The Bairnsdale Motor Inn on the Princes Highway has successfully been sold after languishing on the market for several years.
The property has been bought by a credible Melbourne development company with plans underway to redevelop the site.
It’s understood that Kmart is considering relocating its new store there, which has raised some concerns within Bairnsdale’s CBD.
The Bairnsdale Chamber of Commerce and Industry says it has been approached by businesses worried it could potentially create a domino effect for others to follow suit.
Kmart, which last year moved out of its previous site in Nicholson Street after Woolworths signed an agreement to rent the building, is understood to be very keen on the location.
The six acre site, opposite New Age Caravans, is believed to fit the bill for Kmart’s redevelopment plans.
Comprising four acres zoned mixed usage and two acres zoned residential, the Motor Inn has been on the market for the past five years and recently the asking price was reduced from $4.4 million to $4 million.
The Advertiser has been told that a Melbourne-based developer, experienced in executing retail construction in regional areas, has signed a contract to purchase the site subject to due diligence and the usual approvals in relation to development of the site.
While the development proposal was initially submitted to the East Gippsland Shire Council, it’s understood it is now with Victoria’s Planning Minister.
Vice-president of the Bairnsdale Chamber of Commerce, Mark Hopley, said he had been approached out of concern that Kmart’s relocation out of the CBD “could split the town.”
Mr Hopley referenced Morwell when the Mid Valley Shopping Centre was established and the drain it placed on businesses in Morwell’s CBD.
“We want a thriving Bairnsdale and some are concerned if Kmart goes up there, others will follow.
“I don’t like it, but there’s nothing we can do to stop it,” Mr Hopley said.
The Bairnsdale Chamber of Commerce has written to Kmart suggesting three alternative sites, one of which includes Dahlsens in Dalmahoy Street.
However, the Advertiser understands the site is considered too small for Kmart’s purposes.
The owners of the Bairnsdale Motor Inn, Dianne and Luke Peters, questioned whether others would follow Kmart to the west end of town given the site had been for sale for so long.
“We approached Woolworths some time ago and they weren’t interested in moving up here,” Mr Peters said.
Woolworths is now refitting out Kmart’s former site and is expected to move in there later this year.
The East Gippsland Shire Council is keen to keep Kmart in Bairnsdale.
Chief executive officer, Anthony Basford, said council had been very clear, since last year, that “Kmart is a valued business in Bairnsdale and important to the retail make-up of our local economy”.
“We want Kmart in Bairnsdale, and have also indicated a preference for the business to occupy an existing site in the CBD (as) this is in line with council’s current strategies,” Mr Basford said.
“However, we have indicated that we won’t stand in the way of Kmart’s proposal as council does not want to jeopardise the jobs, particularly for young people, that Kmart brings to town.
“We will continue to work with Kmart to get the best possible outcome for Bairnsdale.”
A planning scheme amendment would be required to support the proposal to redevelop the Bairnsdale Motor Inn site in its current form.
Mr Basford told the Advertiser it is likely the matter will be determined by the Planning Minister, Richard Wynne, through the Building Victoria’s Recovery Taskforce, taking the decision away from council.
The taskforce has the ability to fast track planning permits and planning scheme amendments that may otherwise face lengthy delays.
Mr Basford said the minister’s office “has assured us there will be consultation”.
Gippsland East MP, Tim Bull, said it was important to “keep this destination store and jobs in Bairnsdale.”
“I do not know if there are multiple site options that meet Kmart’s needs, but I would imagine they are limited for a store of that size footprint with a car park,” Mr Bull told the Advertiser.
In an email to this publication, a Kmart spokesperson said the business was “still exploring options for a larger true format Kmart”.
Kmart converted the old Target Country store in Nicholson Street into a new format K-Hub store last year and is trading well.

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The Bairnsdale Motor Inn has been sold with redevelopment of the site currently being investigated. K23-9399