Property Council ACT executive director Catherine Carter has accused the agency of ignoring advice regarding Denman Prospect, which failed to change hands following a lengthy negotiation process with a private company.

In a statement issued on Thursday, Ms Carter said the agency’s decision to develop the 107 hectare englobo site itself had the potential to damage the local economy and workforce.

“There was consistent advice from the Property Council that it would be very difficult for a site of this size to be released to one developer,” she said.

“The preferred industry position was, and remains, that this site be broken up into not less than three or four separate parcels.”

But the chief executive of the Land Development Agency, David Dawes, says the council’s claims are wrong and the LDA did not engage directly with them “as they are not the relevant industry body in this case”.

The sale of the site, the largest parcel of land released for sale by the agency, fell through after three months of negotiations initiated following a failed auction in June.

The agency now plans to work with Master Builders Association of the ACT and the Housing Industry Association to develop the site, which could house up to 1700 homes and a commercial centre.

However Ms Carter said the decision had prompted concerns that the agency was moving to become a “monopoly provider” of serviced land in Canberra.

“If the LDA decides to move into the development space, local developers will have to scale down their businesses and put off staff,” she said.

“If there are no opportunities here, local industry will move interstate.”

Mr Dawes refuted the claim and said the outcome of the LDA developing the land would be a boost for the local construction sector.

“Even though LDA will develop the land, it will still employ local consultants and local contractors from the private sector to design and construct the development,” he said.

“By directly managing the development the LDA will be able to ensure that local builders will have the opportunity to purchase land.”

Mr Dawes said the agency had already engaged with executives from the HIA and the MBA about how land might be released in various sized packages to suit member’s individual requirements, including “superlots”.

He said the option to sell the Denman land as two smaller parcels had been considered late last year but the decision had been taken to sell a single, larger site for a number of reasons.

This included ensuring an integrated development and reducing the interface dependency risks of roads and servicing infrastructure, and reducing the chance of claims against the territory.

Mr Dawes said to properly manage the risk associated with two developers working on adjacent sites the second parcel would have to be delayed until design on the first block was completed.

“This would delay the land release program by another year and the supply of ‘shovel ready’ blocks to end purchasers,” he said.