Council believes the delivery of a market-ready development prospectus that attracts future investment opportunities would be able to activate the site.

Since the closure of the Aradale Lunatic Asylum in 1993, the 100-hectare site has been largely underutilised.

Constructed in 1864 and opened to patients in 1865 until its closure, a number of mixed and temporary uses have taken place on the site, including the Melbourne Polytechnic Ararat Training Centre 2002-2015 featuring a 28 hectare vineyard and wine making facilities.

Cr Gwenda Allgood reiterated to her fellow councillors that they couldn't "keep neglecting the site".

"If we are able to find a use for it then this may be our best chance," she said.

"We have got a gate house there that is just deteriorating every day, the buildings are aging and the winery is still there; we need to do something with it.

"We have had a couple of goes at it and haven't succeeded, but maybe the time is right."

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Ararat deputy mayor, Cr Bob Sanders was "certainly in support" of the commitment made by Council.

"It has certainly been a site that we have needed to do something with and I think it is probably the best opportunity we have ever had to do something with it," he said.

Located at the gateway to Ararat, the site features 63 precinct buildings with several of the original 1860s buildings and structures deemed to be of state significance.

However, due to the site being left largely vacant with no significant maintenance works undertaken for more than 30 years, the main historic asylum building and its iconic features are at risk of falling into a complete state of disrepair unless action is urgently taken to resolve the future of the site.

In 2018, Regional Development Victoria (RDV) proposed for Ararat Rural City Council to lead the development of a comprehensive highest and best use needs analysis for the site.

A number of Council reports and plans have also highlighted the need to solve the Aradale site, including the Ararat East Concept Plan 2012 and the Green Hill Lake Estate Plan 2017, Ararat in Transition Planning Study 2021, and the Ararat Rural City Council Plan 2021-2025.

In August 2021, Council submitted what was ultimately a successful funding application to the Victorian Government's Investment Fast-Track Fund, with the Minister for Regional Development, the Hon Mary-Anne Thomas MP, announcing on December 8 2021 that Ararat Rural City Council had been awarded $500,000 to deliver the project.

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Ararat Rural City Council has committed a further $125,000 to the project.

The site is State-owned Crown land reserved for Public Purposes (Education and Recreation).

Northern Melbourne Institute of TAFE (NMIT)/Melbourne Polytechnic are the Committee of Management of the site. Under this arrangement, Melbourne Polytechnic manage the issuing of permits, licenses, and any existing informal arrangements with the users on site, these uses include:

The site has also had occasional use by Corrections Victoria and Victoria Police for Dog Squad training exercises.

Melbourne Polytechnic has advised Council it has made the decision to terminate their lease on the site and finalise any responsibilities to decommission modifications or remediate site assets at the conclusion of the lease.

While Ararat Rural City Council has no direct responsibility for the site, its assets and predominantly unprogrammed land (over 75 hectares) has the potential to offer the Grampians region's largest premium mixed commercial development opportunity.

Council expects that by leveraging private investment to fully activate the site, it would both preserve Aradale's important heritage assets and create a residential and commercial gateway to Ararat.

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