German supermarket giant Kaufland shelves plans for $24m supermarket at Munno Para
A German supermarket giant has dumped plans for a $24 million ’superstore’ in Adelaide’s northern suburbs, dealing a huge body blow to a council’s finances.
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German retailing giant Kaufland has shelved plans to build a $24 million supermarket at Munno Para, putting a $8 million hole into Playford Council’s budget.
Council had been counting on the proceeds of selling the former site of the Munno Para Bowling Club to help pay for its new sporting precinct at Elizabeth.
Kaufland had signed a contract with council to buy the 2.74 ha site on the corner of Curtis Rd and Main North Rd for $8.2 million.
It lodged plans for a large supermarket and three retail outlets with the State Planning Commission in April last year, saying up to 100 people would be employed.
On the same day it broke ground on its Prospect store, the company has confirmed it will not be proceeding with the project as it focuses on other Adelaide sites at Paradise, Prospect and Forestville.
No reasons have been disclosed but traffic management issues are understood to have played a role, with Curtis Rd becoming one of the most congested roads in the northern suburbs.
The dual-lane road remains under the control of council, which has asked the Department of Planning, Transport and Infrastructure (DPTI) to take responsibility so it can be widened.
DPTI has expressed reluctance, leaving council and private landowners having to pay for any traffic management measures such as intersections and traffic lights.
Traffic management was the subject of detailed report by consultants as part of a request by Kaufland for the Munno Para site to be rezoned from ‘commercial’ to ‘suburban neighbourhood’.
The application was considered by a council committee in May, which voted to examine the proposal.
Kaufland’s decision to pull out of the Munno Para deal has significant financial implications for Playford Council, which spent $17 million building a new tennis complex at Elizabeth East and lawn bowling hub at Elizabeth.
The projects — part of a strategy developed by former chief executive Mal Hemmerling — were largely to be funded by the sale of the Munno Para Bowling Club and the Grove Tennis Club at Elizabeth Vale.
The Munno Para Bowling and Community Club was one of several clubs which council forced to relocate to a new complex it built for lawn bowling at Elizabeth.
Its clubrooms were left abandoned until they were torched by vandals in an arson attack in May and demolished by council contractors.
A report presented to council by Mr Hemmerling in February, 2016, said the bowling club site was expected to sell for $8.2 million while the tennis club site, initially valued at $6.2 million, had been sold for $3.4 million.
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Council agreed to sell the tennis club land to a private health company, ACH, as part of a long-term project to develop a health precinct around the Lyell McEwin Hospital.
ACH plans to build a $35 million multi-storey building next to the hospital for disability housing, short term accommodation, residential care and independent living.
The shortfall of $3.1 million from the tennis club and $8.2 million from the bowling club means council still needs to find at least $11.3 million to pay for the new tennis and bowling complexes it built under Mr Hemmerling’s direction.
Sales of surplus council-owned land were a critical part of the strategy developed by Mr Hemmerling to reduce debt and fund new capital projects.
Council since has developed a debt of $148 million, with further borrowings of $20 million expected this financial year.
It would not comment on the decision by Kaufland to shelve the Munno Para project — or how it would manage the financial implications.
“It would not be in the interests of our community to discuss commercial arrangements with potential investors, this is standard business practice across all industries and levels of government,” said a spokesman.
“What we can say is that this council is committed to attracting investment to the City of Playford by utilising surplus land parcels and obtaining the best market value possible for them.
“Building our community and creating jobs and opportunities for our growing population are of paramount importance to council.”
Kaufland confirmed it had decided not to proceed with the supermarket at Munno Para but declined to comment further, citing commercial confidentiality.