❓ Mr. Wyatt questions the Premier regarding the sale of government land to Burswood Entertainment Complex for less than its assessed value. The Premier defends the sale, citing remediation costs and existing agreements.
AnsweredQoN 392Legislative Assembly
QuestionView source ↗
BURSWOOD
ENTERTAINMENT COMPLEX — LAND VALUATION
392. Mr B.S. WYATT to the Premier:
I refer to the decision to sell 5.8 hectares of
government-owned crown land for $60 million for the purposes of a new hotel and
his statement in The West Australian on 2 August 2012 that the unencumbered value of the land being sold was $95 million.
(1) Who
provided the government with the valuation of the land?
(2) Did the
valuation of the land take into consideration the fact that the land would need
to be remediated; and, if so, what was the estimated cost of the remediation?
(3) Why was
the land sold for $35 million less than its valuation?
ENTERTAINMENT COMPLEX — LAND VALUATION
392. Mr B.S. WYATT to the Premier:
I refer to the decision to sell 5.8 hectares of
government-owned crown land for $60 million for the purposes of a new hotel and
his statement in The West Australian on 2 August 2012 that the unencumbered value of the land being sold was $95 million.
(1) Who
provided the government with the valuation of the land?
(2) Did the
valuation of the land take into consideration the fact that the land would need
to be remediated; and, if so, what was the estimated cost of the remediation?
(3) Why was
the land sold for $35 million less than its valuation?
AnswerView source ↗
I thank the member for Victoria Park for the question.
(1)–(3)
Yes, the state government did negotiate a sale of 5.8 hectares of land to the
Burswood entertainment centre. That was done as part of the proposal for the
development of the new hotel. We agree on that. Under the 1985 Casino (Burswood
Island) Agreement Act, Burswood has an entitlement to purchase an additional 10
hectares.
Mr B.S. Wyatt :
Does it have an entitlement to purchase or do you have an entitlement to sell?
Mr
C.J. BARNETT : It has an entitlement to purchase. Burswood has the right to
acquire an extra 10 hectares of land adjacent to the casino complex. That was a
right given to it under the original development and agreement act during the
Brian Burke government in 1985. The only issue is: at what price would the
state sell Burswood the land? It had the right to buy it; that is well
established.
Mr
B.S. Wyatt : At market rates.
Mr
C.J. BARNETT : I am answering your question. I guess Burswood had an
expectation of what it might pay as a buyer under its agreement act. The state
obviously had to determine what a sale price would be. Various evaluations were
done internally within government.
Mr B.S. Wyatt :
None externally?
Mr C.J. BARNETT :
No; they were done within government. I have raised some questions about the
way it was done. For example, some comparisons were done between land on the
Burswood Peninsula and St Georges Terrace property.
I find that a bit
odd, frankly. This is not St Georges Terrace; it is an area on the peninsula.
Several members
interjected.
Mr C.J. BARNETT : Does the member want an answer or not? I am
happy to answer.
Mr T.R. Buswell : You are doing a good job.
Mr C.J. BARNETT : Thank you! I appreciate the support.
Mr B.S. Wyatt : Come on! Focus, Premier!
Mr C.J. BARNETT : I am focused. The member for Victoria Park
keeps on interrupting. I think it is a serious question and I am surprised the
member has taken to this day to ask it.
The valuation we
ended up getting from within government—I do not know who did the
valuation, but it was done within government through the land agencies—was
$95 million for an unencumbered, if you like, clean and clear site. That is the
accepted valuation. The estimated cost, basically from industry sources and
around the construction industry, to clean-up and remediate that site would be
in excess of $30 million; no-one will know until people start excavating to
build the foundations of the hotel. It is not a simple site, and on that basis
we deducted $30 million from the valuation—not ''we'' the
government but that was the process through the government agencies. That
brought the site value down to somewhere around the $60 million mark. There was
then a commercial negotiation between Burswood Entertainment Complex and the
state government over the value. Burswood was not willing to pay, initially,
anywhere near $60 million. Through those negotiations, which were conducted
quite properly through government agencies and led by the Department of the
Premier and Cabinet, the agreed price was $60 million all up—so $60 million
inclusive of stamp duty. That was the process; it was quite proper. At the time
we announced to the media conference the development of the hotel, I made the
valuation and the valuation process very clear, and it was $60 million. I have
to say it is a good result for the state government: $60 million for land that
has all sorts of problems attached to it. It will now be part of an expanded
complex. The state government will also collect another $50 million in gaming
taxes and around another $2.5 million going to the Burswood Park Board for
management of the parklands around it. That is basically the deal.
(1)–(3)
Yes, the state government did negotiate a sale of 5.8 hectares of land to the
Burswood entertainment centre. That was done as part of the proposal for the
development of the new hotel. We agree on that. Under the 1985 Casino (Burswood
Island) Agreement Act, Burswood has an entitlement to purchase an additional 10
hectares.
Mr B.S. Wyatt :
Does it have an entitlement to purchase or do you have an entitlement to sell?
Mr
C.J. BARNETT : It has an entitlement to purchase. Burswood has the right to
acquire an extra 10 hectares of land adjacent to the casino complex. That was a
right given to it under the original development and agreement act during the
Brian Burke government in 1985. The only issue is: at what price would the
state sell Burswood the land? It had the right to buy it; that is well
established.
Mr
B.S. Wyatt : At market rates.
Mr
C.J. BARNETT : I am answering your question. I guess Burswood had an
expectation of what it might pay as a buyer under its agreement act. The state
obviously had to determine what a sale price would be. Various evaluations were
done internally within government.
Mr B.S. Wyatt :
None externally?
Mr C.J. BARNETT :
No; they were done within government. I have raised some questions about the
way it was done. For example, some comparisons were done between land on the
Burswood Peninsula and St Georges Terrace property.
I find that a bit
odd, frankly. This is not St Georges Terrace; it is an area on the peninsula.
Several members
interjected.
Mr C.J. BARNETT : Does the member want an answer or not? I am
happy to answer.
Mr T.R. Buswell : You are doing a good job.
Mr C.J. BARNETT : Thank you! I appreciate the support.
Mr B.S. Wyatt : Come on! Focus, Premier!
Mr C.J. BARNETT : I am focused. The member for Victoria Park
keeps on interrupting. I think it is a serious question and I am surprised the
member has taken to this day to ask it.
The valuation we
ended up getting from within government—I do not know who did the
valuation, but it was done within government through the land agencies—was
$95 million for an unencumbered, if you like, clean and clear site. That is the
accepted valuation. The estimated cost, basically from industry sources and
around the construction industry, to clean-up and remediate that site would be
in excess of $30 million; no-one will know until people start excavating to
build the foundations of the hotel. It is not a simple site, and on that basis
we deducted $30 million from the valuation—not ''we'' the
government but that was the process through the government agencies. That
brought the site value down to somewhere around the $60 million mark. There was
then a commercial negotiation between Burswood Entertainment Complex and the
state government over the value. Burswood was not willing to pay, initially,
anywhere near $60 million. Through those negotiations, which were conducted
quite properly through government agencies and led by the Department of the
Premier and Cabinet, the agreed price was $60 million all up—so $60 million
inclusive of stamp duty. That was the process; it was quite proper. At the time
we announced to the media conference the development of the hotel, I made the
valuation and the valuation process very clear, and it was $60 million. I have
to say it is a good result for the state government: $60 million for land that
has all sorts of problems attached to it. It will now be part of an expanded
complex. The state government will also collect another $50 million in gaming
taxes and around another $2.5 million going to the Burswood Park Board for
management of the parklands around it. That is basically the deal.
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