The Melbourne Star Observation Wheel may soon “spin” again in Docklands

With September marking three years since the Melbourne Star Observation Wheel was permanently closed, hopes are alive that an “interested party” may soon have it spinning once again.

The 120-metre-tall wheel first opened in 2008 at a cost of $100 million but suffered a series of mechanical issues thereafter, closing just 40 days later for the next five years while they were rectified.

Following ongoing problems and dwindling visitor numbers due to the pandemic, the attraction shut down altogether in September 2021 when its operating company MB Star Properties Pty Ltd went into liquidation.

With “The Wheel” never turning a profit from its current location at The District Docklands, liquidator Grant Thornton has struggled in its attempts to secure a purchaser despite interest from several international and domestic parties.

While many have suggested moving the Wheel to another location closer to the Yarra River, Docklands News understands the costs to dismantle and relocate the structure have proven unviable.

In the absence of a buyer willing to take on the risk of operating the Wheel from its current location or shifting it elsewhere, speculation has since risen that it is instead destined for scrap metal.

Former Lord Mayor Sally Capp told Docklands News in May that it was her understanding that “all sorts of efforts were made to find ways for it to continue, and it just wasn’t commercially feasible”.

“More recently, the focus has been on whether it can in any way be reactivated, and I think that has sort of come to the end of the line now,” Ms Capp said.

“The owners are currently working through that. I believe they’ve had the various parts up for sale, so if you’d like one of those capsules at your place, you can buy one for a fee.”

However, Docklands News understands that with the scrap metal alone valued at around $3 million by the liquidator, no parties have thus far been willing to take on the risk of paying the significant costs to dismantle it.

The cranes necessary for such a job, for example, are believed to cost more than $5000 a day to hire.

With conservative estimates of around $9 million to move the structure proving unviable to any party, Docklands News understands that the prospect of the Wheel operating again from its home in Docklands is back on the table.

Andrew Hewitt, partner and head of financial advisory at Grant Thornton, most recently told Docklands News that it was still “currently working with a party” and “they are continuing the due diligence process to assess the operational issues in respect of the Wheel.”

“Upon completion of this they will determine whether they wish to progress to a purchase of the assets,” Mr Hewitt said.

Docklands News understands that a “manual test spin” of the Wheel was imminent at the time of publishing, which if successful, would progress to a series of power rotation tests before an agreement with the party was finalised.

With the liquidator understood to have significantly brought down its valued asking price for the asset to around $17 million, it is estimated that the purchaser is likely going to need to fork out around $8 million.

A Community3008 inc. spokesperson said that while the prospect of the Wheel turning again was exciting, they raised concerns with it continuing to sit idle and called for more to be done in the interim while the process with the liquidator was finalised.

The spokesperson said many residents wanted to at least see the Wheel’s lights turned on where possible, with its ongoing closure providing Docklands’ critics with another reason to re-prosecute the precinct’s planning failures.

It’s a negative sentiment that doesn’t bode well with “parochial” Docklanders, according to the spokesperson, who said that the Wheel’s return would make a huge difference for The District and provide a vital drawcard for tourists.

Lord Mayor Nick Reece said the Melbourne Star had been out of operation and sitting stagnant for “far too long” and that if re-elected at October’s local government elections, he would push for a solution.

“It’s time for action,” Cr Reece said. “The City of Melbourne is dedicated to activating the Docklands precinct and it’s frustrating to see such a prominent feature gathering dust.” •