With the state government limiting rate rises in councils, councils are being forced into partnerships with large corporations in order to provide basic infrastructure within municipalities.
One of the biggest pushes for such deals over the last 5 years has come from Woolworths who have turned from retailers into real estate developers. With population increases and greater use of cars, Councils need to upgrade their carparks. But this is a huge expense for which there is little money available.
On the other hand, with no open space left in suburban shopping centres to build US-Walmart-style mega-supermarkets, Woolworths has been offering councils a real estate deal to “solve” their financial problems.
In return for giving up community land, Woolworths offers to build a new supermarket and multi-storey carpark. Woolworths then negotiates a cheap rental on the land.
As a sweetener for the community, Woolworths will often offer to extend the local library. You may not want the supermarket/carpark but hey! who could refuse a “free” library extension? Of course it is not free – the whole deal is a financial package carefully constructed by Woolworths.
Another tactic is for Woolworths to shut down any retail operations on their land while negotiations take place. They can then claim the shopping centre is dying and the community absolutely needs a Woolworths to revitalise their centre! (eg Lane Cove and Thornleigh, refer: http://www.smh.com.au/articles/2004/04/16/1082055658140.html?from=storyrhs)
Councils do not have the expertise to evaluate these multi-million dollar real estate deals. They must, at considerable expense to the community, employ outsiders to analyse the deal. Often the analyst is recommended by Woolworths!!
Pro-development councillors pushed through such a deal in Woollahra just ahead of the council elections in March.
They tried to do the same in Lane Cove by calling an extraordinary meeting just 5 days before the elections This council had been split 5-4 on the issue. Despite the fact that most of the 5 “pro” councillors were not standing for re-election, they still tried to push it through. The only thing that saved the vote was a directive from the Dept of Local Government stating that it would not be appropriate (refer: http://www.smh.com.au/articles/2004/03/22/1079939582758.html?from=storyrhs).
During the election campaign Woolworths letter-boxed every household to put their case.
The Lane Cove deal is up for the vote again in early June. Of course, the “pro” lobby who have taken over Council are local business proprietors who could reasonably be expected to profit from the deal. In fact the Mayor, Ian Longbottom (remember the “Save the Rabbitohs” party?) is the owner of a local paper which has been blatantly pushing the deal and promoting the “pro” councillors in his local rag The Village Observer. These Councillors, despite having business in very close proximity to the development, are voting for the deal, totally unconcerned about any pecuniary interest.
At the end of the day, Lane Cove gets their upgraded carpark but it’s likely to be full from the very first day with the extra shoppers attracted to the huge new supermarket. Parking could be worse than ever! In return, Woolworths gets the supermarket and carpark they want in Lane Cove at an annual rental of just $200,000 (pegged). Note that the nearby (smaller) Coles pays over $1mill in annual rent.
This is a deal promoted by local business people seeking their own benefit at the expense of residents’ land and the livelihood of other small shopkeepers. The residents cannot afford to fight it like Woolworths (it would cost us thousands of $s to letter-box drop every house).
Similar deals have been done in Thornleigh (failed this time), Ryde, Nowra and in Queensland.
It is difficult for residents to run a sustained campaign against inappropriate development in their suburb when commercial interests control the Council and the developer has an unlimited fighting fund. Woolworths has been trying in Lane Cove for 10 years! We have just 3 weeks left to go.