The City of Melbourne has signed a $7 million environmental upgrade agreement that will see a landmark Melbourne office tower retrofitted under its 1200 Buildings Program.

The agreement between the City of Melbourne, The Australian Environmental Upgrade Fund and the owners of the former Ansett building at 499-501 Swanston St is the largest to date and is expected to reduce the 19-storey building’s carbon emissions by more than 600 tonnes a year.

The $7 million retrofit includes major upgrades to the building’s heating and ventilation systems, air-conditioning and cooling systems as well as a $2.5 million lift upgrade. 

The upgrades aim to reduce carbon emissions by an estimated 606,700kg a year and cut more than $80,000 off the building’s energy bills. 

Lord Mayor Robert Doyle said the record deal was another step toward Melbourne’s bid to become a zero-net greenhouse gas emissions city.

“Melbourne is already one of the world’s most liveable cities and we know that liveability, prosperity and sustainability are closely linked,” Doyle says.

“This agreement brings us a step closer to becoming one of the world’s leading sustainable cities.” 

Councillor Arron Wood, Chair of the Environment portfolio, said the city’s building owners are responding to the 1200 Buildings Program, with upgrades completed or in progress for more than 1.65 million square metres of lettable commercial space in Melbourne.

“Research told us that over the life of the program, 1200 Buildings will generate 8000 jobs and more than $2 billion in economic uplift for Melbourne, and we are well on our way,”  Wood says.

Sustainable Melbourne Fund is the administrator of environmental upgrade finance on behalf of the City of Melbourne. Chief executive Scott Bocskay says the signing is a significant milestone.

“Today, we celebrate with the owners of 501 Swanston Street as they use environmental upgrade finance to upgrade their building to achieve superior environmental and economic outcomes,” Bocskay says.

Representing PDG and the Zagame Group as owners of 501 Swanston St, CFO of PDG Barry Calnon says the company wants to turn the tower into a workplace of choice. 

"The outcomes from an ESD perspective will return 501 Swanston St to its heyday as an innovative, energy-efficient and iconic building on the northern Melbourne city skyline.

“We are delighted to continue our close co-operation with the SMF, the City of Melbourne and its partners, for the green focussed re-positioning of our 501 office tower and would like to take this opportunity to thank them for their support to make this possible.”