Maximising market value the main game - 29.11.2004

Nothing should get in the way of maximising that value, not even the planning regulations of local authorities, the papers indicate.

The documents reveal deep Government dissatisfaction with the City of Sydney, the designated local government controller of the Redfern-Waterloo lands. The papers cite the council's objection to greater density and heights for a proposed development at North Eveleigh. They say this pattern may be repeated for other proposed developments on private and public lands unless the Redfern-Waterloo Authority is set up.

Under the plan, the authority would declare favoured developments "state significant", thereby bypassing normal planning rules and even heritage laws.
"In order to maximise social and economic returns, the Government must be able to offer planning certainty to the market within a strategic planning framework," the documents state. "It is considered likely that council would not support other major developments in the Redfern, Eveleigh, Darlington and Waterloo area."
They say the Government has a unique opportunity to develop a cohesive approach to development in the area by calling in several individually significant sites.

One of those sites would be the Rachel Forster Hospital. "The Department of Health has recently offered the Rachel Forster Hospital site to the market for sale. The market's low value response to the site is due in part to apprehension on achieving reasonable development yields" under the council's present position on development, the papers say.

The papers also reveal that if the Block is redeveloped, some government-owned lands will be worth up to 30 per cent more. "If the Block is not redeveloped, the commercial benefits flowing from the proposed infrastructure projects identified in the infrastructure plan will be undermined," the documents say. "The Department of Commerce's recent report on the redevelopment of Redfern station found: 'It is important that the redevelopment of the station occurs in parallel with the redevelopment of the general area, include [sic] the Block. This assumption is critical: the commercial returns used in the model could not be achieved if the station redevelopment was attempted in isolation. Commercial development would probably be impractical under those conditions and any residential development would face a substantial reduction in value, probably in the order of 25 per cent to 30 per cent."'

By applying authority planning rules, the Government would make almost $18 million profit on the upgrade of Redfern station, the documents say. They say Redfern station "would attract considerable interest if it were put to tender. In fact, a developer would be likely to pay more than will be required to redevelop the station if it was assured of planning approval on the scale contemplated". Redfern police station would be sold for $2.3 million and a new police station incorporated into the redevelopment of Redfern train station.


By Gerard Ryle and Debra Jopson

Originally published in the Sydney Morning Herald
November 29, 2004