The sale of the Nicholas Building: an extended history
With the city's "last creative space of scale" entering the final stages of its sale, questions are raised as to whether things can, or should, ever be the same
Harry Norris was the kind of architect who felt an obsessive kinship with his buildings. The surest proof is that he retired and then, immediately afterwards, dropped dead. Buildings do this; they conjure images of the immortal, of monuments left standing long after their occupants have withered away – abstract images of beauty, destruction, and death.
At 31-41 Swanston Street, opposite the little square beside St. Paul’s Cathedral, one of Norris’s greatest works still stands tall. That the Nicholas Building was conceived as a tribute to the majesty of the brothers Nicholas should perhaps not surprise us. Nowadays it’s considered outré to build a palace for yourself; but 95 years ago, if you were any sort of worthwhile entrepreneur, you knew the only path to eternal public worship was through the gate of free-standing architecture. Once Alfred and George Nicholas’s fortune was consolidated – they developed Aspro, an early tablet form of aspirin which at one point was the world’s foremost cure for headaches – the logical next step was to build as grand a monument as possible. And they did. The Nicholas Building, designed in 1924 and built by 1926, is 40.3 metres tall. The maximum height a building in Melbourne could legally stand in 1926 was 40.3 metres tall.
95 years later, as I walk through it and marvel at its vestigial kind of glory, the height of the building seems utterly ancillary. Instead, I’m left looking dumb, mouth agape, faced with a never-ending barrage of historic hallmarks. The faience façade in Wunderlich terracotta. The wide cornices. The Ionic pilasters mounted atop Doric columns. The dusty central light-well. The barrel-vaulted, leadlight ceiling of the historic Cathedral Arcade, the last of its kind in Melbourne. The patterned tile floor. The historic red letter box.
But, beyond the sorts of thing the real estate listing might detail, there are hidden delights too. Everywhere are walls with broken or missing tiles, graffiti whose letters dried decades ago. The elevator creeps meekly along its shaft, and when the door opens it sounds like an old leather bag being stretched. I’m charmed to find that there are fascinating discrepancies between floors, too. The seventh smells beguilingly of old furniture and ashtrays; the third is almost entirely empty, a haunting vault of linoleum flooring and faded white tiles. When I stumble upon the second level, and notice that the linoleum has turned to parquet and the white tiles turned to cream, I momentarily believe that I’ve entered some bizarre fantasia.
These are the charms of historicity, charms only apparent to those who go searching within the bowels of the building. Good architecture, after all, reveals itself slowly to a keen eye. “It’s in pretty bad nick, which people seem to like,” confesses Gary, who runs an architectural hardware business and whose studio – neat, calm, and resplendent with light – stands in stark contrast to the other studios I visit. Upon his tweed jacket he wears a lapel pin which features a snake wrapped around a sword, the crest of his family name.
He’s been in the building three years all up, having permanently relocated to Melbourne, from Sydney, in January 2020. When we talk about border restrictions – his business involves production sites in multiple states – he speaks with a measured fatigue. I ask him about the quietness of the building, which is near-empty on the day I visit. He nods. “Sometimes,” he says, “it’s like a morgue.”
Perhaps this aura of decay has something to do with the news, broken on June 18, that the Nicholas Building was up for sale. The owners, a conglomerate of wealthy families, names like Smorgon, Silverstein, Price, Davis, and Cohen, had owned the building since 1973. Tenants tell me they’ve been great to deal with, and none begrudge their right to sell. Maybe it was due to the havoc of the pandemic, maybe internecine quibbles between families. But then again, by the time I visit the Nicholas Building it’s September, and the sale process is already so far down the line that the question of why it’s being sold seems beside the point. Sold it will be – and that’s that.
“A repositioning opportunity” is what Joseph Walton calls it. Walton is a director and officer in effective control at Allard Shelton, a commercial real estate firm of relative renown who manage the Nicholas Building and who are partnering up with another firm, Colliers, to sell it. From all indications, Walton is a bit of a helmsman, el jefe; in 2014 he presided over the $80 million sale of The Block Arcade on Collins Street, an enormous deal which was also a collaboration with Colliers. In his photo on the Allard Shelton website, he wears a pinstripe suit and a red power tie.
I asked Walton what a “repositioning opportunity” meant. “There’s opportunities,” he told me, “to look at retail activation onto the rear laneway. There’s opportunities to try to activate the rooftop.” This exemplified a certain suite of rhetoric which Walton deployed and which thoroughly puzzled me. Talk of “activation points” and “repositioning” and “trophy assets” and “commercially-oriented performance hurdles” and descriptions of “a once-in-a-generation opportunity to invest” left me cold, and seemed inadequate in describing precisely what a building like the Nicholas actually means to people.
