About 4000 Department of Immigration and Border Protection staff could be shifted out of Belconnen in a move that would be economically "disastrous" for the town centre.
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The large department wants 80,000 square metres of building space in one precinct within a 10-kilometre radius of Capital Hill so it can consolidate its 5500 staff throughout the territory.
Tender documents show the department will use Canberra's weak commercial real estate market, which includes high amounts of empty office space, to push building owners for a free fit-out and fewer rent increases.
All new building space for the move would be needed by the end of 2017.
At present in Belconnen, 4000 Immigration staff are in half a dozen buildings accounting for more than 60,000 square metres.
About another 1500 Customs and Border Protection employees work in five buildings totalling 35,000 square metres in Civic.
The department did not want more than 400 metres between the entries of any two buildings in the new precinct it inhabited.
Fraser MP Andrew Leigh said spending millions of dollars to move public servants around the city was "completely out of order".
"It's another example of the government getting its priorities wrong when it comes to the public service," Dr Leigh said.
"The Abbott government is operating with a complete disregard for Canberra's economy and the people who live and work in this city.
"If it takes thousands of workers out of the Belconnen town centre, that will hurt all of the shops, cafes and services in the area."
Belconnen had already been hurt by job cuts at the Australian Bureau of Statistics and more ABS jobs were to be moved to Geelong.
Although a location had not yet been chosen, Dr Leigh said there was little doubt some Belconnen businesses would go to the wall as a result of the decision.
"One of Canberra's great strengths as a city is that people can work in town centres close to where they live," he said.
ACT Liberal senator Zed Seselja said he had lobbied department secretary Mike Pezzullo and former minister Scott Morrison for the department to stay in Belconnen.
In recent days, he had sent a message to new Immigration Minister Peter Dutton to organise a meeting so he could repeat the sentiment.
"I think it would be a big blow to the Belconnen town centre [if the department moved out]," Senator Seselja said.
"A lot of businesses there have come to rely on the department's significant presence."
The Abbott government decided to keep the Department of Social Services in the Tuggeranong in 2014, after consideration of a new site. It came after lobbying from the senator about the detrimental impacts of moving it out of the town centre.
It appears as though Tuggeranong would not have a chance of hosting the Immigration Department because it falls just outside the 10-kilometre radial line of Capital Hill.
If the department ended up consolidating all ACT staff at Belconnen, it would mean a significant increase in jobs in the town centre.
But real estate observers were unsure whether enough vacant space at a single location existed at Belconnen, although the option of constructing a new building has been left open.
It was clear from tender documents the department was open to offers at Civic, Woden and at Brindabella Business Park near Canberra Airport, where there was considerable vacant space.
ACT Combined Community Councils secretary Robyn Coghlan said shifting the department outside of Belconnen would be a disaster.
She said moving it to Civic would undermine the city's original design, which aimed to promote the flourishing of satellite townships within the territory.
The Tuggeranong and Woden town centres in particular were already struggling, with the latter losing huge numbers of public servants in recent years.
Ms Coghlan said the Westfield shopping centre in Belconnen was hurting retail outlets outside the centre.
The department's negotiations with preferred tenderers was due to happen by March.
The department's current leased area in Chan Street, Belconnen, which may be considered for consolidation, comprises: the Blue Building (5758sqm), the Magenta Building (3908sqm), the Aqua Building Chan Street (6567sqm), the Purple Building (4516sqm), the Orange Building (17,314sqm), and 6 Chan Street (28,320sqm).
The first four leases expire in February 2016. The latter two expire in September 2018 and November 2019 respectively.
Customs and Border Protection currently leases 20 Allara Street (2499sqm), 5 Constitution Avenue (12,838sqm),
48-56 Allara Street (9325sqm), 2 Constitution Avenue (9913sqm) and 50 Collie Street (830sqm).
Most of these leases expire before 2017. Temporary accommodation is expected to be used until the new precinct is ready.
