The Land Development Agency made a complicated land deal with the union-linked Dickson Tradies club to swap land in the Dickson shops for the union headquarters further up Antill Street.
The government paid the Tradies club $3.9 million for the block housing the CFMEU in December 2014.
In return, the Tradies will pay $3.2 million plus GST for the carpark beside their club at the Dickson shops at a date yet to be determined.
Meantime, the CFMEU has been operating from its building rent free since December 2014.
The land deal was brokered by construction union ACT secretary and Labor Party heavyweight Dean Hall, also a director of the Tradesmen's Union Club.
The block containing the union headquarters is between the Dickson pool and the Majura playing fields, part of Section 72, which is pegged by the government for redevelopment, with an announcement expected on plans as early as this week.
The government also bought a second nearby block from the Tradies – the former Downer club site and observatory, unused since a fire. It is now negotiating for the Salvation Army land between the two Tradies blocks.
The Land Development Agency has not released the valuations for the Tradies blocks, but Mr Hall, who describes the deal as a win-win, has released three of the reports.
The three deals were:
- The 5500 sq m CFMEU block has three buildings, two used by the union as headquarters and training area and one leased to the Stockade gym, at $104,000 a year. The unimproved value of the land is $283,000. The block's lease allows only a club, construction apprentice training and related accommodation. The Colliers valuation suggests two values: $3.25 million with 18 months' rent free for the union; or $3.55 million with vacant possession. The Land Development Agency paid the Tradies $3.9 million, with 42 months' rent free. The agency said the payment included GST (although the Colliers valuation expected no GST would be payable on the site). The transfer was signed on December 15, 2014, and settlement was four days later.
- The 6970 sq m former Downer club site had an unimproved value of $725,300. Colliers valued it at $45,000, based on its lease allowing only a club and carpark. The agency agreed to pay the Tradies $49,500 on December 15, 2014, again with GST, with settlement in February 2016.
- The Tradies' carpark in Dickson is 5300 sq m and was valued by MMJ at $3.18 million based on building a six-storey building. Mr Hall said the Tradies would pay the $3.18 million plus GST at a date yet to be determined on transfer.
The government called tenders on the car park in late 2012. Mr Hall said the Tradies submitted the top price, at $2.4 million, suggested the land swap and entered negotiations.
The swap was an outstanding deal for the government which now had two blocks in the prime section 72, worth much more than the government paid if the lease was changed to allow apartments, he said. The government also retained control of the Dickson carpark and its revenue, with the Tradies unable to build there for five years, and the Tradies had agreed to pay almost $1 million more than they had tendered.
Mr Hall confirmed the Tradies continues to get rent from the Stockade gym.
The Land Development Agency did not specifically answer questions about whether the swap had gone to cabinet for approval, but chief executive David Dawes said he had authorised the purchases.
The union was rent free because of the cost to the territory of having to maintain a vacant block, and also the fact the club was prevented from developing the carpark for some years, he said.
"This arrangement allowed the government to secure ownership of two key blocks of land to facilitate urban renewal while ensuring the public car park on Block 30 Section 34 would remain available to the public while other significant development works took place in the Dickson area," he said.
On the prices, he said two commercial valuers had agreed. "An independent valuation is indicative only, supporting negotiations, and does not mandate a purchase price," he said. "The sale price for any purchase is dependent on two parties reaching an agreement."