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Developers question Renewal SA's performance

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The development industry has flagged significant concerns over Renewal SA’s performance, in the wake of a controversial State Government decision to sell a lucrative parcel of land at Gillman to a developer without a tender process.

In late December, the Government announced an agreement to sell 400ha of Renewal SA-held land over the next few years to Adelaide Capital Partners, which intends to develop a resource hub at the site. Around the time of the decision more than half of Renewal SA’s board resigned.

The sale went ahead without the Government putting the land out to tender. InDaily understands several other firms had expressed interest to Renewal SA in bidding for the land.

“We’re eagerly seeking some information about that,” Urban Development Institute of Australia SA executive director Terry Walsh told InDaily.

“Where (direct sales) do occur we’re very interested in the process and whether in fact the Government has got the best use of the land.

“In this case we can’t answer that yet, we’re seeking information from Renewal SA.”

The Property Council’s executive director Richard Angove echoed Walsh’s concerns.

“Normally the process would be with publicly owned assets … is that it goes out to a tender so the government on behalf of the South Australian public are getting the best commercial arrangement for the sale,” Angove said.

“We’re not privy as to the reasons why – and there may be extenuating circumstances that have not been revealed as to why the Government elected to take this particular path and treat with one party, it would appear with one party only.”

At the time of the announcement, Housing and Urban Development Minister Tom Koutsantonis defended the decision not to go out to tender – and made it clear it was a Cabinet decision, raising questions about where Renewal SA stood on the issue.

“There were discussions about whether there should be a tender or otherwise but the Government made its own decision to go with Adelaide Capital Partners, given the quality of the people who were looking at it. Mind you this is a piece of land that’s been sitting idle for 30 years,” Koutsantonis told The Advertiser.

Renewal SA manages development and urban renewal projects at Bowden, Lightsview, Playford, Woodville West, Tonsley, and the Riverbank, with more than $1 billion in Government funds committed across its portfolio.

The organisation’s performance came under fire recently after an inner-city development being run by Renewal SA was canned at the last moment.

It has been criticised both internally and externally for some time, with internal sources decrying a culture of “paralysis”.

After the failure of the inner-city development and the resignation of over half the board, the UDIA’s Walsh nominated projects at Marden and Evanston as seriously behind schedule.

“We’re interested in some realisation of the discussions associated with Evanston. That land out there has been under discussion with different parties for some time. We are unsure what’s holding up that decision.

“(And) we would look forward to [Marden] being concluded quickly because that’s been a process that’s gone on for some time as well.”

Presiding member of Renewal SA’s board Bronwyn Pike said via a spokesperson that an announcement on Marden was “imminent”, and tenders for land at Evanston hadn’t met the agency’s valuations.

“In offering these sites by tender, Renewal SA has a responsibility to ensure the best possible outcomes are achieved for South Australians,” Pike said the statement. “This process has led to an imminent announcement on Marden and ongoing negotiations for the sale of the Evanston sites at this stage.”

On the failed inner-city development, known as the Box Factory, Walsh said having a project pulled so late in the process would harm the confidence of the development industry.

“Anything like that where we’ve had a number of months of tender negotiations and developers have spent money on those tenders, which are generally a very expensive exercise, when that leads to a no-decision that’s a great disappointment to the industry.”

Walsh suggested the agency may be struggling with a lack of capital or may have been saddled with too much responsibility by government.

“I know that it has a broad range of tasks which the government has required of it – that makes life difficult for Renewal SA. As an industry we’re particularly looking for some key foci to emerge.

“The government is important to make those decisions. We keep asking the questions when is that land going to be made available and of course that is of major concern to us.

“We’re always concerned as to whether the working capital of a government agency is the restriction to it achieving its charter. We don’t know that as an industry, but we sometimes hear that there may be capital funding issues and if that is the case then that’s of concern and it certainly would make it difficult for Renewal SA to achieve its charter.”

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