Albert Park’s pit lane redevelopment delayed by two years

The Allan government has delayed construction of a new Formula 1 garage at the Albert Park circuit and corporate hospitality facilities required to funnel more revenue back to the global owners of the sport.

The facilities won’t be ready until at least 2028, two years behind the schedule originally agreed in a contract with Formula 1, the government’s own documents show.

This masthead revealed in 2023 that, under a previously undisclosed provision within Victoria’s contract extension to keep the Australian Grand Prix, the state agreed to build world-class garages and new or substantially refurbished corporate hospitality facilities in time for next year’s race.

The state also agreed to forgo all corporate revenue generated within Paddock Club, a VIP area for high-end sponsors, celebrities and other special guests.

Under an agreement previously struck between founding grand prix chairman Ron Walker and former F1 supremo Bernie Ecclestone, the Australian Grand Prix kept the revenue it raised through the Albert Park Paddock Club.

When asked how much the construction would cost the state, a Victorian government spokesperson said the commercial agreement was confidential.

“The pit building redevelopment will future-proof Melbourne to hold this iconic international event for years to come – cementing our reputation as a global sporting destination,” the spokesperson said.

“Engagement with local clubs and Albert Park residents is under way so they can help shape the project.”

When questioned about whether the refurbished facility would be ready by the agreed date of 2026, Australian Grand Prix Corporation chairman Martin Pakula was non-committal.

“Ah, no. Let me be very clear about this, in terms of infrastructure investments, they are matters for governments to announce and talk about and not a matter for me to talk about,” he said.

“The government will talk about those things in its own time, and it’s not something I’m talking about at this stage.”

Pakula, as a former government minister responsible for the grand prix, was directly involved in the negotiations with F1.

As part of the contract, the government agreed to provide permanent or temporary corporate facilities to accommodate up to 5000 people. The current capacity of the paddock club is 2000 people, with the average ticket selling for more than $6000.

According to documents published by Development Victoria, the government agency responsible for the Albert Park redevelopment, work on the new pit building will now not commence until after the 2026 race.

It will be completed, at the earliest, in time for the 2028 race – two years after the date stipulated in the F1 contract.

The terms of the Victorian government’s 12-year agreement with Liberty Media – the $12.4 billion, Colorado-based company that owns Formula 1 – to stage the Australian Grand Prix until 2037, including the annual fee paid to F1 to secure the promoter’s rights, are subject to strict confidentiality.

The Australian Grand Prix has some of the oldest pit lane and paddock club facilities in the world.

The world’s newest race, Las Vegas, recently constructed its pit lane and paddock building for an estimated $US500 million ($794 million). Tickets to the paddock club in Vegas sell for an estimated $US15,000 ($24,000).

In 2023, the AGPC commissioned Cox Architects to conduct an $847,000 feasibility study into how best to revamp the permanent grand prix buildings at Albert Park. No further funding has been allocated to the project in the state budget.

On Friday, neither the government nor event organisers would comment on the potential cost to Victorian taxpayers.

Earlier this week, Pakula defended the cost of staging the grand prix.

“The reality is, when you want to be in the business of running an F1 event, there’s a cost involved,” Pakula said.

“The economic return is substantially greater than the cost to the taxpayer, and if we didn’t want this event then there would be jurisdictions lining up to take our place, including one to the near north.”

Last year’s event posted a $102.3 million loss, according to the AGPC’s annual report.

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