Auditor-General Maxine Cooper is investigating the Land Development Agency's purchase of Glebe Park and two businesses on the lakeside last year, marking her audit a high priority.
Both deals have attracted controversy. The government's land agency bought Glebe Park block from developers Barry Morris and Graham Potts for $4.2 million, a price four times one valuation. The government wanted the parkland so it can build a stormwater pond there, and move the pond from Parkes Way. Part of the land is also sought by the casino for an expansion.
Questions have been asked about why the land was not compulsorily acquired, given it was needed for public infrastructure, and why the agency paid so much. A valuation for the agency in 2014 valued the land at about $1 million, considering the only use allowed under the lease is a restaurant and bar. But a second valuation last year valued it at $3.6-$3.8 million based on the owners' desire to build an apartment block on site, despite such development being ruled out by the lease and the government. The agency paid $3.8 million plus GST.
The agency also bought out the Mr Spokes bike hire business on the lakeside at West Basin last year, along with the paddleboat hire business.
Both were drawn-out and difficult transactions, with Mr Spokes owners Jillian Edwards and Martin Shanahan close to desperation at one point over what they said then were bullying tactics from the agency, which threatened at one point to leave them in place and build West Basin around them. The couple said this year they were satisfied with the eventual settlement for their business and the building they had bought in 2006.
The boat hire was a more complicated situation, with the buildings owned by the government, the head lease owned by Pat Seears, but the business bought and run by his brother Jim Seears about a decade ago. Both men have been paid out.
In her schedule of coming audits, Dr Cooper said she was doing a high-priority performance audit to consider how the Land Development Agency made the purchases of land in Glebe Park and land and businesses on the lakeside to "consider whether or not this was in accordance with relevant legislation, policies, procedures or any other requirements". She did not refer directly or specifically to the boat and bike hire businesses, but both were negotiated last year and presumably are the ones involved in her audit.
The Canberra Times has reported that the decision on the Glebe Park land was made by agency chief executive David Dawes without referring to the board on the purchase until after the event. Mr Dawes said it did not need separate authorisation from the board because it "related to a current approved project" – the City to the Lake project.
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