring Gallery B';· this concept envisages utilisation of the entire site, and does not retain the

heritage items of Willow Grove or The St George's Terrace;· option 02A contains gallery space comparable to the Powerhouse; and· this option will enable MAAS to display more of the Museum collection and

function as a contemporary world-class museum.

Option 03 — Base Requirement, and Heritage Retention:· captures the entire requirements of the Project scope, including

Touring Gallery B;· this concept envisages retention of Willow Grove and the St

George's Terrace; and· the total briefed floor area for this concept is greater than the current

space of the Powerhouse at Ultimo;· the briefed areas requirement of this option would enable the

development of a contemporary museum facility, however the functionality and layout of the facility may be constrained by the inclusion of the heritage items on site.

1.9.1 Qualitative Assessment of Project options

A detailed qualitative assessment of each of the project option has been undertaken by the Project Committee Group (PCG) and the Trustees of MAAS, and considers the advantages and disadvantages of each option. The following table assesses the relative capacity of each option to meet the New Museum Project Objectives.

LEGENSCORE:

ill

11

X

INTERPRETATION:

The option will meet

the project objective

The option is likely

to meet the project

objective

There is a moderate risk

the option will not meet

the project objective

The option will not meet the project objective

QUALITATIVE EVALUATION OF THE PROJECT OPTIONS AGAINST THE PROJECT OBJECTIVES

Project Objectives Option 01 Option 02 Option 02AOption 03

Reduced Brief Base Base Base Requirements

requirements requirementswith Heritage

reduced retention gallery space

The New Museum

Create an architecturally iconic, and world-leading museum for the future

A contemporary museum that facilitates both physical and digital museum experiences through personalisation, innovation, technology, knowledge sharing and exchange platforms

1 11 1 11 11.1World-class education and research facilities embedding interactive technology 111 111 1.11

Embed more of our world-class collection at the heart of the New Museum, while maintaining international best practice storage, safety and care for this collection.

Access

Enhance accessibility and sustainability.

Maximise audience engagement to our collections and programs, physically and digitally, by including free and low-cost access

1/7 Vil IllDevelop a sustainable MAAS operating model that increases and diversifies access to alternative revenue streams

11( 111 1 1 1 11

Transition

Optimise our transition

Utilise robust delivery strategies that minimise disruption to operations at Powerhouse Museum whilst enabling a seamless transition to the New Museum.

Implement sophisticated digital, programmatic and planning strategies that will enable business continuity during the development and transition to the New Museum

II. 1,1 11 11

New Place

Maximise the opportunity of our new place x 111 11111

Be the anchor to a vibrant cultural hub 1 111 1 1 111

Supports government's strategies to extend Sydney's cultural offerings to Western Sydney as described in Create in NSW. The NSW Arts & Cultural Policy Framework, the NSW State Infrastructure Strategy Update and the Rebuilding NSW Plan

1 11 111 1,1,1

OUTCOME NOT PREFERRED NOT PREFERRED PREFERRED NOT PREFERRED

The above qualitative analysis demonstrates that Option 01 is the least preferred option. There is significant risk with this option and associated budget that museum operations would be severely constrained and the public value of MAAS would be diminished compared to current operations at the Powerhouse at Ultimo. The reduced collections display and storage areas, below the current provision at Ultimo, will not enable the delivery of Government's commitment to display more of the collection or provide the world-class facilities expected of a new, contemporary museum. There is a high risk that Option 01 will not meet the New Museum Project Objectives and the commitments made by the NSW Government.

Options 02 and 03 are comparable in terms of qualitative assessment. Both have limiting factors that have capacity to impact upon the New Museum's operational efficiency and effectiveness. The retention of Heritage items in Option 03 constrains the utilisation of the site and optimal planning of the site and built form of the Museum. Option 02 contains less display space than the MAAS Ultimo facility and for that reason provides less opportunity for the full achievement of the project objectives and Government commitments. Option 2A and 3 meet the Trust's requirements for the project.

1.9.2 The Preferred Option

Option 02A is the preferred project Option based upon the qualitative assessment. The gallery space provided in Option 02A is comparable to Ultimo, and the provision of this purpose built space will enable MARS to display more of its collection and function as a world-class contemporary museum. The option that poses the least risk in not meeting the New Museum Project Objectives and the commitments made by the NSW Government is Option 02A. It is also considered that Option 02A delivers the maximum value and benefit return against the Museum's obligations under the MAAS Act and Government commitments, including the requirement to provide more of the Museum's collection on display.

Quantitative assessment of each of the project options has been considered in the following section.

