The state government has budgeted $60 million from the sale of development rights for a commercial and residential tower near the Powerhouse Museum it wants to build in Parramatta.

The inclusion of the planned $60 million sale proceeds is revealed in a costing prepared by the Parliamentary Budget Office for the Labor Opposition, which requested advice on how much it would cost to maintain heritage properties in the area.

The demolition of those properties – an 1886 Italianate villa known as Willow Grove, and a row of seven terraces known as St George’s Terrace – was assumed as part of business cases prepared for the government’s planned Parramatta Powerhouse.

The government says it intends to keep Willow Grove, but under its business case, the 1870s Italianate villa would go.

But the government has since said it would try to keep those buildings.