Chapel Street's Jam Factory set for $450m makeover

A redevelopment of Chapel Street's infamous Jam Factory worth almost half a billion dollars has been given the greenlight.

In recent years, the once-thriving Melbourne shopping centre and fashion strip have become what some locals have described as a ghost town.

“You might as well go to Chadstone,” one shopper told 9NEWS today.

Retailer Tristan Barlow added, “it’s not a good look to have heaps of empty spaces.”

Today it was announced a $450 million corporate re-development is on the way for the Jam Factory.

“What we don’t have in the precinct at the moment is a large commercial office space,” Stonnington Mayor Steve Stefanopoulos told 9NEWS.

The makeover has been three years in the making, following the purchase of the site for $165 million.

The grand plan for the space incorporates an open-air plaza, garden terrace and 2300-seat cinema.

Parts of the building will reach 15-storeys high, while others will go four-storeys below to create 1350 car spaces.

“Because of the height we've asked them to contribute $2.5 million into the public realm,” Mr Stefanopoulos said.

While the Jam Factory’s 160-year-old bluestone façade and chimney will remain, the other parts will be demolished.

Watch the full news bulletin on 9Now