Commissioner loses $700m Canning project?

Partners in Crime (Matthias and Armand). Name of image recreated in full per licence conditions. Originator: uncoolbob. Flickr CC BY-NC 2.0

Canning is spending a fortune leasing a shop at Carousel in a bid to develop the Canning City Centre. 

Yet the City recently lost a $700m partnership with the innovative* Dept of Housing: the Bentley Regeneration project.

The question has to be asked: 

Does the City have the skills to manage developers, beyond creating structure plans, or is money being spent testing ideas more because of cash availability than the ability to leverage realistic outcomes?

We offer up what we understand may have happened to Canning’s role in the Bentley Regeneration project.

Canning’s council signed a Heads of Agreement with Department of Housing (DoH), not long before suspension, to develop around 25 hectares of land in Bentley.

The largest infill development this close to the CBD, it will feature nearly 2000 new homes with an emphasis on affordability, new retail, community facilities and employment opportunities in an area overdue for renewal.

A “go” project, DoH had already paid to move the Canning Lawn Tennis Club to new premises, to free up the precinct.

CanningAccountability has long been involved as a community representative – DoH achieved a lot of community support for a higher density development.

However, DoH chose to terminate its Agreement with Canning, and with it the right to have first bid on any lands owned now by the City and those Canning hoped to purchase at 5% of value from the state and on-sell for a much higher price, with the monies generated to constitute its share of development of the site.

Canning’s expected contribution to the project was $10m of the $700 million development cost – a bargain for the community.

Our extensive contacts indicated various issues led to the end of the partnership, not the least of which was what appeared to be the unwillingness of what we can only assume was Canning’s temporary and/or new leadership to treat DoH as the valuable project partner it is, rather than just a developer.

To this day the City of Canning has never openly advised its community, particularly that of Bentley and St James, that it has lost the Heads of Agreement with DoH.

Rather, the issue was approached obliquely, ie, listed as “stalled” due to “local govt reform” in the City’s submission to the Local Govt Advisory Board, in its bid to be seen as a viable, standalone entity that should remain intact.

On contacting the Regeneration team at the Department of Housing to request clarification on the project’s status, we discovered that news the project had been “stalled” was news to them.

In discussions with other community groups, we believe Commissioner Reynolds felt it was not reasonable to put money in to projects that may go to other councils, yet this didn’t stop Canning undertaking a large loan to install a geothermal bore in to the Riverton Leisureplex, when it appeared it was to be taken over by the City of Melville.

There appears no documentation Melville agreed to this action, or would take over the loan payments, and in point of fact, if Canning is abolished, then all parts of it will go other councils anyway.  Is that a reason not to continue with a project as important as the Bentley Regen, with a locked in, load bearing partner?

To make matters more complex, we understand the City has valued the land it does hold at the Regen site at a price above its actual status as largely unserviced land, ie, it has yet to have roads built and power and water connected to serve it at the higher intensity use it is being marketed as (a multi-story development that could house both residential and commercial components).  Currently the land is under the ageing Canning Aquatic Centre.

It is anticipated the City will subsequently value any reserve lands it is able to purchase at 5% from the state the same way – despite needing DoH’s development of civil infrastructure at the site before developers move in.

It doesn’t seem a realistic approach, and presumably if the land doesn’t sell then the monies are not made available for Canning to contribute its share to what its ratepayers have a right to expect for that area.

DoH is now negotiating with the Metropolitan Redevelopment Authority to complete the project, whereas Canning’s Commissioner has promised residents it will upgrade a few parks in the area.

In Ordinary Council Meeting Agenda of 15 July 2014, CEO’s Top 12 Priorities 2013/2014 Outcomes Report, the project is now listed as “deferred subject to… confirming the role of the Metropolitan Redevelopment Authority”.

In Ordinary Council Meeting Minutes of 17 June 2014, the Commissioner states the Premier’s view of what a viable council should be includes its ability to attract overseas investment.  Given the Bentley Regeneration project’s proximity to Curtin University, overseas investment would have been a given.

The community has the right to question why this seemingly “go” project got to the point where the Department of Housing did not wish to continue its Agreement with the City of Canning, particularly as the temporary governance is now fast tracking development of the Canning City Centre, at a cost of millions in planning instrumentation and “fluffy” items, like “pop up” initiatives that can‘t be funded by council for years until there is a critical enough mass of development for it to be occurring organically.

Sales of land within the City Centre, or approval of any development, could well have been in the works for some time, and may still not appear for years.  This is the nature of development and it is occurring all over the metropolitan area.

So a new question should be asked, namely, might developers hang back at this time, unsure of what the future holds with Canning – will it remain under administration?  Will a council be returned?  Will another council take it over?

Not all of these answers relate to local government reform.  The Commissioner himself seems disinterested in lobbying for a council to be restored to Canning.

What is the future of this area, if the City of Canning itself may not have a future beyond a shop, with public servants in it, with a budget that may only last until a new council decides otherwise?

Over to you, Commissioner – what has the City of Gosnells said of the Canning City Centre plan in your regular Local Implementation Committee meetings?  Have they agreed to keep up the shop lease, the pop up budget?  Will they prioritise this project?

You’re the only rep we’ve got now, and the only one we can ask these questions of.

*Dept of Housing just announced as a finalist in the Public Sector Awards for development of Shared Equity EOI opportunities (innovative ways to deliver affordable housing)