The proposal to demolish seven buildings opposite Sydney Town Hall to create a $150 million public square has raised concerns over access to essential services. The plan would see the removal of a popular Woolworths store, potentially limiting convenient shopping options for CBD residents at a time when the city centre is already short on essential services.
The proposal would demolish buildings on the block between George and Pitt Streets, including the Woolworths Town Hall supermarket, to create what has been described as a large civic gathering space intended to serve as the heart of the harbour city. The Woolworths store is understood to be the busiest supermarket in Australia by foot traffic and serves nearly 30,000 residents who live and work in the central business district, along with daily commuters using Town Hall Station directly below.
More than $36 million has gone into maintaining and upgrading the buildings now slated for demolition, raising concerns about the impact on local services. The draft long-term financial plan allocates $150 million for construction, with work expected to start before October 2028. This is a scaled-back version of earlier plans, which estimated costs of over $200 million and a start date no earlier than 2035.
CBD Recovery and Competing Priorities
Business Sydney executive director Paul Nicolaou argues that an open-space plaza across from Sydney Town Hall may have been a worthwhile project in the 1980s, but in 2026 and beyond it makes little sense. The industry body contends that demolishing the Woolworths building would tear at the commercial heart of the city at precisely the time it is needed most, noting that the plaza concept predates the realities facing the CBD today, including recovery from COVID, adaptation to work-from-home arrangements and the urgent task of revitalising the city centre.
The organisation says it is not the time to remove retail facilities, including supermarkets, from the city when efforts are underway to encourage more people to live in the CBD and to urge developers to convert older commercial buildings into much-needed residential housing. The loss of a major supermarket would create particular hardship for residents in Surry Hills and surrounding suburbs who rely on the Town Hall Woolworths as their closest full-service supermarket, accessible via a seven-minute light rail trip or 15 to 20 minute walk from Surry Hills along Oxford Street or Crown Street.
Decades of Planning and Shifting Timelines
Plans for a square outside Town Hall have been underway for more than 40 years, first proposed in the 1980s by a former city authority head. Over three decades, properties opposite Town Hall have been gradually acquired to make way for a future civic gathering space. Purchases include the Woolworths building, Hotel Coronation, Lowes on the corner of Pitt and Park Streets, 207 Pitt Street bought in 2004 for $19.9 million, and Pittsway Arcade acquired in 2016 for $43 million.
The Woolworths lease, originally due to expire in 2015, has been extended multiple times, most recently to December 2030. A 2020 extension helped ease budget pressures during the COVID pandemic. Terminating the lease early would have a major effect on the funds used to maintain services and infrastructure in the CBD. Woolworths has confirmed its Town Hall store remains very popular, and discussions with the authority continue about future plans and timelines. Big W also operates on the second floor following recent renovations.
Alternative Visions for CBD Public Space
A city authority representative has suggested funding would be better spent on Martin Place, which could be transformed more efficiently with separate zones for remembrance, interactive activities, and sports, including a large screen for public gatherings. The aim would be to create inclusive activations that bring the city together.
Public opinion is mixed. Some residents support improvements to Town Hall Station and hope Woolworths can remain in some form. Others are concerned the square could become an unshaded concrete space, while optimists imagine a European-style plaza with cafes, restaurants and event space.
The Town Hall Square is a key element of the Sustainable Sydney 2030 project, connecting George Street light rail to a new CBD pedestrian boulevard linking Circular Quay, Central Station and Town Hall. Early plans included a 5300-square-metre street-level plaza with an underground retail and supermarket precinct, though the revised project removes retail and hospitality activations. Authorities expect recommendations on project scope and a head designer this month, but the proposal has not yet sought nationwide funding.
Published 22-February-2026.
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