21 August 2023

What on earth is happening with the Murrumbidgee Mill?

| Chris Roe
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After two decades of promises, the Murrumbidgee Mill remains a construction site. Photo: Chris Roe.

It is arguably Wagga’s most iconic building, yet it remains vacant and seemingly abandoned.

Rich in history, the colossal red-brick Murrumbidgee Flour Mill casts a long shadow over the heart of the city and is one of the more memorable landmarks passed by thousands of motorists traversing town on the Sturt Highway every day.

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For almost two decades developers have promised renovation and redevelopment of the heritage listed site, with construction always “about to begin”.

The timeframe of 18 months to 2 years was touted periodically as things stalled and started and stalled again.

We were shown artists’ renderings of a vibrant residential and commercial precinct with apartments, a supermarket, restaurants, bars, a brewery and a 148-room Holiday Inn.

An early rendering of the Mill redevelopment.

An early rendering of the Mill redevelopment. Photo: Supplied.

Realtors spruiked a “never-to-be-repeated property opportunity” and a 2005 feature in the Sydney Morning Herald spoke of the investment opportunities for speculators looking for something outside the “oversupplied” metro markets.

The proposed $35 million redevelopment was to “create a future for an otherwise derelict site through the use of the site’s historic architecture, including its silos”, and Munro Corporation’s development manager Grant Hirst was optimistic.

“The result will be a commercial development which doesn’t lose any of the sense of history and tradition that permeates the site,” he told the SMH.

“It will be a living theme that differentiates this development from other tourism, leisure and shopping centres in regional Australia.”

Will the Lone Star shine again?

Will the Lone Star shine again? The venue remains boarded up after closing in 2019. Photo: Chris Roe.

So what happened and where are things up to now?

It all appeared to be going forward in 2012 when the old Red Lion Hotel on Edward Street was demolished and the Mill Residence, a hive of stylish new apartments and restaurants, sprang up in its place.

A company called Interlink Wagga Central Pty Ltd (IWC) was talking the talk and was backed to the tune of $34 million by Chinese investment giant, Beijing Construction Engineering Group (BCEG).

The husband and wife team behind IWC, Yu Xiao and Yanying Chen, were appointed as directors of BCEG International (Australia) and were to oversee both the Mill and a private hospital development on the Gold Coast.

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There was great optimism in 2017 when the second phase of the Mill project began with one local councillor telling the Daily Advertiser, that it was “great news and a good health check in relation to the growth currently happening in Wagga”.

As things continued slowly, the businesses that opened in the new spaces struggled to draw a crowd and the Asian Grocery, the Pig and Pastry and the Lone Star all came and went and the rumoured Mill Brew Pub never got beyond a sign saying “Opening Soon”.

A peek through the window shows that little has been done inside the Mill. Photo: Chris Roe.

If it looked like business was bad at the street level, it turned out that things behind the scenes were worse, and it’s about here that things get complicated.

Mr Xiao and Ms Chen had a third project on the go in West Wyalong where they were building a marketplace and medical centre through another company they owned.

In 2019, BCEG China launched civil action against its Australian directors, alleging they had paid for construction on the West Wyalong development by diverting US$3.4 million from the loan of $35m given to fund the Gold Coast development.

Yet another company owned by Mr Xiao and Ms Chen, Trojjan Constructions, was working across all three developments and was found to have been providing false invoices to help shuffle the money.

The Holiday Inn project is on hold

The Holiday Inn project is on hold. Photo: Savills Australia.

Inevitably, things in Wagga ground to a halt and BCEG sought to recoup its money, including around $8.24 million they had advanced to IWC to keep the Wagga Mill project moving.

Last year, Xiao and Chen were found to have breached their fiduciary duties and were liable to repay more than $12 million including the money diverted to West Wyalong and to also compensate BCEG for losses on the Wagga project plus interest.

While an appeal was heard earlier this year and the original findings were largely upheld, it seems that legal wrangling over who pays how much continues.


Will this grand old building ever be restored to life? Photo: Chris Roe.

Is there an end in sight?

Despite rumours the site will soon be put back on the market, Wagga City Council was unable to provide any further information.

IHG Hotels and Resorts, the company behind the proposed 148-room Wagga Wagga Holiday Inn, confirmed that they “still have a management agreement in place, however, the project is currently on hold and we are in discussions with the property owner on revised timelines”.

Region reached out to BCEG China and the now defunct Interlink Wagga Central Pty Ltd and Trojjan Constructions without response.

Watch this space.

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