Questions over Barangaroo authority’s ‘good faith’
The legal battle over the Central Barangaroo development on Sydney Harbour that could block views from James Packer’s Crown Resorts casino hotel and a Lendlease luxury apartment project wound on yesterday, with the court hearing allegations that the authority overseeing the area’s redevelopment had not acted in good faith in its negotiations.
One of the latest twists in the case, which hinges on whether Crown’s and Lendlease’s views from the Harbour Bridge to the Opera House have been properly protected, has resulted in Canadian giant Oxford Properties Group being dragged into proceedings.
Melbourne developer Grocon, which is leading the development, in June selected Oxford as its partner on the $1.4 billion office part of the Central Barangaroo precinct. That move came days ahead of a deadline Grocon had on a high-interest debt facility with MaxCap that was repaid. Grocon refinanced its operation and remained at the head of the overall $5 billion precinct it is undertaking with Scentre Group and Aqualand.
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Crown’s barrister Neil Young QC told the court the Barangaroo Development Authority had entered into a binding legal commitment to Grocon and Oxford ensuring their proposed office complex would not have less than 59,000sqm of office space.
He said the authority had told the pair it would tell Crown and Lendlease about the commitment but “the authority never did that”. This meant the authority had not fulfilled its obligations to conduct negotiations in good faith and to protect the sightlines, he said.
The authority last month tried to end legal action by offering to cut the size of proposed buildings between their towers at Central Barangaroo and the Opera House and Harbour Bridge. It put forward 11 proposals over two years of negotiations.
The court submissions came as the BDA released its annual report, showing a substantial jump in “other” income to $449.53 million in the past financial year.
The leap in income appears to be linked to the awarding of the tender to Grocon but sources said that other factors may also have influenced the shift.
The BDA declined to comment on the prospect of the income lift being derived from the bidders.
Uncertainty remains about the project’s financial status and, notably, the ongoing court case may influence the final financial payments.
The BDA also pointed to the long-term nature of the development deal, with the precinct, that now includes a metro station, not due to be complete until 2024.
“Fees for development rights at Barangaroo are staggered over the course of the development,” a BDA spokesman said.
Although the authority is at legal loggerheads with Crown and Lendlease, the BDA spokesman said it was “confident that it will deliver an excellent public outcome at Central Barangaroo”.
This article originally appeared on www.theaustralian.com.au/property.
