The decision to buy a block of land in Glebe Park for $4.2 million, four times one valuation for the land, was made by Land Development Agency chief executive David Dawes and went to the board only after the event, the agency has confirmed.
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Questions have been raised about why the agency paid such a high price for the land, owned by developers Barry Morris and Graham Potts.
Documents released under freedom of information laws show the valuation commissioned in August 2014 from Opteon put the block at $950,000 to $1.05 million, on the basis that it was allowed to be used for a restaurant and bar as well as parkland.
Normally in a direct purchase the agency gets three valuations, but in this case just one was sought until nine months later, in May 2015, when a second valuation was done. That Colliers valuation struck a completely different value, of $3.6 million to $3.8 million, on the basis that the owners wanted to build an eight-storey apartment building there – despite that being ruled out under the lease and separately ruled out by the government.
The government paid $3.8 million plus GST, to a total of $4.2 million.
The deal was done midway through last year, and this week, in answer to questions, Mr Dawes said the decision to purchase the block for that price had been his. It did not need separate authorisation from the board because it "related to a current approved project", he said, referring to the City to the Lake project.
But the board had been advised: "In September 2015, the LDA Board was advised that, in accordance with his delegations, the CEO had agreed to purchase Block 24 Section 65 City for $4.18 million," Mr Dawes said.
The government plans to move the stormwater pond from a roundabout on Parkes Way to Glebe Park so it can lower Parkes Way. Part of the land is also sought by the casino for its expansion.
Asked who had sought the second valuation from Colliers, Mr Dawes said it had been sought by his deputy. Early last year the deputy was Dan Stewart, although Mr Dawes would not confirm the name.
Mr Stewart has since left the agency and is now with Elton Consulting working for the casino on its expansion bid. Elton rejected any conflict on Friday, saying casino operator Aquis "had made no submissions to the ACT government prior to Mr Stewart's departure from the LDA [in August 2015], nor had the ACT government considered or taken a position on the matter".
Mr Dawes said the second valuation had been sought after "agreement on a sale price was not able to be reached with the land owner based on the first valuation".
"The deputy CEO of LDA, who had carriage of City to the Lake project, verbally requested a new valuation from another member of the government's valuers – Colliers. This gave the LDA a price range to guide its negotiations."
Asked whether there had been any written instructions to Colliers and if so, whether he could provide them, Mr Dawes said only, "The instructions were to provide advice on the value of the site." He did not elaborate, despite further questions.
Asked whether the government had considered compulsory aquisition, given the land was needed for public infrastructure, Mr Dawes said, "The LDA considers all options for the acquisition of land. Commercial negotiations are generally preferred as providing better outcomes to the LDA in relation to the future use and development of the land."
In separate answers, acting deputy chief executive of the agency, Karen Doran, said the price had been within the recommended range of one valuation "and as such, it was reasonable for the government to proceed with the purchase".
"Ultimately, the value of the land is based on the seller's evaluation of the land and the requirements of the buyer," she said. "... Due to the complex nature of the stormwater system, the government was left with very few options to relocate the pond and as such was required to pursue land which was not currently up for sale."
