Chinese Developers control Canning?
Canning Accountability, 21 May 2017
When WA Business News announced* in 2015 that a Chinese developer had won a big infill job in Canning, no-one imagined the developer, Sunlong Corporation, would go on to win BIG TIME. In a Council area almost entirely built out but with a huge infill quota to meet, a crucial 25h site became available courtesy of the Housing Authority. Known as the Bentley Regeneration project, at 8kms from the CBD it is remarkably valuable and should have been not only the making of Canning but the key project to prove “density can work” as Perth heads towards a population of 3.5m at 2050.
Instead, the removal of an experienced Council, courtesy of former Treasurer Mike Nahan’s need to hold on to the seat of Riverton, leading to simplified investigations and subjecting Canning to a series of Commissioners as staff ran the City to “suit themselves“, seems to have led to poor outcomes on almost all of Canning’s current land deals.
The new Council wants to be seen as progressive and is about to hold a breakfast to woo potential investors in its Canning City Centre plan but at what cost? Whilst the community is kept in the dark it’s no secret to the development industry Canning isn’t that savvy when it comes to wheeling and dealing real estate.
Now, it seems, one small but versatile developer has outsmarted the City of Canning on a landmark project.
If Something Seems Too Good To Be True…
Just before the Barnett Govt suspended Canning’s council in 2012 a Memorandum of Understanding was struck between the City and the Housing Authority over development of the Bentley Regen. Shortly thereafter then Commissioner Linton Reynolds and CEO Lyn Russell took their positions on its steering committee. The negotiations fared poorly, and Canning withdrew the Authority’s first right of refusal on land it owned within the site, spurring former and now returned Director General of the Authority, Grahame Searle, to walk away altogether.
The City decided to go it alone and put its only landholding, the Bentley Aquatic Centre, out to tender as a “Sale & Development” package.
The Regen itself was meant to take the form of a self-sustaining village – town square, retail and commercial outlets, homes for 3000, high quality public realm, buses galore and new civic buildings.
The successful bidder for the pool site, Sunshine Developments (a subsidiary of Sunlong) was deemed by Canning, at least, to be the entity that would kick-start it all with a “temporary village square”, supermarket, multi-storey student facility (complete with veggie patch) and hundreds of additional apartments in several nine storey towers.
Although it would be developed in stages, a standalone stage 1 would stick out like a sore thumb given its lonely location within the larger Regen area.
Sunshine got the land for a reputed $7m and was supposed to provide $10m worth of civic amenity, from temporary town square to a new, state of the art library and business incubator. The video submitted as part of its Request for Proposal – and it is stunning – is HERE
With an end value of $190m it seemed everyone was going to come out of this with something substantial.
Then things began to go pear shape. The deal was closed in Oct 2015, with payment to be made April 2016. It’s not clear this has occurred, with Sunshine believed to want to defer payments to coincide with each development stage – stage 1 was to commence July 2016 (three storey, 46 unit block) but is now slated for end of 2017. Anything else is likely to be dependent on how sales from just one section of the proposal pan out.
Shortly after the highly prescriptive deal was signed, Sunshine took it to a development assessment panel for changes.
If only (and if) stage 1 goes ahead, when, if at all, will our $10m in civic benefits appear? Sunshine’s parent company quietly removed this critical detail from the project’s specs on its website in the last month:
[Project] Construction Cost: $150 M
On top of everything else, Curtin University is now in the process of building at least 1500 student accommodations on campus, further reducing the likelihood of the project’s success. Are any of the key stakeholders communicating with each other before these deals are made?
Those in the know tell me the former Council held Sunlong up to higher account in its bid to concentrate development in Canning, returning it to the drawing board time and again to deal with what it felt were “cheap aesthetics”, poor parking and unsightly bin arrangements.
The end result of Sunlong’s first build in the Canning CBD still leaves something to be desired –
Rumour has it Canning would like to rip up its contract with Sunshine, but the company invoked a clause within it and has as firm a hold on the land now as ever….. which in turn may lead to a bigger problem: what if the first development on the Regen fails?
This project is of the size and scale needed if we are to house the majority of Perth’s growth within existing city boundaries, in a City where only 9% of the population** would agree to live in apartments. It has to be special… if Sunshine’s development is not tip top, its believed the whole concept could be affected.
The former director across Canning’s role in the Regen, Mike Mouritz, left abruptly earlier this year, following the departure of two other directors under new CEO Arthur Kyron – who is believed to be running everything out of his office now.
As for what shaped this outcome, and other reputed failures to negotiate the best deals on behalf of the community, the fact remains that while the current CEO and Council refuse to follow the most critical recommendation of the $1.6m independent inquiry in to Canning (strategic briefings should be comprehensively minuted, and video or audiotaped to ensure all councillors, and applicable staff have access to the same information – so too any potential future investigators), this local govt area, that was not going to survive local govt reform and has been put under administration twice now, will continue to undermine itself.
Someone needs to be very clear – and now – about what’s going on with Canning’s land deals, without resorting to flimsy media offerings or hiding behind closed doors, because it’s looking like the Regen has again stalled, valuable land remains banked and developers are easily kicking Canning’s ass.
*”Chinese Developer wins big infill job”, WA Business News, 21 October 2015
**The Housing We’d Choose (May 2013) https://www.planning.wa.gov.au/dop_pub_pdf/housing_full_report.pdf
Sunlong Corp/Sunshine Developments/Sunlight Properties images and info extracted from video prepared as Request for Proposal, Lot 42 Queen Street, Bentley as featured on YouTube https://www.youtube.com/watch?v=_Tk1vUTXk08 or Rechitects’ profile page http://rechitects.com.au/profile/ and Sunlong Corp’s main website https://www.sunlongcorp.com.au/