The Victorian Liberal Party is actively considering selling off its Exhibition Street headquarters for $30 million to get itself out of financial strife if it fails this week in its high-stakes court case against its main donor.
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The Age can reveal that two separate offers of more than $30 million have been received for the Exhibition Street building, known to generations of Victorian Liberals simply as '104', and are being assessed by real estate consultants hired by the party.
But a sale of the party's long-term head office at 104 Exhibition Street might deepen internal divisions, with some rank-and-file members opposed to relinquishing the asset.
Tension is mounting in Victoria's Liberal circles as the party and its backers prepare for Thursday's Federal Court decision in the bitter dispute between the state branch's executive and its main financial backer, the $70 million Cormack Foundation.
Support for a sale from the party’s ruling Administrative Committee is far from assured but an adverse court ruling on Thursday might exacerbate the financial pressure on the party.
The party originally paid $576,000 for the property, but was forced to take out a $2 million mortgage on the building in 2016 after former state director Damien Mantach defrauded $1.5 million of party funds.
State president Michael Kroger, the driving force behind the party's decision to sue the investment fund, refused to respond on Monday to comments from former premier Jeff Kennett that Mr Kroger's position was "untenable" if the court does not hand control of the Cormack millions to the party on Thursday.
The party’s case is the foundation, formed in the 1980 with money raised from the sale of radio station 3XY, exists for the benefit of the Liberal Party and that Cormack’s directors have been acting beyond their remit by withholding donations to the party because of worries over financial governance.
But Mr Kroger, who has offered to personally underwrite $1 million of the party’s legal costs, has been criticised in the conservative media for pushing the case all the way to court when even a “win” on Thursday will not deliver full control of the Cormack money to the party.
The latest reports suggest that a second round of litigation is already planned, targeting one of Cormack’s directors, if the Judge Jonathan Beach's decision, to be delivered on Thursday in Melbourne, does not deliver control of the money to the party.
Against the background of financial uncertainty, the sale of the six-storey Exhibition Street building, owned by the the Liberals since 1976 and with much of its 1800 square metres of office space occupied by other tenants, is now back on the agenda.
But a sale of the party’s main financial asset will be controversial internally with multiple sources telling The Age the prospect of an auction has raised alarm among grassroots party members who consider the building a symbol of security and stability.
Meantime the pressure was mounting on Mr Kroger with Mr Kennett calling on him to go if the Cormack case was lost, and risking reopening the long-running feud between the two Liberal heavyweights.
Mr Kroger was asked in a cable TV interview on Monday about Mr Kennett’s criticism but the party president said he would not talk about the Cormack case until Judge Beach had handed down his decision.
“It’s a very complicated situation and Thursday will result in a decision made by the court and there will be some comments made after that,” Mr Kroger told Sky News.
“I’m not going to pre-empt the decision of a Federal Court judge, I don’t think that’s appropriate.”