THE DEVELOPMENT OF THE NEW MUSEUM WILL EXTEND SYDNEY'S CULTURAL OFFERING. IT WILL SUPPORT GROWTH IN THE ARTS AND HELP TO UNDERPIN FURTHER GROWTH IN THE REGION.

1.10 COSTS AND BENEFITS

1.10.1 Audience Demand Analysis and Willingness to Pay Survey

An Audience demand analysis has been undertaken to understand the underlying drivers of participation and demand, consumer preferences, and willingness-to-pay for the New Museum within the NSW community and limited interstate participants. The survey, undertaken via a choice modelling exercise, received 1,602 valid responses that have informed the content of the Willingness to Pay and Audience Demand Analysis Report and the visitation forecasting.

The survey modelled discrete scenarios, based on spatial attributes that aligned with the project options 1, 2 and 3. The scenarios were based upon moving the existing Powerhouse museum to Parramatta and extending each scenario with the additional spaces included within each option as detailed in the New Museum Functional Design Brief.

Willingness to Pay was then calculated for a 'Non-Use' model, expressed as a yearly council tax contribution, and a 'Use' model, Willingness to Pay which is expressed as a component of general admission price. The results of the study, based upon the existing entry admission price of $15 are as follows:

Table 1.10.1 Outcomes of Willingness to Pay Survey

New Museum Option Total WTP `Non-Use' — 3 year levy Total WTP — 'Use'

Option 01 $33.06 $8.81

Option 02 $38.76 $11.19

Option 02 A $41.49

Option 03 $42.72

Note: Option 02A was not modelled as a discrete option within the survey, however a 'Non-Use' Willingness to Pay has been modelled through the inclusion of an additional temporary exhibition attribute as a proxy to derive the additional utility of the additional gallery space contained within this option.

Willingness to Pay outcomes were heavily influenced by participant location and entry price. It was observed that in particular a lowering of entry price had a positive effect on participant preference to visit the New Museum.

1.10.2 Visitation Forecasting

Visitation forecasts have been modelled building upon the Willingness to Pay survey results for each project option. The visitation forecasts for each project have been validated against case studies of applied arts and sciences museums from around the world, considering the different locational and facility attributes of these institutions. Visitation numbers have been forecast for two scenarios, being the retention of a $15 entry free and a $5 cost option, which has been used as a proxy for free entry.

Although free entry has not been modelled, it has been estimated that visitation with free entry would be approximately 10% higher than that with a $5 entry fee, This has been estimated by extrapolating the linear relationship between utility and entry price derived from the choice model survey.

Figure 1.10.1 Overall New Museum and Powerhouse at Ultimo Visitation forecasts 2016 — 2042 ($15 and $5 admission prices)

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0Nco ,c"\ \c2) r$ ci> Otis ;to cfo ci3) n) rbe' 16,1-

q9 (15' (19 (1, ri/C (1 (1 r15) (1‘ (19 cP r15'Base case ($15 entry fee) — — — Option 1 ($5 entry fee) — — — Option 2 ($5 entry fee)

— — — Option 2A ($5 entry fee) — Option 3 ($5 entry fee) Option 1 ($15 entry fee)Option 2 ($15 entry fee) Option 2A ($15 entry fee) Option 3 ($15 entry fee)

The visitation graph above shows that as the project option offerings increase, the visitation increases accordingly. This is expected and can be attributed to the more features on offer and larger spaces. The dip in forecasts from the base case from FY2020-2022 is attributed to the constrained operations of the existing MAAS Ultimo site, while the preparation for the New Museum is taking place. On the other hand, the uptick in visitation from FY2023-24 reflects the expectation for an opening premium of 20 and 10 percent during the first and second year of operation, prior to the normalisation of visitation in the years beyond that.

1.10.3 Economic Appraisal

The Economic Appraisal has been prepared in accordance with NSW Government Guidelines for Economic Appraisal (NSW Treasury, TPP 07-05, 2007) and the guidance note, Issues for the Economic Appraisal of Proposed Investments in Cultural Venues August 2014.

In line with direction from NSW Treasury, the Economic Appraisal examines four project options for a New Museum for MAAS at Parramatta Riverbank, relative to a base case being the continuation of the current Museum at Ultimo. The Economic Appraisal considers the likely costs and benefits over a 20 year period from the opening of the New Museum in late 2022, as well as the time period prior to that while the New Museum is being constructed and operations at Ultimo continue as normal or in 'constrained' mode.