Talking to Dario Vacirca, a spokesperson for the Nicholas Building Assocation (NBA) and one of three members in its executive committee, I got a slightly clearer sense of why the Nicholas is so alluring to its occupants. “The architecture itself,” he told me, “lends to a kind of monastic quality, where practitioners will go into their spaces, close the door, and they’re in their own universe.” Which is not to say that the building and its 100-plus tenants lack a sociable spirit – to the contrary. Though the NBA only numbers 40 to 50 paid-up members, a part of its mandate is to aid in unifying the entire building’s vertical creative community, presenting a firm and consolidated front against decidedly non-artistic matters like rent increases.
There is, of course, a certain rift between the language of business – punctilious, procedural, and cold – and the language of artists – romantic, fervid, and virile – which has underscored much of the tension between the two opposing groups of this lucrative encounter. When people who aren’t in business hear “repositioning”, they can’t help but think that whatever’s currently in will inevitably be going out. Walton repeatedly assured me: “I don’t think they’ve got a whole lot to worry about” – this in spite of the fact that I’m not the one who needs assuring. “I think a lot of the noise around it and concerns of the NBA in particular are not concerns that need to be held at the moment, and are certainly not well-founded at this stage in the process. Their interests,” he told me, “are in good hands.”
But there is an undeniable spirit hovering around the sale of the Nicholas Building, one which Walton’s assurances do little to alleviate. You might call it a spirit of dissolution. It is the same spirit powering the “significant interest” which Walton told me the Nicholas sale has attracted. It is the same spirit which undergirds recent reports of an increased rate of large CBD building transactions, including the sales of the historic Invicta and Tomasetti Houses, in April and May respectively. And it is the same spirit which visited upon the Astor before it was saved, or upon the Alphington Paper Mills before its redevelopment, or visits upon every Robin Boyd house that hits the market.
Or, upon Burnham Beeches, an Arte Moderne mansion in Sherbrooke built for Alfred Nicholas in 1933, and designed by, yes, Harry Norris. Having fallen into decrepitude after sitting more or less unused since 1981, there have been a predictable succession of failed attempts to refurbish the house and its surrounds. Then, in 2019, plans to turn it all into “Australia’s first six-star luxury retreat” seemed to build up meaningful momentum. Perhaps the plan being worth $90 million had something to do with the interest it garnered.
Even though the plan now lies in turmoil – apparently because of Heritage Victoria’s severe helicoptering of the development project – it’s precisely the kind of eventuality which has the Nicholas’s occupants worried. Tenants and estate agents both are quick to acknowledge that with the protection of Heritage Victoria, physical changes to the building are unlikely. Tristan Davies, president of “action group” Melbourne Heritage Action, made the same qualification in a piece for CBD News. But this was never really the main concern. Rather, “the cultural heritage of the Nicholas Building,” Davies wrote, “something not as tangible and not as well protected by heritage laws, could well be under threat.”
In my own study of the impending sale, this, I have discovered, is the crux of the issue, the pertinent clause, the question on everyone’s lips: what is it, within the Nicholas Building, which cannot be protected? Another way of phrasing it: when Walton tells me “we think the building will largely stay intact,” what is he really saying?
The solutions proposed to the problem of the sale provide, in a way, an indirect answer to this question. Davies suggests the adoption of a covenant, similar to that used to govern the Abbotsford Convent. The example is illustrative, and merits a closer examination. In 1997 the Abbotsford Convent, a cultural landmark at least 150 years old, was up for sale. A developer swooped in with a beguiling proposal: let’s build 289 new apartments, a six-story tower overlooking the Collingwood Children’s Farm, and just for good measure, let’s demolish a few of the heritage buildings. $3 million in pledges and 6,000 objection letters later, the State Government’s hand was forced. The site was bought and gifted to the public, in a kind of insane reversal of motive which nobody questioned because nobody was on the property developer’s side. As a part of the purchase agreement, the Abbotsford Convent Foundation was established, uniquely enshrined as caretakers of the site.
Now the same dynamic has emerged, 24 years later: another heritage gem is at the mercy of the market, and all parties who aren’t a property developer – i.e. the 100-plus tenants, the Association, the broader Melbourne arts community, old people who remember when the building was a Coles, and the young girls who get their nails done on the seventh floor – have coalesced into a uniform mass advocating for benevolent ownership and self-governance. The NBA has made crystal clear that it wants assurance it will remain “central to future building operations,” in the form of a written pact “which recognises our extraordinary contribution to the cultural and economic life of Melbourne by securing our tenancies and providing ongoing support to elevate our program of events and projects.” In other words, guaranteed power and guaranteed money, two things which artists so rarely possess.
