Business Specialist CFP | Local Government Expert | Political Adviser
In July 2007 the owner of the Pavilion site paid $25million for it and $10.67m for the site next door, a total of $35.67m for 5,453m2 of land. Compare that with $17m paid for 7,882m2 at Hood Street Precinct in December 2012. Ref. http://www.afr.com/rw/Wires/Stories/2012-12-18/ASXAnnouncements/FRI_01368193.pdf
Now 6 years later the Pavilion site probably has a $50million cost base. To get out of this pre-GFC financial nightmare, the developer closes the markets to allow the site to deteriorate to such a state that even the Minister will consider anything for the site even sixteen storeys to help the developer out of their financial predicament.
On 7 April 2009 Subiaco Council approved a 5 storey development with 3 levels of underground parking for the Pavilion site, not refused it. We have refused the rezoning of the Pavilion site to 19 storeys. Instead we resolved to make the site six storeys, half the height of the Wandana Flats on Thomas Street. Six storeys give more certainty that the site will be developed, attracting more interest from specialist developers. Sixteen storeys will make the site sterile, reducing the number of developers who can fund such a high-rise.
There a two places where sixteen storeys uncomfortably exist. The Raffles on the Swan River and Observation City on Scarborough Beach. Both sites have seen controversy in their approvals.
The financials just don’t stack up for the current owner at the Pavilion markets site. Why should the Minister bail them out with 16 storeys?