The former Spotlight and Anaconda building along National Park Street will undergo a $100 million redevelopment through a venture between St Hilliers and The Spotlight Group. The project includes two towers reaching 90 metres each with 267 dwellings, 1400 commercial square metres and 322 car parks. The Plus Architecture design was chosen for its integration of the heritage Drill Hall and inclusion of a public domain.

"The Drill Hall is an iconic building and it's getting blocked up," Plus Architecture director Sumedh Kataria said. "One of the first things we've done is moved everything away from the Drill Hall. We've also created a visual link so if you're coming up from Hunter or National Park Street, you can see through to the building."

Lord mayor Nuatali Nelmes said the area's building height limit had been 90 metres for decades, but had "just never been realised until recent years".

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"The vision was always to protect the heritage East End, keep the building heights low and densities lower, and shift the CBD west," she said. "You can't do that with government funding alone, you have to be able to attract outside private investment into the city.

"The most positive thing about this is it is an iconic corner and it's a little bit dilapidated, so having a design excellence competition for this site is a really wonderful outcome."

The Spotlight Group executive deputy chairman Zac Fried said he was looking forward to the next stage of the site.

"My late father Ruben bought the site in July 1988," he said. "It has been one of our best stores for many, many years - first Spotlight over the entire building and then Anaconda as well before we moved down the road to Lake Macquarie. We're very excited, very passionate about the site and making sure that we get the highest result for Newcastle."

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