The Economic Appraisal considered the following costs and benefits to NSW society when moving from the base case to the project options:

Costs· capital costs, mainly comprising construction and lifecycle maintenance costs;· acquisition costs of the Parramatta Riverbank site;· transitional costs, i.e, costs associated with moving the collections to Parramatta; and· operating costs for the Museum.

Benefits· producer surplus i.e. labour and business surpluses to NSW businesses;· consumer surplus, incorporating the use and non-use benefit of the Museum;· residual asset value at the end of 20 year period; and· revenue from divesting the current Ultimo site.

Results of the Economic AppraisalBased upon a $15 entry fee the economic appraisal finds that all project options when compared to the base case represent a negative NPV, rangingfrom -$202 million under option 1 to -$324.6 million under option 3.

The BCR under four options ranges from 0.43 to 0.49. It is important to note that the BCR considers the marginal benefits and costs of relocating the Museum from Ultimo to Parramatta. It needs to be distinguished from the BCR for a new Museum which is likely to be significantly higher. According to these results, Option 1 is the most desirable development option with the BCR of 0.498.

Table 1.10.2 Results of the Economic Appraisal

Option 1 Option 2 Option 2A Option 3

PV costs $443,755,400 $509,835,036 $574,750,409 $610,699,728

PV benefits $221,045,317 $247,764,441 $259,930,082 $264,973,740

- Consumer surplus $85,765,730 $100,552,924 $107,631,062 $110,821,983

- Producer surplus -$9,037,048 $645,991 $2,344,362 $2,344,362

- Residual Asset Value $25,994,184 $28,243,074 $31,632,206 $33,484,944

- Divestment revenue $118,322,451 $118,322,451 $118,322,451 $118,322,451

NPV -$222,710,083 -$262,070,595 -$314,820,327 -$345,725,988

BCR 0.498 0.486 0.452 0.434

IRR -7% -9% -9% -10%

1.10.4 Capital Expenditure Costs

The following capital costs have been developed by the project cost planner, Rider Levitt Bucknall (RLB). The capital costs for each option consist of design, construction, management and statutory fees, contingency and escalation as follows:

Table 1.10.3 Capital Cost Estimates

Capital expenditure estimate ($ million)

CAPITAL ITEM Option 1 Option 2 Option 2A Option 3

Construction and fit-out

Riverbank Building

External Works, Demolition & Civils

Exhibition Infrastructure & Fitout

Provisional Allowance FF&EClient Direct Costs

Alterations to Ultimo and Other Direct Costs

Exhibition Research and Development

Collection and Logistics Digitisation Equipment

Site Acquisition Professional Fees

Contingency Fees & Escalation

Fees

Contingency and Escalation

Total — MAAS Option $595 $647 $724 $767

The following project scope items have been costed b RLB, but are not included within the capital cost estimates for each project option. These additional scope items and costs may be added to each option should Government direct inclusion of the items into the project scope,

CAPITAL COST ITEM Capital ($ million)

Basement carpark (6,000sqm) GIPTouring Gallery B (included within Option 3)

The following site acquisition and divestment costs have not been included within the Final Business Case capital cost considerations, however have been included for the purposes of analysis within the Economic Appraisal.

CAPITAL COST ITEM Capital ($ million)

Acquisition Riverbank Site Estimate (2017/18)

Divestment Ultimo Site Estimate (2022/2023)

1.10.4. Transition Operational ExpenditureDuring the development of the Final Business Case, a report was commissioned to provide specialist analysis and planning advice in the areas of collection assessment and management, documentation, digitisation, storage, decanting regarding the relocation of the MAAS collection from Ultimo to the New Museum. Built on this analysis, the capital cost estimates has been further refined and understood.

The Preliminary Business Case included estimated capital costs associated with museum relocation activities including additional staff resourcing and collection stocktake, preparation, documentation, ICT and transition. This capital cost totalled $70 million. The costs within the Preliminary Business Case did not include for the additional storage requirements now identified, and non-collection re-location requirements.

For the purposes of the Final Business Case, the above noted activities have been treated as operational expenditure in accordance with current accounting standards. This is reflected in the expenditure summary.

