The payment of $1 million to Canberra businessman Pat Seears and another payment to his brother who ran the Lake Burley Griffin paddleboat business are among transactions under scrutiny by the Auditor-General.
Questions have been raised more widely about why Pat Seears was paid so much, and much more than his brother Jim Seears.
The Land Development Agency paid out the Seears brothers last December, and the Mr Spokes bike hire business in January this year, clearing the way to redevelop West Basin.
Pat Seears, of Seears Workwear, bought the paddleboat lease in the late 1990s. In 1999 he sold the business to his brother, who operated it under a sub-lease. Pat Seears charged his brother rent, much of which he paid the government in rent.
Jim Seears and wife Cony made their living from the business, with their sub-lease to expire in 2023. His payment remains confidential but is believed to be less than $600,000, which would be consistent with a deposit of $50,000 recorded on the government invoices register.
The brothers are estranged. Neither is commenting, having signed confidentiality agreements.
The government has refused to release the payments and the valuations it had done on the businesses. As a result, the rationale for the payments and an explanation for why Jim Seears was paid so much less than his brother remains unclear.
The Canberra Times sourced the $1 million payment to Pat Seears from the crown lease documents, which also show that Mr Spokes bike hire owners Jillian Edwards and Martin Shanahan were paid $1.1 million. The couple owned the lakeside building from which they operated the bike business, having bought building and business in 2006 for $480,000.
Their lease was to run until 2027. In the paddleboat case, the building was owned by the government, and leased by Pat Seears, with a lease expiring in 2028.
Land Development Agency head David Dawes knows the Seears brothers, having attended the St Patrick's Brigidine convent school with them in Cooma, where the families were also known to each other. But he dismissed questions about conflict of interest, pointing out that he had nothing to gain personally from any of the transactions.
"I have been open about the fact I attended school with the Seears brothers more than four decades ago. This is not a matter of probity nor conflict of interest. Neither I, my family nor business associates had any interest in the outcome of these acquisitions," Mr Dawes said.
The deals were done after a year of bitter negotiations in 2015, culminating for Mr Shanahan and Ms Edwards with a letter from the agency in August 2015, telling them they could stay put while development went ahead around them.
Soon after, they were contacted by a broker who said he had heard them discussing the impasse in a radio interview, and offered to represent them free of charge. The couple were happy with the representation from broker Ben Parsons and the result. While he did not charge them, he was paid by the Land Development Agency, which confirmed it paid Mr Parsons as Mr Spokes's representative "under the cheque directions for the settlement". It won't say how much.
Documents released under Freedom of Information, while heavily redacted, suggest Pat Seears might have disputed his brother's lease.
In September 2014, Pat Seears wrote to the Land Development Agency requesting "a copy of the sublease which alleges Jim Seears is a valid operator" of the boat business.
"It is understood the sub-lease is the source of some concern and potential delay for the government. It is my intention to remedy the situation as best I can in the interest of the City to the Lake development," he wrote.
The same month, he wrote to the agency to distance himself from comments Jim Seears had made to this newspaper.
"I sincerely regret any hurt or inconvenience my brother's behaviour may have had on you through his newspaper article … I also confirm that I am commencing legal intervention to negate the impact caused to you by my brother operating the site," Pat Seears wrote.
In August 2015, his representative, Peter Dunn, wrote to the agency saying, "Pat has spent considerable legal costs readying the lease arrangements such that it would not be a constraint for either himself or the City to the Lake team."
The same month, Pat Seears emailed then City to the Lake project director Tim Xirakis to organise a meeting: "I will be out of the country until 2nd of September, lets catch up for lunch after then, maybe take Hutchie [deputy project director Richard Hutch] and Dawsey [agency head David Dawes] and the bike hire ones. Ha ha HA …. Cheers mate."
The response, if there was one, has not been released.
The Auditor-General is also inquiring into the payment of $4.2 million to developers Barry Morris and Graham Potts for land at Glebe Park, also part of the City to the Lake project.
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