The operator of Victoria's only metropolitan saleyard has revealed it pays $10,000 a week in land tax to keep the livestock selling facility open.
Victorian Livestock Exchange managing director Brian Paynter said the organisation's board of directors met last week and unanimously agreed to close the Exchange Way site from June 30, 2024.
"Our council rates doubled overnight and our land tax has increased to a level that just completely makes operating a saleyard in metropolitan Melbourne unrealistic and unviable," Mr Paynter told Stock & Land.
"Land tax was in excess of $550,000, so it costs us $10,000 each week just to open our doors."
Mr Paynter said the decision came as a surprise to many of the people in the room.
"There was an expectation that Pakenham's future was uncertain and people have been talking about it in the industry for a long time," he said.
"The time frame has taken people by surprise."
The facility opened on February 2, 1999 and processed almost 100,000 cattle last financial year.
Mr Paynter said the saleyard had a decorated history and was the first livestock selling facility in Australia to feature a soft floor and roof.
"Pakenham saleyards was the first privately-owned, multi-agent, fully-roofed and soft-floor saleyard in Australia.
"It was the trailblazer of modern saleyards ... we were the innovator in our day.
"We just can't make it work with the land tax and council rate bills ... we are the only saleyard left in metropolitan Melbourne and there is probably a good reason for that."
Pakenham agents were told during the meeting they would be "warmly welcomed" to the Leongatha saleyards, also owned by the Victorian Livestock Exchange.
The South Gippsland facility is nearing a $4.5 million overhaul, including the construction of 52 selling pens - to add up to 223 pens - as part of the upgrade.
"We will do our best to transition all of the throughput to our Leongatha saleyards," Mr Paynter said.
He said the Pakenham and Leongatha agents would meet in conjunction with the VLE to determine the frequency of sales at the South Gippsland site beyond June 2024.
"We see it as a great opportunity to invest money in Leongatha and make it the best facility in Victoria," Mr Paynter said.
He said the VLE would meet with real estate agents in the coming months to sell the Pakenham site.