All of this is outlined in a petition which, at the time of writing, numbers almost 13000 signatures. The petition is an interesting document. It first cites economic data, from a report by SGS and the Creative Industries Innovation Centre, outlining the numerous economic benefits arts industries provide – something in the range of $45 billion in GDP every year. (That the report was published in 2013, and the CIIC doesn’t even exist anymore, is proving uninteresting to everybody.) The argument then careens into a kind of heedless, fervent passion. “Beyond the economics, it is the feeling… The Nicholas Building community have done this off their back for so long. But we can no longer afford to do it on our own. Without the support of those with the power and money to stave off the imminent exodus of another 100 creative souls from our city centre, we may as well stay at home and let Netflix tell us the extent of our culture. No thanks!”
It may be worth reading that quote again, so exemplary is it of the impassioned rhetoric surrounding talk of the sale thus far. Of course, we should expect nothing less; we are talking here about a group of desperately sanguine creatives who inhabit one of the rarest and most exclusive artistic ecosystems left in any modern metropole. Indeed, the uniqueness of the building’s community is relied upon heavily as an argumentative crux, wheeled out as indisputable evidence that things simply must remain as they are. Davies calls the building “an oasis of creativity”. Says Maria Yebra, manager of Laneway Learning, a community learning initiative perched on the building’s third level: “Everybody is very community orientated and we care a lot about each other. We know each other’s names.” “It’s about being part of something bigger than yourself” says handweaver Mary Burgess, appearing in a promotional video featuring several of the building’s tenants which was produced by The Age. The film’s next shot is of illustrator Rebecca Stewart. She sits before the camera, wearing a wry smile. “Artists are very resourceful,” she says, “so we will figure something out.”
Figure something out they did, or at least attempted to. On June 28, in an interview with Virginia Trioli, Vacirca forewarned us to “watch this space – we will be making a bid.” He qualified his words by indicating that the NBA was having meaningful discussions with “all levels of government” and “across the philanthropic sector.” By this point, the NBA had already been approved for a “discretionary grant” of $40,000 from the City of Melbourne in order to construct a broader business case. This endeavour, Vacirca told me, was originally completely independent of the sale. In fact, a business case had been on their minds for a long time; the NBA had long understood that it needed to begin “strategizing different ways that we could build resilience and sustainability for the community, knowing that, because [the building] was privately owned, the market could just push us out at any stage.”
It was only late in the process of attaining the grant from the city council that whispers were “heard in the wind” – whispers of an impending sale. When the NBA asked Allard Shelton for clarification, they more or less confirmed that certain wheels were in a certain motion. “That amplified our push to council to ensure that we had funding,” Vacirca told me. The $40,000 was granted one week; the building was officially for sale the next.
The details of the business case, which the NBA developed and then laid bare before the state government, are confidential, but we can piece together a reasonable idea of what it contained. On the broadest possible level, it presented an acquisition model, outlining the various procedural concerns with which any proposal of this sort must contend: how the building would be acquired, financed, governed, how the loans would be paid back. There were certain key aspects of the proposal, fastidious little details, which Vacirca shared with me. For one, the matter of the covenant: the idea, in this case, was to enshrine not the NBA per se, but a new organisation called the Nicholas Building Arts Foundation, which would own the title, govern through a board, employ a property manager to handle contracts and tenancies, and empower the NBA to create a “social enterprise model.”
And then there’s the loan. The crux of it: the Victorian Government would need to chip in, handsomely. There would need to be a start-up grant, as well as seed funding for the establishment of the NBAF and the social enterprise model. But this all had a time horizon, and Vacirca told me that, once proper governance was consolidated, the idea was that the Nicholas Building “would never be coming back to the government again for money – that it becomes self-sustaining.” The only further interactions would be a mechanised, glorified version of a bank transfer, the loan gradually being paid back over a period of 30 to 40 years using current tenant rates.
Well, by September 3, it apparently had all gone to shit. In an email to signatures of the petition, the NBA announced that, the day before, the state government had rejected their request for assistance, “would not loan us the finance to purchase the building,” and that we all now needed to spam our public servants with desperate, beseeching emails. I asked Vacirca if anyone from the Victorian Government had given him a reason. “They said the words, ‘It doesn’t suit our criteria.’” Nothing more than that? “Nope.”
When I read the email, my mind immediately drew towards a key squabbling point: the price. Early estimates had the property’s value pegged at $80 million. In the interview with Trioli, Vacirca indicated that the NBA anticipated something in the $40-to-55 million range. “I don’t know what the basis of that [figure] was,” Joseph Walton told me, with an unmissable degree of bemusement. Vacirca admitted that the NBA had since upped its estimation; that the earlier figure was a combination of deliberate lowballing and insufficient knowledge, given that proper evaluations hadn’t yet been done. Indeed, Vacirca struck me as utterly unphased by the soaring price which was being bandied about in discussion of the building’s sale. Instead, his claim was that the community benefits which the Nicholas Building billows forth – monetary and otherwise – would more than pay back the government’s loan, and that, in fact, the building is worth much more than its $80 million evaluation.