Transition operational expenditure will have the same financial impact across all of the proposed project options. The transition operational expenditure is summarised as follows:

Table 1.10.4 Transitional Operational ExpenditureDescription Expenditure Estimate ($ million)

Collections & logistics costs (including escalation) $98.5

Non-exhibition removal cost $0.71

Total $99.21

1.10.5 Financial Appraisal

A Financial Appraisal has been developed that evaluates and summarises the various costs and revenues associated with the potential options under consideration within the Final Business Case. These cash flows are then used to determine the net present value ("NPV") and other key metrics associated with the proposal's implementation. The financial appraisal has been conducted in accordance with NSW Treasury's 1PP07-4 Commercial Policy Framework: Guidelines for Financial Appraisal (Treasury 2007),

The following section outlines the results of the financial appraisal with respect to Capital, Transition Operating costs and Operating Cash Flows. The summary Net Present Cost for each option is presented in the following table:

Table 1.10.5 Net Present Cost for Each Project option ($ million)

Option 1 Option 2 Option 2A Option 3

Capital $-603.9 $-654.7 $-730.8 $-777.7

Transition $-96.7 $-96.7 $-96.7 $-96.7

Operating $-186.5 $-173.3 $-178.4 $-175.9

Residual Value $59.6 $64.8 $72.5 $76.8

Total $-827.5 $-860.0 $-933.4 $-973.5

Operational ExpenditureThe following table presents the net operating position results for each option, with a positive result indicating a net cost to Government.

Table 1.10.5.1 Net Operating Position per Option ($ million)

OPTION NOMINAL NPC

Option 1 $476.2 $186.5

Option 2 $439.7 $173.3

Option 3 $446.6 $175.9

Option 2A $453.8 $178.4

All options represent a net cost to Government. The inclusion of the Omnimax within project Options 02, 02A and 3 indicates a positive impact on revenue within these options.

The following table provides a summary of the overall position of the New Museum Facility preferred Option 02A in the first four years following commencement of operations, noting FY2023 is only a partial operational year from the anticipated opening on the New Museum in December 2022.

Table 1.10.5.2 Option 02A Operating costs to 2026 ($ million)

OPTION 2A FY 2023 FY 2024 FY 2025 FY 2026

Revenue $47.2 $50.4 $51.0 $52.4

Operating Expenses $-57,7 $-63.1 $-65.1 $-66.8

Operating Sub-Total $-10.6 $-12.7 $-14,1 $-14,3

Transition Operating Expenses $-14.0 $-1.9 $-1,9 $-0.9

Capital Cost $-6.8

Cash Flow $-31.4 $-14.7 $-15.9 $-15.3

1.10.6 Overall Evaluation

All project options involve significant capital, transitional recurrent and ongoing recurrent investment by Government. The significant expenditure required for the New Museum project is representative of the complexity and effort required to safely move and store the Museum's substantial collection located at Ultimo and the commitment to establish a contemporary, world-class cultural institution on the Riverbank Site.

Although it represents the lowest capital cost to Government and has the highest BCR, Option 01 fails to achieve the New Museum's project objectives and Government commitments. This highly valued managed option omits the Omnimax which in aggregation with the broader exclusions reduces sources of operational revenue.

Based upon the Financial Appraisal, Option 02 has the lowest net present cost in terms of operating expenditure, and has the second highest BCR at 0.48. The gallery space provided within Option 02 however, does not facilitate the requirement for the Museum to display more of its collection. Option 02A was developed to enable this commitment by Government and therefore represents the preferred project option. Financial assessment has demonstrated that the additional gallery floor space is only partially offset by the additional revenue that can be derived from the inclusion of this space. This is primarily due to space being an extension of an existing offering and not an independently measurable attraction. The preferred project option, 02A, responds to the requirements of the New Museum Project Objectives and the NSW Governments commitment to develop a world-class contemporary museum. The realisation of the New Museum complements Governments objective to underpin the growth and development of the Western Sydney's cultural sector through the provision of a contemporary facility that drives demand for cultural participation. A thorough facility planning and modelling process has seen the development of a preferred option that enables maximum utilisation and activation of the Riverbank site, and provides greater access to the unique MAAS collection. The New Museum will provide benefits to NSW residents and visitors, by providir a fit-for-purpose facility that will be operational by December 2022.

Option 03 represents the highest capital and recurrent impact to Government, and has the lowest BCR, rendering it the least desirable project option from a financial and economic perspective.

1.10.7 Social, Environmental and Economic Impacts

The development of the New Museum has the potential to generate substantial benefits to MAAS, the Sydney economy and community, and the NSW Government. As a museum of applied arts and science, the new building will exemplify design excellence, sustainable best practice and utilise innovative engineering qualities. It will engage with its urban environment, occupy a key civic location, and be a physical symbol for a smart and creative city.

