But the organisation says the office relocation – the biggest ever undertaken by a Victorian government organisation – has been a success, with 161 employees buying homes in the Barwon area, and another 32 people looking to buy, now that the new Brougham Street office is open.
It was just over three years ago that then premier Steve Bracks announced the TAC would leave its home at 222 Exhibition Street for a 16,000-square-metre building, which was yet to be constructed, in central Geelong.
The move built upon the government’s $502 million Moving Forward statement, and its commitment to growing regional economies.
However, the decision sparked outrage within the $7 billion organisation, with about 200 employees – 30 per cent of staff – taking part in a 24-hour protest outside the TAC’s city office after the decision was announced.
TAC chief operating officer Andrew Boag said the company "has been conscious of the need to maintain corporate know-how, with some staff choosing not to relocate to Geelong".
"The TAC had a knowledge-transfer program in place to ensure a transition of knowledge as staff left the organisation," he said. Many staff are understood to have been relocated to other Government departments.
A Government feasibility study expected about 60 per cent of TAC staff to quit as a result of the move.
A taxpayer-funded incentives program for TAC staff – which totalled about $30,000 – was offered, in an attempt to retain staff.
Mr Boag said many staff had embraced the Geelong move as one of "excitement and opportunity".
"Since June 2007, the TAC has recruited more than 200 employees from the Geelong region," he said. "At least 75 per cent of those recruited externally in 2008 live in the region."
He said the office move had not presented any major operational changes, because so much of the TAC’s information was centrally recorded, and its liaison with clients was mainly over the phone.
Geelong is expected to reap $59 million a year in economic benefits due to the relocation.
TAC is believed to be paying about $295 per square metre per year for its Geelong offices. The TAC’s old 222 Exhibition Street office space is expected to rent for about $350 per square metre.
Despite this cost saving, critics say the Geelong relocation has come at a cost to the Melbourne economy, and effectively provides no financial benefit to the state.
Geelong-based Knight Frank manager Simon Jarman said that including the new TAC office building, the Geelong CBD had a total of about 85,000 square metres of office space – about the same as Melbourne’s Rialto towers.
He estimated Geelong’s CBD office vacancy rate to be just under 3 per cent, which is considered strong given most of the space is classified as B or C grade, indicating poor quality.
Melbourne-based developer and fund manager FKP owns the 60 Brougham Road office. FKP acquired the site in October 2006 after it paid $284 million for rival Wilbow Corporation, which had just won the tender to build the TAC’s Geelong building.
The TAC’s new office is built on the former Bow Truss Woolstore site, bound by Brougham, Clare, Corio and Gore streets, east of the Geelong train station. V-Line trains operate from Spencer Street to Geelong. The commute takes about an hour.
Attempts to sell the TAC’s Geelong office as an investment opportunity at the peak of the property boom in late 2007 were shelved in early 2008, when there were no buyers to pay the estimated $80million to $100million FKP was seeking.
Sources say the building is still on the market, and would be sold "for the right price".
An FKP spokesman told BusinessDay there was no pressing need to sell the TAC’s new headquarters. The office is leased for 20 years and returns about $4.7 million a year in rent.