Probuild Founder to Develop City Hotel


Probuild founder and ex-director Phil Mehrten has partnered with developer Frank Palazzo and hotelier Aziz Kheir to build a $56 million, 180-room Hachem-designed hotel on Spencer Street. 

The three are co-owners of the Sands & MacDougall factory in the city’s north-west pocket, which they plan to restore and convert into a mixed-use hotel and office development.

Entrepreneur Aziz Kheir, co-owner of Resimax Property Group, brings a wealth of development and hospitality experience to the project, including recently with the Adelphi Hotel, and as one of the major backers of the new Western Melbourne A-league side, developing the club a self-funded stadium in Wyndham.

Plans for the 23-storey hotel were approved by the City of Melbourne’s planning committee despite it exceeding the Flagstaff precinct’s 16-storey limit. 

Permission was granted at the same time as PDG’s 17-storey Elizabeth North development in Parkville was given the green light.

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The height was approved with the council citing an 85 metre-tall apartment tower in the vicinity.

Development of the hotel will include partial demolition of a heritage listed building at 102-108 Jeffcott Street, which neighbours the Sands & MacDougall factory. 

The heritage building is a two-storey red brick warehouse, built in 1914 and separated from the Spencer Street site by MacDougall lane.

A 23-floor hotel tower is proposed for the site, with a bridge running over MacDougall lane, connecting planned fourth floor of the Jeffcott Street building with the factory’s third floor. 

The development will contain 6,000 square metres of office space, and will be the first building in Melbourne’s CBD with a shared hotel and office lobby.

The Jeffcott Street site will have ground floor retail space and a destination rooftop bar with infinity pool. 

The Sands & MacDougall factory is an historic Melbourne site, with two adjoining buildings of four and six storeys, dating back to 1888. 

Plans for the site are still subject to government approval from Planning Minister Richard Wynne, and council approval is conditional to retention of heritage elements and the “sensitive” topic of the site neighbouring Melbourne Assessment Prison. 

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Photo credit: Sydney Morning Herald

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