During the development of the New Museum Project, MAAS has prepared a clear vision for the project. The vision articulates the opportunities and benefits that the delivery of an iconic institution will provide, and the key outcome areas where the benefits will be realised. MAAS has identified the following goals that the New Museum will encourage:

· the development of a globally significant State Institution, centred in Parramatta;· an iconic building and unique civic spaces for public events;· increased cultural participation;· driving tourism and overnight stays driven by major 'block-buster' exhibitions;· digital, Innovation & Technology sector participation, focussed on local businesses, partnerships and start-ups;· smart-city relationships in Health & Medicine, Technology, Design and Science;

· localised Programs centred around festivals, families, and multilingual events;· partnerships with nearby Arts & Culture: Information + Cultural Exchange, Riverside Theatres, Parramatta Artist Studios; and· commercial attractions such as conference venues and events spaces.

1.10.8 Social Impacts

The development of the New Museum for MAAS will respond to the changing demands of modem audiences within the arts and culture sector through the development for a new, fit-for-purpose facility. As an iconic, purpose built cultural destination, the New Museum has the opportunity to respond to domestic and global challenges in the dynamic arts and culture sector. The New Museum is a significant opportunity for MAAS to cement its position as a high-quality, relevant cultural Institution and strengthen its brand identity and image within the industry.

The realisation of the New Museum will extend Sydney's cultural offerings. This will improve Western Sydney's accessibility to arts and cultural institutions, and support growth in arts and help to underpin further growth in cultural participation in the region — to a level comparable to that for Greater Metropolitan Sydney.

1.10.9 Environmental Impacts

The New Museum will improve environmental sustainability and operating costs by embedding environmentally sustainable design (ESD) initiatives. Cognisant of the necessarily high energy needs of museum facilities, embedding ESD initiatives within the new facility will improve long term operational cost reduction and will improve environmental and social performance. The New Museum will be an iconic building that will incorporate innovative initiatives that showcase ESD principles demonstrative of the Museums place at the intersection of art and science.

1.10.10 Economic Impacts

A key element of the renewed New Museum for MAAS Vision is the need to create a financially sustainable agency. There is potential for the organisation to improve its organisational and financial capacity to adapt and respond to the market and competition. The development of the New Museum will be supported and enabled by the development of a modem operational model and a targeted and more responsive programmatic strategy and ancillary offering. This is expected to underpin the Museum's capacity to generate own-source revenue, thereby reducing reliance on recurrent funding from the NSW Government and improving its flexibility to capitalise on emerging opportunities.

THE DEVELOPMENT OF THE NEW MAAS MUSEUM WILL RESPOND TO THE CHANGING DEMANDS OF MODERN AUDIENCES WITHIN THE ARTS AND CULTURE SECTOR THROUGH THE DEVELOPMENT FOR A NEW, FIT-FOR-PURPOSE FACILITY,

1.11 COLLECTION AND LOGISTICS PLANNING

During the development of the Anal Business Case, a report was commissioned to provide specialist analysis and planning advice in the areas of collection assessment and management, documentation, digitisation, storage, decanting regarding the relocation of the MARS collection from Ultimo to the New Museum. Built on this analysis, programming, procurement, capital and operational cost estimates and risk assessments have been prepared to cover the safe transition and documentation process for the collection. The report has been informed by three discrete planning components:

1.The Collection Management Relocation Plan;2.The Collection Storage Analysis; and3.The Relocation Analysis, Strategy and Plan.

The analysis focuses on the process for the assessment, treatment, digitisation and relocation for the MAAS collection currently in storage

or on display at Ultimo. All other aspects of the transition process for MARS, such as the relocation of staff, equipment, non-collection items (showcases, replicas) and files have been excluded from this analysis and planning. A review of the collection storage requirements at Castle Hill has been taken into account, however collection items at Sydney Observatory have been excluded from analysis.

Collections Logistic Planning is critical for the move to the New Museum providing MAAS the opportunity to optimise the value of the physical move by identifying, cataloguing and digitising the collection and thus maximising the potential to inform, educate and entertain not only the people of NSW but also national and international visitors.

1.13 PROCUREMENT AND IMPLEMENTATION ARRANGEMENTS

1.13.1 Project Planning and Timeline

A Project Master Project Schedule has been prepared that details the key milestones and activities for the New Museum for MAAS Project. The dates respond to the Governments commitment to commence the project prior to the March 2019 election, The key milestone dates for the delivery of the project are as follows:

