There is now a push to return traditional Chinese businesses to the area as part of a $16 million plan to construct modern commercial spaces in a southward extension of the museum, to be known as “Bendigo’s China Town”.

The strategic plan has been in the hands of the state government since 2016, but funding is yet to be provided – and appears unlikely to be promised by either party during the current election campaign.

It involves retail spaces for businesses selling traditional Chinese wares, massage, herbalists and eateries, along with an extension of the Golden Dragon Museum to provide more space for exhibits.

Read more: A walking tour of Bendigo’s Chinese history: Tales of heritage buried beneath car parks

The extension is planned for the site of the bamboo forest, which is proposed to be relocated.

The museum will be rebranded as the National Chinese Museum of Australia and will allow for a greater telling of Chinese Goldfields history as well as hosting nationally significant exhibitions, using “immersive” modern methods of storytelling.

The second stage of the project – costed at $22 million – involves renovating the current museum.

Chair of the recently-registered National Chinese Museum of Australia, Doug Lougoon, said the upgrade was needed to secure the future of the museum, which continually faces funding uncertainty.

“We have got to be mindful of the fact that we don’t have any sort of recurrent funding. To borrow an expression, we run on the smell of an oily rag,” he said.

“There has been no capital investment since the museum’s inception in 1991.

“We will need to be able to display not only the story of Bendigo and the Goldfields, but also to develop our status as a place for people to deposit their important artefacts and to know that they will form part of our collection.

“The next step is to receive funding to get it to that shovel-ready stage, so we need complete architectural drawings.”

The arrival of new imperial dragon Dai Gum Loong, expected in March next year, will place further pressure on space at the museum where he will need to be displayed alongside original dragon Loong and his successor Sun Loong.

“We predict that after next Easter – with the arrival of Dai Gum Loong – the museum is going to be maxed out, so to speak,” Mr Lougoon said.

“There are a lot of items in archival storage that we would like to display, but we don’t have the room currently.

“We already have standing offers of unique collections.”

Visitation rates had been falling at the Golden Dragon Museum until about 12 months ago when a concerted effort was undertaken to connect with a wider audience in Melbourne.

Sun Loong enjoyed his first journey away from Bendigo to perform outside the Melbourne Museum, where he was exhibited for several weeks. Night dragon Yar Loong also met businessman Richard Branson at Melbourne Airport as part of an airline promotion.

Mr Lougoon said a modern museum would help to turn Bendigo from a “day trip” destination to an “overnight” destination, and could open the area up to the largely-untapped Chinese tourist market.

“Tastes and desires of tourists need to be met,” he said.

“If you have an interest in history, it’s OK to read and view items, but tourists and families are looking for things that they can interact with.

“If you’re not meeting expectations, people will vote with their feet.”

The future of the museum was in doubt in 2014 with concerns raised about increasing costs to maintain the site to modern standards. The state government provided $100,000 to the strategic plan.

A funding commitment of $10 million for the project was sought during the state election campaign, with the federal government asked to provide $5 million and the City of Greater Bendigo $1 million. It was one of the council’s main infrastructure priorities.

The council and Chinese association will now set their sights on the federal government and opposition for a funding commitment before the next federal election, predicted to be held in July next year.

Mayor Margaret O’Rourke said the plans for the Golden Dragon Museum and upgrade of the Bendigo Airport were the top two funding priorities for council.

She said she did not believe Bendigo had been left behind during the state election campaign, in which Labor has promised $152.4 million for new law courts and $60 million for a day rehabilitation centre, and the Coalition has promised several hundred thousand for school and recreation reserve projects.

Related: Major party policies for Bendigo and regional Victoria take shape fro 2018 State Election

“It varies across the state, marginal or not,” Cr O’Rourke said.

“I’m very interested in policies that are beneficial for regional Victoria.

“Bendigo has benefited a lot from previous elections.

“I am interested in the Coalition’s decentralisation fund and would like to see more detail about that, if it is similar to the Regional Jobs and Infrastructure Fund.”

The council is also eyeing potential CBD sites for a high-end hotel, including the McCrae Street public car park.

Director strategy and growth Bernie O’Sullivan said the car park site – close to the Golden Dragon Museum – was one of those under consideration.

“The McCrae Street car park is one of a number of sites the city believes could be suitable for the development of a high end hotel in the city centre,” he said.

“This area is close to many attractions in the heart of the city.

“A high end hotel in the city centre would provide much needed accommodation for visitors to Greater Bendigo.

“The city continues to liaise with potential developers to discuss development options in the city centre.”

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