THE PATERSON STREET CARPARK WEST ISSUE

 

ABC News posted on 4 Nov 2020 that the “Foundry school at centre of $90M Launceston Creative precinct evicted for unpaid rent”.

Information obtained by ABC shows Foundry is $83,614 behind on its rental payments for its Cameron Street facility – and has not made any payments for more than seven months.

• Foundry director Chris Billing also sole director of Creative Property Holdings, the company behind the precinct. The project also includes a bus exchange.

• Earlier this year the ABC REVEALED Foundry staff had not paid staff, and had not properly paid superannuation for several years….”

•  Foundry no longer operates from staffed premises in Launceston. 

Question – Caveat ? 

In February 2021, a caveat was placed on the Title to 41-43 Paterson Street Launceston (Paterson Central Carpark, owned by Car Parks Super Pty Ltd) by solicitors for Creative Property Holdings Pty Ltd. The placement of this caveat, was not notified to Carparks Super Pty Ltd; and the caveat remains “unregistered” according to Tasmanian Lands Titles Office, because of an ‘administrative matter’, meaning it presently has no jurisdiction in dealings concerning the Title (vol. 147031 fol. 1). 

Question – Legal battle ? – No Contract ! 

There is dispute as to whether the parties actually entered into a contract. Tasmanian law prescribes that all agreements for the sale of real estate (vacant land or developed land) must be in writing and signed by all parties. None of this happened. 

There is no agreement in writing signed by all parties. No contract was exchanged. No contract was settled. 

On 19 February 2021 solicitors for Creative Property Holdings Pty Ltd ACN 637 144 542 as trustee for the Creative Property Holdings Unit Trust (Sole Director Christopher Billing and Applicant) filed a Statement of Claim in the Federal Court of Australia. 

First Respondent, Carparks Super Pty Ltd ACN 607 566 094 as trustee for the Allen Family Superannuation Fund (owner of the property); And Second Respondent City of Launceston Council. 

The Applicant claims that on 20 November 2020, the First Respondent offered to sell the property to the Applicant. It has been revealed that the City of Launceston Council had apparently agreed to be guarantor for Creative Property Holdings Pty Ltd to purchase the property, and had advanced a significant sum as a deposit for Creative Property Holdings Pty Ltd. Solicitors for Council withdrew from the contract and ceased to be guarantor, demanding the return of the deposit it had advanced. 

The legal proceeding is being vigorously defended by solicitors for Carparks Super Pty Ltd. 

Minister Fergusson says the State is not party to this contract, but Question – Where is the money coming from so far ? 

City of Launceston Council controversially sought $10M from the Commonwealth’s Drought Relief Fund. 

Tasmanian Government has advanced $6M to City of Launceston Council on an interest free basis, and then apparently a further $6M on the same basis, all to be forwarded on by CoL Council to the developer (Chris Billing’s Creative Property Holdings Pty Ltd) to purchase the Paterson Street Central Carpark property. 

The development site includes the former 2 Birchall’s retail properties fronting Brisbane Street Mall, currently owned by CoL Council. 

Question – So what has been the involvement of State Government, and why is City of Launceston Council actively working to prejudice the proper rights of Carparks Super Pty Ltd to conduct its much-valued car park business at 41-43 Paterson Street ? 

Minister Fergusson says through the office of the State Co-ordinator-General [John Perry] The State “has been engaging with Launceston City Council, Creative Property Holdings and their financiers in relation to the Creative Precinct Proposal, including a planned bus terminal”. Interestingly, State Co-ordinator General John Perry has not engaged with the owners of the carpark property, Carparks Super Pty Ltd., but seems to have been a pivotal party in all other regards.(Interestingly, Metro, for whom the proposed bus interchange is to benefit, is a Government Business Enterprise, albeit independent and able to act independently). 

There is no responsibility by the CoL Council to provide or expend ratepayers funds on providing bus facilities for a State Government Business Enterprise. 

Initially, The SC-G proposed that the State be a partner in the development proposal, however in due course, the Government decided not to be directly involved Once this information was conveyed to CoL Council, the SC-G then apparently acted to approach a Sydney-based financier, BrickTop to finance the development for Chris Billing’s “group”, who was at that point yet to form Creative Property Holdings Pty Ltd. 

The Creative Precinct proposal has been publicly-stated to be estimated at $90M, a very large sum to be borrowed for a Launceston development. For a $90M development to prosper, a current property investment return of around 6% (rent $5.4M) is a big ask in Launceston when the vacancy level in the Central Area is already very high.

Almost 2 years ago now, City of Launceston Council purchased the Birchall’s retail properties for $8.8M. The shops remain boarded up although occupying a prime Mall frontage and next door to Myer. 

Council’s Expression of Interest process has spectacularly failed, and NOTHING has been forthcoming. 

Launceston ratepayers are funding this expense, notwithstanding the significant loss of rates income previously received from this valuable retail property. 

There is no evidence that the relocation of buses from St John Street to off-street in Paterson Street, will have any advantage for the rescue of the financial viability of the City, or that the loss of the present car park will not be detrimental.