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Govt threatens return to the drawing board on old RAH development

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The State Government has threatened to reject the proposal for the old Royal Adelaide Hospital site from the “preferred” developer – with which it has been negotiating for almost a year – and return to the drawing board.

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Urban Development Minister Stephen Mullighan told reporters this morning that the Government was in the final days of negotiations with developers John Holland and Commercial & General – and that it was a “live option” for the Government to abandon the deal and manage construction itself, using several smaller developers.

Asked what would happen if the State Government was not satisfied with the conglomerate’s final offer, Mullighan said: “We’ll get on and develop the precinct in the same way that we’ve developed the precincts of Bowden and Tonsley.”

“We will manage the process and we will invite separate developers to come in, take smaller proportions of the site and get on with those smaller proportions of the site.”

Mullighan claimed that that had “always been the case” – although Renewal SA Chairman John Hanlon said, when asked by InDaily earlier this year, that his organisation had not presented any Tonsley- or Bowden-style multiple developers option to Cabinet.

Hanlon told InDaily this afternoon that “what I said was that I’m not producing a counter-offer (for) the government”.

“What Cabinet has before (it) is an … offer.

“What we’re considering is the consortium’s offer.”

He said it had always been in the Government’s power to decline the consortium’s proposal and that the “fall-back” position was a public sector-led development like the higher density urban infill project being built at Bowden.

Mullighan told the press conference there would be no penalty to the state if it chose to reject the joint venture’s offer.

“The joint venture of John Holland and Commercial & General know that there is that live option of them missing out and not having the opportunity,” he said.

“That’s why we’ve been in such a good position to push them very hard about what their offer is – not just financially, but also how they propose to deliver the development.

“They’re up against it to … try and convince the state that they are worth partnering with, rather than us master planning the development ourselves.”

The Government has been locked in exclusive negotiations with the “preferred proponents” since October last year.

“You can’t go into these negotiations giving these corporate entities the impression that it’s a fait accompli – that they will definitely win,” Mullighan said.

“We retain our full rights not to proceed with something.”

He said the Government would retain the central elements of the proposed development whether or not it chooses to accept the conglomerate’s offer.

“It will be that mixture of uses … returning some of the site to the Botanic Gardens, adaptively reusing and keeping the heritage buildings that line North Terrace, the development of a research and a development precinct to support activity on the site – and also, as we’ve had for many, many years, the continuation of residential living on the site.”

Late last year the Adelaide City Council passed a motion expressing “profound concern” at the inclusion of residential apartments in the State Government’s vision for North Terrace site.

Park lands advocates argue allowing private residential apartments to be built on the site runs against a “public land, public benefit” principle.

The conglomerate’s proposal – unveiled by the Government late last year – also features more than 1000 apartments, a massive 5-star hotel and the possible addition of a contemporary art gallery. An unpublished proposal, obtained by InDaily last year, also showed an underground recital hall and aged care facilities.

Commercial & General declined to comment.

A spokesperson for Mullighan rejected a report today that the developers had offered to withdraw the residential component of the proposal.

Mullighan also announced today that South Australian company McMahon Services had been selected as the “preferred contractor” for the first stage of demolition works at the old Royal Adelaide Hospital.

The East, Hone and Cobalt wings at the Eastern end of the site, bordering the Botanic Gardens, will be the first buildings bulldozed.

Each was built between 1950 and 1980 and some contain asbestos.

According to the Government, the cost of demolition and remediation of that part of the site will be “in excess of $150 million”.

Demolition works are due to begin in December.

The transfer of patients from the old Royal Adelaide Hospital to the new Royal Adelaide Hospital on the Western end of North Terrace was finished today.

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