ACTIVITY MILESTONE

Finalisation of Business Case and Provision of Project Funding

Confirmation of Site Acquisition Strategy December 2016

Final Business Case Submission March 2017

Final Business Case Approval April 2017

Architectural Design Competition Brief Complete April 2017

Call International Design Competition April 2017

Project Funding Available August 2017

Design Competition Submissions July 2017

Award Design Competition Winner September 2017

Design, Statutory Approvals and Construction

Development Application Submission (early works) November 2017

Concept Design Works Complete August 2018

Early Works Commencement August 2018

Development Application Submission (main works) December 2018

Detailed Design Works Complete July 2019

Managing Contractor (Main Works) Package Awarded August 2019

Commence Construction August 2019

Facility Commissioning Complete July 2021

Commence Installation of MAAS collection July 2021

Commence Exhibition Fit-out July 2021

Collection Preparation, Decant and Storage

Collection Assessment & Preparation Commence November 2017

Collection Treatment for Digitisation and Relocation Commence May 2018

Collection Assessment & Preparation Complete November 2020

Collection Decant Commence January 2021

Collection Treatment for Digitisation and Relocation Complete October 2021

Large Object Store Available October 2021

Collection Digitisation Complete December 2022

Operations at Ultimo

Ultimo Normal Operations Cease March 2021

Ultimo Constrained Public Operations cease June 2022

Development and Realisation of MAAS Content

Content Development Complete End 2019

Exhibition Build and Object Installation Complete July 2022

The New Museum Open December 2022

1.13.2 Governance Structure

Establishing effective Project governance arrangements, investing in appropriate Project resourcing capacity, and defining clear remits for Project resources, will be critical to the successful delivery of the Project.

The Project proposes to move forward with a refocused version of the current Governance structure concentrated upon the planning and implementation of the New Museum development. The membership will be adapted to reflect Justice Infrastructure (or nominated delivery agency) as the delivery agency and refined as auxiliary project streams achieve resolution.

The New Museum Project Steering Committee (PSC): The MAAS PSC will ensure adherence to the agreed strategic direction, provide leadership to the New Museum Project and will be the definitive decision making body within the governance structure. Membership will comprise the Chief Executive Justice Infrastructure (or nominated delivery agency), Deputy Secretary (Arts and Culture) for the Department of Justice (DoJ) (as the Chair and Deputy Chair respectively), MAAS Director, Representative of the MARS Trustees, Justice Infrastructure,), and will include invitational representation from Infrastructure NSW (INSW), Arts NSW, NSW Treasury and the Department of Premier and Cabinet (DPC and the Project Director.

The New Museum Project Control Group (PCG): The PCG will be comprised of a discrete group of key project owners including representatives from MAAS, Justice Infrastructure (or nominated delivery agency), Arts NSW, Project Director and the consultant teams as required. The PCG will be responsible for the monitoring of performance against the project objectives, approving key deliverables and processes of the New Museum within the defined scope and driving delivery team outputs. The Project Director remains as the Chair of the PCG.

The Integrated Delivery Team (IDT): The IDT is made up of key project owners, led by the Project Director, working as one team to deliver the New Museum Programme. The IDT will be responsible for project definition and implementation, and driving the development of all aspects of the Project including the procurement and day to day management of the Project team. To ensure full program oversight and coordination the IDT is supported by a number of specialised working groups, Exhibition and Programmatic Strategy, Operational Strategy and Planning, Design, Technical and Construction Planning, Change Management, Collections and Communications and Stakeholder Engagement.

1.13.3 Procurement Strategy and Project Management Approach

To determine the strategy a Procurement Working Group (PWG) was convened to analyse and consider the most appropriate delivery model(s) and an independent Procurement Strategy prepared. The Procurement Strategy considered the following procurement models and evaluated each against the unique characteristics of the New Museum project.

. Traditional Construct Only;

· Design and Construct (including variants such as Early Contractor Involvement ECI, and Guaranteed Maximum Price mechanisms);

· Managing Contractor; and

· DBM.

A Design Novate and Construct (modified to include ECI & GMP) has been identified as the preferred model for the MAAS project.

This model represents the most appropriate procurement strategy as it delivers key benefits of early contractor involvement, design and briefing flexibility and a strong cost control and risk transfer framework. On the balance the proposed procurement strategy, if it adopts well designed risk transfer mechanisms, provides the project with the best framework to manage specific project requirements of:

· operational Requirements & Flexibility;

· scale and Complexity including commercial opportunities;

· risk Management and Transfer;

· cost certainty;

· time certainty;

· political considerations;

· stakeholder considerations; and

· quality including brand protection and Innovation outcomes.

The use of the model will also allow for a staged development and construction processes, which can enable achievement of MARS' programme objectives.

The proposed DN&C methodology should include enhancement considerations as to meet the specific requirements and objectives the project. Enhancements include considerations in respect of early contractor involvement strategies. To match the requirements of MAAS the strategy should be tailored to a process of taking the design to developed design level with the view of achieving a GMP with the contractor. Consideration could also be given to select maintenance and operation enhancements. The cost plan and project management resourcing requirements have been analysed in the context of the costs of this type of procurement strategy for inclusion within the funding profile.

