The failure by the ACT to negotiate the resumption of a lease over an equestrian centre at West Belconnen has caused the rescheduling of housing development at a cost of at least $1 million, according to a valuer.
The Minister for Planning, Bill Wood, acknowledges the rescheduling, but says there was no additional cost.
The owner of Fassifern Equestrian Centre, Mike O’Brien, said yesterday that he had been negotiating for two years over the nine-hectare site.
It is the only commercial lease standing in the way of the staged West Belconnen housing which includes Dunlop. Other leases are rural and have withdrawal clauses enabling the Government to resume them.
During the negotiations the ACT did not have a law for compulsory land resumption. That law, the Land Acquisition Act was only passed this month and procedures have yet to be worked out.
As a result the ACT Government has to work around Mr O’Brien’s land, unable to put critical infrastructure across the access-road part of his land, contrary to earlier plans.
Mr O’Brien and his valuer, Noel McCann, say that the rescheduling would cost more than $1 million. Instead of developing from Ginninderra Drive back towards Fraser, development has to start near Fraser, along the extension of Kerrigan Street, and work down.
The costs involve infrastructure in place at the Ginninderra end lying idle, a marketing loss from the loss of the Ginninderra Drive access in the early stages and other inconveniences.
Mr McCann says that a commercial developer would have been able to settle far more quickly. He denied that Mr O’Brien was holding the Government to ransom.
Mr Wood said he had been advised there were no significant costs in the rescheduling. He had to protect public money and could not buy out a commercial lease-holder other than in accordance with government valuation.
Mr O’Brien said the valuation took no account of lost amenity, inconvenience and loss of business goodwill.
Mr O’Brien’s correspondence shows the various valuations and offers made to have him and the government between $300,000 and $145,000 apart.
The Government has now offered to pay $132,000 for the access road and 1.8 hectares of the main block and offered a new lease over rural land beyond. Mr O’Brien says that offer has not been clarified.
Mr Wood says if the matter is not clarified the Government will be able to resume it under the new Lands Acquisition Act. Mr O’Brien says that amounts to retrospective legislation.
He said he had lost business because he could not offer certainty to people stabling horses. The development nearby was noisy and dusty affecting his home on the site and the business. He had lost his address off the old Charnwood Road through its degazettal and customers had a more difficult way in. This had only benefited his competitor equestrian centres elsewhere in Canberra.
Mr McCann said he could not understand why the ACT Government refused to negotiate sensibly when Mr O’Brien had offered compromises.
At the beginning the Government gave notice that it intended to resume the lease, when it had no legal power to do so. The Government has acknowledged this as a mistake. Earlier in the negotiations, the ACT also withdrew an initial offer and substituted another which was about $100,000 lower.
Mr McCann said it was folly for the Government to have put in place a territory plan for land use without an acquisition law.
Mr Wood said, “”My advice is that there is no particular difference in which order the stages of West Belconnen is developed. There is no basis for their figure.
He hoped to get a fair result by agreement rather than use the new Act, but Mr O’Brien’s price was too high to be acceptable and he had to protect the public purse.