The South Australian government has taken control of the redevelopment of the old Royal Adelaide Hospital site, pulling out of a $1 billion plan to have it carved up by private developers.
The new plan will preference short-term and student accommodation over the previous deal which included 1200 premium apartments.
The government will now release the site in stages, offering 70 per cent to the public and featuring an expanded Botanical Gardens.
It will also include a contemporary art gallery and premium hotel.
The original plan by developers Commercial and General and John Holland didn't offer the best plan to revitalise Adelaide's East End, Premier Jay Weatherill said.
"We don't want to see this vital piece of our city fenced off for years to come and left to the market to dictate what happens and when," he said.
"We are just weeks away from seeing the first stages of that vision being realised with the demolition of the old, defunct and contaminated buildings to make way for open space."
The government's change of plans to a large-scale development in Adelaide's centre could lead to investors losing confidence in the state's market, Property Council SA executive director Daniel Gannon said.
"South Australia's biggest challenge moving forward is around demand and growing our state's population, but that doesn't mean we should apply a handbrake on residential supply," he said.
"It means we need to work harder to attract more people and more investment into our state."
In November, work will start on demolishing parts of the old hospital with more than two hectares of land to be returned to the adjacent Botanic Gardens.
Tearing down its eastern buildings would be the largest project of its kind in SA's history, costing $150 million and creating 95 jobs.
"Its transformation will open up this closed site making it accessible space for all South Australians to use," Urban Development Minister Stephen Mullighan said.
WHAT IS NEXT FOR THE OLD ROYAL ADELAIDE SITE:
- Obtaining a landscape architect to design the integration of the two hectares into the Botanic Gardens
- Opening a registration of interest for a five-star hotel
- Opening an expression of interest for new uses for the retained heritage buildings
- Launching an international search for a team to design the proposed Adelaide Contemporary Gallery project.
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