Alley Sale Clears Way for 21-Storey Melbourne Tower

Melbourne City Council has approved the sale of the historic laneway Gough Alley to developer Hickory Group. 

The decision was made at this week’s council meeting and was part of a policy process. 

Hickory Group owns the property around the laneway on the Kilkenny Inn site at the corner of Kings and Lonsdale streets in Melbourne’s CBD. 

The developer recently won planning approval for a $110-million, 21-storey office tower project that will restore the facade and interiors of the Kilkenny Inn.

This triggered a policy process whereby Gough Alley on the site had to be sold to the developer by the council in order for the approved plans to go ahead. 

Councillors were then required to make a decision on the transaction after assessing whether it made more sense to retain the alley as it was or if there was a greater benefit to allowing it to be replaced by extending Manton Lane in Hickory Group’s plans.

The value quoted for the transaction was $4.2 million.

Councillor Philip Le Liu, who moved the motion, said the decision to sell the laneway made sense.

“I think anytime when we lose a particular laneway it will always be of particular interest but in terms of weighing it up, this is probably the right approach to take and that area will be great for redevelopment,” Le Liu said.

▲ Hickory’s proposed plans showing the entrance to the extended Manton Laneway in the larger brown building to the right of the Kilkenny Inn.

Deputy lord mayor Nicholas Reece said the entire proposed project including the sale of Gough Alley had been scrutinised from the moment Hickory submitted the application for the project.

“I’m on the record as a major fan of protecting and preserving Melbourne’s laneways and was very pleased recently with Councillor Leppert to release a practice note which detailed all the new protections which have been rolled out in this term to protect Melbourne’s heritage laneways,” Reece said.

“We know what a key part of Melbourne’s identity and attractiveness it is, and so we can assure residents that we have very thoroughly assessed this development both back when it first came before the Melbourne City Council in 2021 and now again as we go through the process of this transaction.”

An arson attack earlier this year left only the facade of the inn remaining after the roof collapsed.

Investigations have not revealed any suspects and, at the time, was impeded by the amount of debris on the site.

Since then Gough Alley has not had any property walls bounding it, rendering it unable to be considered under the council’s Flash Forward and other programs to activate Melbourne’s laneways. 

The proposed plans would mean demolishing what remains of the laneway and extending a pre-existing laneway from Lonsdale Street to Little Lonsdale Street called Manton Lane.

Gough Alley previously had a dead end. 

“At the moment, Gough Alley effectively services only one property owner whereas with the Manton Laneway it will be a fantastic new pedestrian link for people as part of the city,” Reece said.