The cost of expanding Newcastle Art Gallery will continue to climb, but lord mayor Nuatali Nelmes says the project will provide a fitting new home for the city's $126 million collection.
Cr Nelmes joined NSW Arts Minister John Graham, Newcastle state MP Tim Crakanthorp, federal MP Sharon Claydon and Newcastle Art Gallery Foundation representatives unveiling a foundation plaque at the gallery construction site on Tuesday.
The main construction phase of the expansion is due to finish by the end of the year. The gallery will open some time later after being fitted out as an exhibition space.
The council is yet to sign a contract for the fit-out, which will add to the $54 million in work already completed or under way.
The Newcastle Herald reported last month that ratepayers were footing close to $30 million of the bill, almost twice as much as previously announced.
An analysis of the council's contracts register showed the total cost of the gallery rebuild included a $43.8 million contract with main builder Hansen Yuncken, $4 million for mine grouting, $2 million for principal design, $350,000 for artwork storage, $225,000 for grouting verification and another $3.6 million on planning and design spent before February 2021.
A council spokesperson told the Herald in December that the Hansen Yuncken contract included fitting out the gallery, but Cr Nelmes said on Tuesday that the fit-out would be a separate tender.
"The construction contract includes what is known in the industry as a warm shell, however, there is going to be a specific future contract for the fit-out for display of very valuable art gallery collection works," Cr Nelmes said.
"That is the final phase for delivering this project."
The council has faced significant cost variations at the Newcastle Ocean Baths rebuild and troubled South Newcastle beach skate park construction site in recent years.
The skate park costs have ballooned from $11 million to more than $20 million after main contractor Lloyd Group collapsed in March last year.
Cr Nelmes said the increases were frustrating but defended the council's record on trying to improve the city.
"Yes, I guess that is frustrating for everyone in the business of delivering infrastructure, but what I would say is for decades nothing ever happened in Newcastle and you'd barely get some roads resurfaced and some footpaths," she said.
"I'm really proud to take on the challenge of increasing our works program."
The council says it expects to recover about $1 million for the art gallery project under the state government's Newcastle Mines Grouting Fund.
The state and federal governments have committed $5 million each to the work, gallery foundation $13 million and the Margaret Olley Art Trust $500,000.
The $23.5 million in external funding leaves the council with a bill of $29.5 million so far, significantly more than the $16.5 million forecast last year.
The council estimated in July 2021 that the cost of the project was $35.6 million.
In August 2022, the council described the work as a "$40 million expansion project".
