Walker Corporation yet to spend any money on Festival Plaza redevelopment, sparking claims it could become ‘another Le Cornu’
BILLIONAIRE developer Lang Walker doesn’t have to start building his 27-storey office tower in Festival Plaza for six years — sparking claims it could become “another Le Cornu site”.
BILLIONAIRE developer Lang Walker is yet to spend any of his own money on new Festival Plaza infrastructure, and doesn’t have to start building his 27-storey office tower for six years.
Transport and Infrastructure Minister Stephen Mullighan has confirmed to State Parliament that the contract signed with Mr Walker’s company requires work on a new carpark to start by February, and left open the prospect of the Government taking office space in the tower.
It emerged last week that Auditor-General Andrew Richardson is set to deliver a report on the Festival Plaza deal in about October, after a year delay due to factors including discussions with the Independent Commission Against Corruption about how to handle the probe.
Mr Walker was controversially awarded exclusive rights to negotiate with the Government over the site and the deal was finally closed in November after several years of wrangling.
Mr Mullighan said works currently underway at Festival Plaza, in the Riverbank precinct behind Parliament House, were part of an early works program being funded by state taxpayers.
Mr Mullighan said Walker Corp had spent money on designs and development preparation.
He said Mr Walker was yet to spend any of his own money on the $1 billion project, which also includes the expansion of Adelaide Casino, arts upgrades, a new carpark and office tower.
“I think the time frame that we are now seeing roll out has been a result of certainly protracted negotiations and the timing of the different elements of the infrastructure works,” Mr Mullighan said, adding that the carpark was required to begin construction by February next year.
That would then trigger a six-year window in which the office tower must start construction, he said.
“If he (Walker) does not commence that office building within that period of time, then he’s obliged to wear the full cost of the works in kind and the Plaza works, and he loses his development approval for the tower,” Mr Mullighan said.
“We would estimate a build time of approximately 24 months. It is not contracted because it would be unfeasible to substantially commence a commercial office tower and not complete it without incurring significant financial loss.”
Opposition transport spokesman David Pisoni said he feared the state risked a repeat of the LeCornu site saga on Festival Plaza, one of the most valuable pieces of CBD real estate.
Mr Mullighan said the wording of the contract was deliberately structured to avoid such a scenario, and required “actual building” to commence rather than just demolition works.
Mr Mullighan said is was possible the Government would become a tenant in the controversial new office tower, which Labor said during the last election campaign would not be built.
“There is no precommitment from the Government to take out accommodation,” he said.
“I do not think we are ruling it out. If he were to approach government and offer leasing terms on a very favourable basis compared with what the market was providing, for example, then we would be in a position where we would have to seriously consider moving into that premises.”
The Government does have veto power over which tenants take retail space in the building.
Mr Pisoni said the Government had given away huge concessions on a prime piece of land.
“It’s extraordinary that on a prime piece of real estate, that has been locked up for the best part of a decade, to learn there is another six years before we could see more activity,” he said.
“It’s not a good sign for the precinct and it vindicates our view that it’s not the appropriate place for an office.
“There is no doubt that the Government has given away a prime bit of real estate on a wing and a prayer. We could have a potential LeCornu site for the best part of a decade.”