The Land Development Agency will develop the new Molonglo suburb of Denman Prospect after negotiations fell through for its sale with a private company. The government had been in negotiations with the organisation for the past three months following a failed auction in June. Only one party had qualified to bid at the auction, so it did not go ahead.
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At 107 hectares, the Englobo site was the largest parcel of land released for sale by the LDA and included the development of up to 1700 dwellings and a commercial centre.
LDA chief executive David Dawes said while it was disappointing to be unable to reach agreement on the sale, there would be no change to the government's published land release program. He said the agency would work with the Master Builders Association of the ACT and the Housing Industry Association to develop the third suburb in the Molonglo Valley.
''By directly managing the development, the LDA will be able to ensure that local builders will have the opportunity to purchase land on which to build new homes for Canberra families,'' Mr Dawes said.
Deputy director-general for land development Dan Stewart said it had really come down to a failure to meet on commercial terms.
''We had set a reserve through the process, as we do with all of our land releases, and, through the negotiations the participant, was unable to come up to the agreed reserve,'' he said. ''We had worked through a variety of issues … but unfortunately we were unable to get over that final hurdle. Both parties acknowledged we were not going to get to a common point and at that point the negotiations ceased.''
He said the suburb would be developed at the same time it would have if the sale had proceeded. Mr Stewart said the government would make more money from developing the estate itself to reinvest.
Master Builders Association of the ACT executive director John Miller said he was not surprised that such a large block of land had failed to sell in the current market. He said the association would work to ensure it would benefit Canberra's builders.
''We're keen to make sure that local industry gets the opportunity to participate in the further development of Molonglo,'' Mr Miller said.
Housing Industry Association executive director for ACT and southern NSW Neil Evans said this method of developing a suburb was a good initiative for the ACT.
''The thing that I like about this concept is the fact that it will generate more work for small, medium and large builders in the ACT region,'' he said. ''That's got to be a good thing for the economy.''
Colliers International ACT state chief executive Paul Powderly, who marketed the sale for the LDA, said the land in Denman would be popular when it was released, as blocks were selling quickly in the rest of Molonglo Valley.
The Land Development Agency plans to release blocks in Denman late next year.
