The City Renewal Authority has put out a tender for a feasibility study into the costs and benefits of a new, underground bus interchange in the city centre, that would connect to the light rail system and replace the current, sprawling street-level facility.

The authority controls two future land release sites in the city that will be considered in the study – on the City Hill corners of London Circuit and Northbourne Avenue.

Authority chief executive Malcolm Snow said a new interchange would bring more people and businesses into a neglected part of the city, and free up public space on the current interchange site.

ACT Property Council president George Katheklakis, whose family-run KDN Group owns several buildings on both sides of the city centre, said the proposal was definitely worth considering.

“I think we sorely need to address the current situation with the interchange - it's certainly not working and it's certainly depriving a heritage asset of the territory from actually being something of a showcase that it can be,” he said.

“If the measure that's taken is one that puts it underground, I think you certainly have to have a look at the feasibility of it.”

While the proposal is at its earliest stages, many commenters on The Canberra Times' website were dismissive of the suggestion.

Some pointed out that such a costly project shouldn’t be considered until the light rail project was complete, while others warned an underground facility would become a haven for homeless people.

But Mr Katheklakis said that in a young and growing city like Canberra, it was important to keep an open mind.

“As soon as you close down ideas because you don't like the idea of it, or you assume that it's going to be unfeasible, I think that's closing your mind to what the opportunities are,” he said.

“I think we've basically got to open our minds, look at the opportunities. I think if we don't, we're nuts.”

He said a new interchange at the end of Northbourne Avenue would create a missing link between the east and west sides of the city.

“The worst thing you could do is paint it as 'just an interchange' - it's actually connecting people in safety between one side of the city and the other, it's providing amenity along the way, it's allowing the heritage buildings to actually breathe, it's allowing them to be the backdrop to something in the forecourt,” he said.

“Sometimes what may seem like a more expensive exercise in return provides a greater return to the city as a whole. So you do have to look at it in perspective.”

And far from being a ‘thought bubble’, or a new, unexplored concept on the part of the authority, he said the idea of a new, separate interchange had been mooted for decades.

As an architecture student at the University of Canberra in the 1990s, he said he wrote papers on the city interchange and how it affected the rest of the CBD.

“This is groundswell sort of stuff, and it's been swelling for a long time,” he said.

“I suppose no one in the past really thought that a previous government would actually have the commitment to do something like this, because it's long-term infrastructure.”

Peter Barclay, who manages King O’Malleys and City Walk, agreed that the the City Renewal Authority’s new underground concept was an extension of a long-time discussion among city business owners.

“There has been talk over a number of years about trying to make the bus interchange more attractive or functional as the city grows, and there's been various proposals in the past that have been discussed publicly, including moving the buses around London Circuit,” he said.

“But an ultimate solution really needs to be found as the city grows, and putting them underground is certainly something I think is worth considering.

“I think things have been discussed before about underground parking, and even many years ago putting part of Northbourne Avenue underground, so you'd have a pedestrian strip between the Sydney and Melbourne buildings.”

He said the two proposed sites - which are currently home to street-level carparks - would have to be developed in the future, and they might as well be something useful.

“With the two book-end sites, that presents a once-in-a-lifetime opportunity because once those sites are sold, then a development like this would become impossible in the middle of the CBD,” he said.

Harry Notaris, who manages Bailey’s Corner and the Saraton building, both in the current interchange, said the authority’s proposal would bring “endless” benefits to the city centre.

“If it was designed to a high standard, something like this could form a centrepiece of a modern public transport system that would be befitting the nation's capital,” he said.

“I think the current interchange has had its day. It functions reasonably well, but it's tired, and it creates a disconnect between one side of Civic to the other.

“What Malcolm Snow and [the] authority [have] proposed is world class, and the benefits over the current arrangements would be endless.”