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Fixing the Block: $27m development planned - 29.11.2004

A powerful new State Government authority will take control of Aboriginal lands on the "Block" at Redfern for at least 20 years as part of a huge redevelopment plan aimed at fixing social ills and lifting the area's property prices.

The Redfern-Waterloo Authority will commit $27 million to redeveloping the troubled precinct centred on Eveleigh Street, but only if the indigenous owners hand the authority exclusive possession of the lands through a 10-year lease.
The authority would manage sales and leasing of properties, and could compulsorily acquire land if the crisis-ridden Aboriginal Housing Company, which owns the property, becomes insolvent, according to secret cabinet documents.
Aborigines who fail to pay rent, sublet or use drugs may be kicked out of their homes under the new arrangement, the papers reveal.

A cabinet committee has backed recommendations that will force change on the housing company in return for building new accommodation for its tenants, the documents reveal.
But the symbolism of taking control of land first won by Aborigines in the 1970s could spark protests over the Block, the scene of a riot in February, government advisors have warned.
The housing company is more than $1 million in debt, and it is likely the new authority will help it get a $1 million-$2 million loan.
This would give the Government leverage when dealing with the company, the papers say. The company is asset-rich but cash-poor. Its 62 properties on the Block are valued in the papers at up to $22 million and it owns a further 25 lots in the immediate area valued at $5.6 million.

At an August meeting with Government representatives, the company's chief executive, Michael Mundine, agreed to many important points in the overhaul, including a new structure for the organisation.
"Other members of the board and the broader AHC membership may view them less favourably. In particular, it is anticipated that there will be claims of a government takeover, as well as a questioning of Aboriginal self-determination," the papers say. One "sticking point" will be that there will be no company member on the board of the new authority.

Another could be that government appointees on the new Pemulwuy Redevelopment Committee set up to revamp the Block, including the chairman, "could successfully veto an AHC position and recommendation regarding AHC lands," the documents say.
The Block needs drastic action to fix its social woes, but the redevelopment is crucial to the success of commercial projects planned on government lands at Redfern. If this does not happen, other developments in the area will be worth less, according to the documents.
Failure to fix the Block would depress the value of commercial and residential development by 25-30 per cent, according to the NSW Department of Commerce.

The housing company "has experienced significant organisational and management problems", and an audit had identified a liquidity crisis, landing the organisation more than half a million dollars in the red in June 2003, the documents say.
It will need to sell some of its property to become viable again, they say. Apart from its holdings around the Block, it owns 44 properties in other parts of the state, valued at $17.3 million. Many of them are derelict or have been demolished.
The company could be wound up and does not have the financial and property management skills to manage these assets, says an another audit, conducted in the middle of this year.

The Aboriginal Housing Company has failed to collect rent consistently, had to be bailed out at a $900,000 cost to the Aboriginal Housing Office - a statutory authority which instigated urgent health and safety repairs for 43 properties - and also owes the Tax Office $238,000, the documents reveal.

By Debra Jopson and Gerard Ryle

Originally published in the Sydney Morning Herald
November 29, 2004