1.13.4 Capacity of Delivery Agency

A Change Management Plan has been prepared which provides an overarching planning strategy for the Project. The purpose of the change management plan is to:

· illustrate relevant change management strategies;

· identify key change issues such that associated cost impacts of the enabling change supports the investment case and can be included within the financial model;

MAXIMISE THE OPPORTUNITY OF OUR NEW PLACE.

1.12. Key Project Risks and Mitigation StrategyRisk management is a critical business process for achieving the MAAS investment case outcomes. As such an ongoing risk analysis exercise has been undertaken during the development of the Final Business Case to identify, analyse and quantify (where possible) the effect of material risks associated with the delivery of the New Museum for MAAS Project.

Risk workshops and individual discussions were held in August and September 2016 attended by representatives from MAAS, Arts NSW, and the Department of Justice. Input has also been provided by technical consultants including design, cost planning, engineering, legal and financial advisors.

MAAS recognises that effective risk management processes will need to be applied in a number of contexts, including:§ establishing effective processes for the management of risks affecting

the project planning and procurement activities;

· structuring the contract arrangements to ensure an optimum allocation of risks between Government and the private sector;

· developing a risk-adjusted benchmark for value for money for the purposes of bid evaluation; and

· ensuring the effective management of project risks that are retained by Government.

To analyse and mitigate project risk, the project governance has established a Risk Management Strategy and Register, The risks documented have and will be addressed at the Project Control Group (PCG), Project Steering Committee (PSC), with the MAAS Board of Trustees and at the Finance Audit, Risk Management Committee (FAR MC). The Register will be used to continuously monitor and review the risks identified as potential threats to the successful delivery of the FBC and subsequent project phases.

The project risks identified in the Risk Register relate to all phases of the project including the FBC, Planning, Design and Implementation of the project.

The highest rated risks, or those which pose significant threat to the project during early project phases are:

· site definition and acquisition;

· congruency of the project vision across project stakeholders;

m the tight time frames for the development and delivery of the FBC; and

4 ensuring cross agency briefing and engagement on the New Museum Project.

"Audiences in Western Sydney are the big winners out of today's announcement. Practicing and emerging artists will also benefit by creating and offering content designed specifically for the local community."Source: Excerpts from 'Powerhouse powers into Parramatta: $30 million to grow Western Sydney Arts Precinct,'26th February 2015,htips://www.nsw,gov.au/media-releases-premier/powerhouse-powers-parramatla-30-million-grow-western-sydney-arts-precinct

1.12 STAKEHOLDER ENGAGEMENT AND CONSULTATION

There are a number of stakeholders associated with the development stakeholder engagement required for the following project phases: of the New Museum, Including relevant Federal, State and Localgovernments and govemment bodies, institutions and representative • Design Competition and Planning Phase bodies within the arts and cultural sector, and the broader Sydney

community. Active stakeholder engagement activities, specifically with • Procurement Phase

the MAAS board of Trustees, State Government agencies and the Cityof Parramatta Council have been undertaken during the development of • Construction Phase

the New Museum project. Issues raised through during consultationactivities have been captured and recorded by the project team • Closure of Ultimo

members in attendance. An issues and consultation record has beendeveloped and maintained and reported back through the project • Transition and Opening of the New Museum for MAAS at Parramatta governance reporting mechanisms.

A Stakeholder Engagement Strategy has been developed to outline the

media and engagement activities required for the New Museum project.

The Strategy identifies the projects main stakeholders and the

· define the role of the change management and governance responsibilities to manage change impacts;

· identify the change management process and reporting structure; and

· consider other associated impacts such as issues and risk management interfaces.

The Change Management Plan aims to provide an overarching framework outlining the major change management principles, governance, methodology, timeframes and accountabilities for the Project.

It describes, at a high-level, the strategy MARS will employ to manage the substantial organisational change that must occur as part of the renewal of its business under this investment case.

In line with the MAAS values, the change management plan will help realise the following benefits:

· a workforce that embodies human ingenuity, that is clever, adaptable, inventive and perceptive and contributes to the development of the Galleries, Libraries, Archives and Museums (GLAM) talent pool;

· systems and processes that enable human ingenuity from the workforce;

· retention of core specialist staff throughout and beyond the transition period;

· a process of knowledge sharing to ensure that specialist knowledge is not lost as the workforce is reshaped; and

· continued engagement and job satisfaction of the entire MAAS team, working on the transiting across sites.

