CFMEU-linked Tradies Club got up to $2.6 million in benefits from 'favourable' Dickson land swap
Advertisement

CFMEU-linked Tradies Club got up to $2.6 million in benefits from 'favourable' Dickson land swap

The ACT government made a land swap deal "on favourable terms" with the union-linked Tradies Club over land in Dickson that benefited the club to the tune of up to $2.6 million, an audit has found.

ACT Auditor-General Maxine Cooper's audit, tabled on Thursday, investigated the tender process surrounding a complex land swap deal involving the CFMEU-linked Tradies Club and the government.

Land owned by traders in Dickson shops including the car park they bought from the government. And the two blocks behind the pool which the government bought from the Tradies, including the CFMEU headquarters.

Land owned by traders in Dickson shops including the car park they bought from the government. And the two blocks behind the pool which the government bought from the Tradies, including the CFMEU headquarters.

The audit detailed a series of weaknesses and failures in the tender process to sell a block of land to the club as part of the deal, failures in record-keeping and significant concessions given to the club.

Dr Cooper found the economic development directorate's weak tender process meant it failed to achieve an open, transparent and contestable sale.

Auditor-General Maxine Cooper.

Auditor-General Maxine Cooper.Credit:Graham Tidy

Advertisement

Her report said the directorate had a "strong and ongoing" focus to negotiate an outcome with the Tradies, which ultimately meant "significant concessions" were granted to the club.

The auditor-general found the ACT got the worse-end of the deal, relinquishing an estimated $2.4 million to $2.6 million.

The deal was struck in December 2014 and saw the government pay the club $3.9 million for a block of land currently housing the union's office in Rosevear Place, Dickson, and $45,000 for a nearby block formerly housing the Downer club.

In return, the government sold the Dickson carpark, next to the Tradies Club, through a tender process to the club for $3.5 million, but settlement was delayed until a nearby development was completed.

That tender process, union secretary and club chairman Dean Hall has previously said, saw the club submit the top price, at $2.4 million, to buy the carpark block, but ultimately the club agreed to pay $3.5 million.

Mr Hall announced his resignation from the union position last week, to take effect later this year.

The audit report found that the sale of Block 30, Section 34 Dickson to the club meant taxpayers missed out on between $1.57 million to $1.82 million in potential revenue.

That was primarily due to concessions that the Tradies would only have to replace 84 carparks on the site, instead of the 139 originally assumed in the tender process or the 154 that formed the basis of a MMJ valuation relied on.

The ACT Government Solicitor's Office's also told the audit office that the economic development directorates' acceptance of "the Tradies' requested changes" represented "significant departures" from the original terms of the tender.

An interview between the audit office and the former director of sustainable land strategy detailed in the report also shows the former public servant was concerned that "it was clear the government wanted the Tradies to win" the tender.

"I mean, the reality was that the Tradies were close allies of the ... government and the Labor party ... I was aware that the Tradies had meetings, had had meetings with the government," he told auditors.

But auditors found no evidence to substantiate that belief, and Chief Minister Andrew Barr told auditors that "neither he nor, to his knowledge, other members of the government subscribed" to such views.

Dr Cooper's report also found that advertisements for the tender were not advertised nationally, potentially limiting the pool of potential tenderers for the block.

The report also found the government paid the club up to $830,000 more than the "potential worth" of the block of land Block 6, Section 72 Dickson - the Rosevear Place block housing the CFMEU offices.

Planning Minister Mick Gentleman said on Thursday the audit "found no evidence of wrong-doing on the part of any ACT government ministers or ACT government officials" and that it "puts the matter to bed".

He said that since a previous audit report into LDA deals in late 2016, "significant work has been undertaken to improve processes and governance for large land transactions".

While the government received a final draft of the report from the audit office a month ago, he said the government was still "digesting" it and would respond formally later.

Opposition leader Alistair Coe said the deal amounted to a "monumental dudding" of taxpayers in favour of "the Labor party's fellow travellers" and raised serious concerns about government integrity and tender processes.

Despite the audit office uncovering no evidence of political involvement, Mr Coe said Chief Minister Andrew Barr should be held to account, as the governance and tenders processes were his responsibility as Treasurer.

The former director-general of the economic development directorate also said the conclusions in the report about value for money did not take into account the overall value of the land swap and the provision of "a large parcel of land to provide social housing and for other community uses".

Dickson land swap - a timeline

November 2010: The ACT government requests a valuation from MM on Block 30, Section 34 at the Dickson shops. The valuation puts the car park block at $2.5 million at the time, on the basis of building a two-storey building, and the need to replace 134 car parks on the site.

December 2010: The MMJ valuation reveals the Tradies Club are negotiating the purchase of Block 30, Section 34 for a "substantial redevelopment and replacement of the club facilities".

2012: The ACT government puts out a wider call for expressions of interests to buy Block 30, Section 34.

March 6, 2014: Coles Group Property Developments proposes to redevelop Block 21, Section 30 and Block 13 Section 72 Dickson into a Coles and Aldi, with more than 500 car parks below and 150 apartments on top. The blocks are close to the Tradies and Block 30, Section 34.

2014: The Land Development Agency makes the complicated land deal with the Dickson Tradies to trade Block 30, Section 34 for three parcels of land - Block 30 Section 34, Block 6 Section 72 and Block 25 Section 72, Dickson. The Tradies will pay $3.18 million to develop the site, excluding GST, once the Coles development is finished to ensure there is still car parking in the area.

The government retains control of the car park on Block 30, Section 34 and its revenue, with the Tradies unable to build there for five years. Meanwhile the government pays the Tradies $3.55 million plus GST for the CFMEU block and $45,000 plus GST for the former Downer Club site at section 72.

May 21 2015: Coles' proposal to redevelop Block 21, Section 30 and Block 13 Section 72 Dickson into a Coles and Aldi is rejected by ACT Planning, holding up plans for the Tradies sites.

March 2 2016: Coles Group Property Developments submit a revised plan for Block 21, Section 30 and Block 13 Section 72 Dickson with 140 apartments instead.

June 30 2016: Coles' revised plan for Block 21, Section 30 and Block 13 Section 72 Dickson is approved.

July 29 2016: North Canberra residents file an appeal in ACAT against the approval of Coles' proposal to redevelop Block 21, Section 30 and Block 13 Section 72 Dickson. That appeal is ongoing.

September 26 2016: Details of the deal are aired for the first time in the Canberra Times. Then CFMEU ACT secretary Dean Hall described the deal as a "win-win".

March 30 2017: The Greens and Liberals combine to force ACT Planning Minister Mick Gentleman to table documents on the land swap.

September 7 2017: ACT Auditor-General Maxine Cooper announces she is investigating the land swap deal.

October 23 2017: ACT government announces plans to build second Common Ground low-cost development on Dickson Section 72.

November 2 2017: ACT Chief Minister Andrew Barr survives a no-confidence motion orchestrated by the Canberra Liberals, over alleged corruption in the Dickson land swap deal and others.

November 21 2017: It's revealed the CFMEU received $3.8 million from the Tradies Club in the months after the territory government paid the club $3.9 million as part of the land swap.

Loading

February 16, 2018: CFMEU ACT secretary Dean Hall quits after eight years at the helm. His retirement takes effect in April. It's understood he has accepted a role within the Tradies Group.

February 22, 2018: The Auditor-General releases her report into the Dickson land swap, finding the deal did not represent value for money for the ACT.

Daniel Burdon is a reporter for The Canberra Times

Katie Burgess is a reporter for the Canberra Times, covering ACT politics.