With all of this in mind, the case refusal is somewhat curious. On one hand, the sort of proposal outlined by the NBA isn’t all that new. The Convent has already been mentioned; Ross House is another example: community-owned and self-managed, though also a non-for-profit, which the Nicholas Building decidedly is not. But the government’s rejection also shatters against a much deeper plane, the plane which cares little for pecuniary specifics, the plane where the argument is unerringly simple: fund the arts if you want a healthy society, withhold finance if you don’t.
A recent report from the Centre for Future Work, part of the Australia Institute, goes some way in crystallising what exactly happens when arts initiatives are feebly supported. In the scale of arts investment, Australia’s OECD rank is low; our GDP share allocated to the arts (0.9%) is .3 percentage points below the average. This left the creative community more or less defenceless against the devastating implosion which the pandemic has wrought. “Arts and Recreation Services,” the report claims, “were hit harder than any other industry by the pandemic.” The proof? By April 2020, an astounding 53% of its businesses had ceased operating. Given this outlook, the report makes numerous recommendations, one of which, rather vaguely put, is to “fund the national cultural institutions properly.” Yet even to the most parsimonious among us, the Nicholas’s status as a “cultural institution” should seem, it must be admitted, almost inarguable.
There is a separate question to be asked, however: where should the money come from? When Joseph Walton assures the current tenants they have nothing to worry about, he’s invoking the fact that the building has been privately owned since its construction, and that the organic development of the building’s creative community has been, for decades now, abetted by its ownership and management. This fact also hints at the possibility that government involvement isn’t the panacea which some trust it will be. One tenant I spoke to was rather suspicious of the potential for government funding. They argued that it offers “a perception of accountability,” and gives “the impression that someone’s getting something and someone else is missing out,” which was just the latest in a series of orations all forwarding the same, simple message: we just want things to stay as they are.
But remarkably few to whom I’ve spoken, or whose urgent missives on the Nicholas sale I’ve read, have dared raise the prospect that, perhaps, keeping things the same is simply no longer possible. Out of curiosity, I put this idea to Dario, asking whether the status quo was still viable. He was refreshingly candid. “On a philosophical level, absolutely, it’s no longer viable. And it shouldn’t be. Things should always change, shift, and take on new characteristics… We’re not into business as usual.” Maybe this was beside the point, but I felt I had to ask.
On September 7 we learned, in case we’d forgotten already, that a no from the Victorian Government is never really a no. An email from the NBA informed “Friends of the Nicholas Building” that “negotiations with the State Government around the purchase of the building are at a critical point,” and that “we are getting cut-through.” What exactly “cut-through” meant wasn’t clear – again, beside the point – but the gist was that things were moving in the right direction. It was a hint, a spoiler alert, which suggested that what has revealed itself to be a fundamentally conventional conflict – the lordly versus the meek, the moneyed versus the artists, the Goliaths versus the Davids – would be coming to a suitably conventional end.
Turns out that the messaging on September 3 had actually kind of worked. Enough pleading emails had been sent, enough public servants annoyed, for negotiations between the NBA and the state government to recommence. For now, everyone draws a breath. At the time of writing this piece, I am told there’s a decision coming in the next few days about whether the negotiation process can continue on. Not a final decision, not a full-stop, but another comma added onto what has been a long and protean sentence. All is finely poised, and though Vacirca is optimistic about a good outcome, he more or less has to be. “There’s only so much you can do to steer the course of history into the hands of the goodies,” he said.
This is perhaps why the story suggested itself so alluringly to me. Though there is something typical about it, there are also irresistible dynamics at play: the passion, the history, the grandeur of the building, the ferocity of the argument, the public outcry, the spirit of dissolution, the sense of an ending. A deeply involving confrontation over a venerated piece of Melbourne history, playing out against the backdrop of a desolate CBD. When I asked Joseph Walton what makes the building so special, such a “trophy asset”, he chuckled. “I don’t know where to start,” he said good-naturedly, “and I’m not sure you’ve got the time.”
And maybe it will all end inconspicuously, a heated climax undressed into a much-ado-about-nothing. Or maybe it hits on something else. As I was scrolling down the original Age article which reported the sale, my eye was caught by a curious comment. It read: “There was something very Melbourne about the largesse of those families. But now Melbourne will resume its path to become just another city with the loss.” This, more than anything else, is why I was so attracted to this story. Because there is an austere truth within it, one as facile and banal as any: this is why buildings matter. Don’t believe me? Ask the Nicholas Building tenants; they, just like Harry Norris, understand the diffuse power of architecture, the unnameable thing it gives us.