1.14 KEY ASSUMPTIONS AND STRATEGIC DIRECTIONS

This Final Business Case has been developed based upon the following assumptions and strategic commitments from Government. The assumptions listed in the below table have been developed as a result of engagement with key Government stakeholders and outcomes of project governance meetings.

The strategic commitments as referenced below have been derived from key announcements made about the project by Government.

Assumption

The State Government will acquire the full site.

Reason

Further information

The proposed site is comprised of several lots of which government may acquire all or select dependant on Governments aspirations for the New Museum.The site acquisition process is running concurrent to the development of the FBC. Resolution of site boundaries is not anticipated until after the FBC submission to CIOResolution of site acquisition is expected March/April 2017.

To enable the development of the FBC.

Exclusion of financial impact of non-core museum function commercial opportunities from base investment case.

Affordability and external commercial funding opportunities to be considered pending direction from Government.

Non-core museum functions are those operations such as food courts and retail that are not necessary to enable the day-to-day operations of the facility. Commercial opportunities have been considered within the planning analysis of the FBC and can be utilised in further investigations if commissioned.

An Early Works program will be able to commence post funding announcement.

Assumes site acquisition.

Full analysis and investigation as to the viability and cost of a broader Arts and Cultural Precinct is not be detailed within the FBC.

Outside of FBC scope.

A more detailed analysis will be provided by Arts NSW as part of the broader submission to Cabinet.

The Case for Change is the NSW's Govemment's policy decision to relocate the Museum to Parramatta.

It is outside the scope of the FBC to prove the case for the move to Parramatta.

The base case is a new museum on the Parramatta site.

NSW's Governments policy decision is to relocate the Museum to Parramatta, an option to 'do-nothing' and stay on the Ultimo site is not contemplated in line with assumptions made in the Preliminary Business Case.

The FBC Economic Appraisal will utilise the Ultimo site as the base case to enable the required comparative analysis to inform the Investment Case.

The Ultimo site will be closed in its entirety before the New Museum opens.

To facilitate the movement and installation of large scale objects in the new facility.

Satellite or partial relocation has not been contemplated within the FBC.

Outside of FBC scope.

That the Project is a State Significant

Development (SSD).

Schedule 1 of the State and Regional Development 2011 (SRD 2011) planning instrument outlines that as an information and education facility (including museums and art galleries) with a capital investment value over $30 Million it is classed SSD.

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Several strategic commitments in relation to the New Museum project have been made by the NSW Government. These commitments have been used to inform the content, strategic direction and decision making within this Final Business Case. It has been determined that the museum will be subject to a design competition, which will result in an iconic building that will have 40% more of the collection on display. It is also expected that the project will commence during this current term of government.

"We're committed to providing locals and visitors with world-class experiences right across NSW and this investment in arts and culture in Western Sydney is a clear example of that."

Source: Excerpts from 'Powerhouse powers into Parramatta: $30 million to grow Western Sydney Arts Precinct,'26th February 2015, https://www.nsw.gov.au/media-releases-premier/powerhouse-powers-parramatta-30-million-grow-western-sydney-arts-precinct.

1.15 CONCLUSION

1.15.1 Recommendation

This Business Case establishes the minimum investment case required to support the State's commitment to the development of the New Museum at Parramatta.

The investment case provides substantiation of the $724 million capital and $99.21 million transition recurrent for the preferred Option 02A, required to enable the New Museum for MAAS to maintain its future business, cultural, community and strategic obligations.

Final Business Case Attachments

Attachment A: Vision Statement

Attachment B: Financial Appraisal

Attachment C: Economic Appraisal

Attachment D: Audience Demand Analysis

Attachment E: Risk assessment and Management

Attachment F: Urban Planning Framework

Attachment G: Heritage Assessment

Attachment H: Site Infrastructure Assessment

Attachment I: Flood Modelling

Attachment J: Parking and Traffic Generation Analysis and Public Transport Provision

Attachment K: Geotechnical Contamination Assessment

Attachment L: Commercial and Operational Model

Attachment M: Concept Design

Attachment N: Capital Cost Model

Attachment 0: New Museum Document

Attachment P Master Project Schedule

Attachment Q: Procurement Plan

Attachment R: Change Management Framework

Attachment S: Stakeholder Engagement

Attachment T: Governance Arrangement

Attachment U: Benefits Realisation Plan

Attachment V: Commissioning and Launch Plan

Attachment W: Workforce Profile, MAAS

Attachment X: Collection and Logistics Plan