‘Desperate’ state overpays $8.6m for inner-city homeless hotel

Taxpayers have footed the bill for the government to overpay for an inner-city hotel in a move described as an effort ‘to get runs on the board’ amid the housing crisis.

• ‘Clowns’: War of words erupts

A “desperate” state government paid $8.6m above market value to purchase an inner-city hotel already used to house people at risk of homelessness.

The Courier-Mail can reveal the government paid $34m for the former Park Hotel at Spring Hill despite a valuation in July, three months before settlement, noting the 84-room site was worth significantly less.

The Park Hotel in inner-Brisbane. Picture: John Gass

Independent analysis by Herron Todd White valued the seven-storey, former four-star hotel at $25.4m – some $8.6m less than the state government paid for it.

The valuers were provided the original contract of sale that indicated the government indicated a purchase price of $35m, equating to some $390,000 per room.

Herron Todd White valued the former hotel – which had been leased by the state government since April 2021 – on July 20, 2023.

“After analysis of available market evidence, we consider the purchase price is above acceptable market parameters and not supportable by market evidence,” the valuation notes.

Despite the lower valuation, Housing Minister Meaghan Scanlon’s department pushed ahead and settled the purchase for $34m on October 30.

Ms Scanlon held a press conference at the site on November 17 to trumpet the buy as one of many “strategic purchases” the government had made to help ease worsening housing challenges.

She defended the purchase last week, noting the valuation excluded GST and did not consider the length of time it would take to build a similar building in a similar location.

■ ‘Clowns’: What you said about ‘incompetent’ hotel deal

Housing Minister Meaghan Scanlon last month

“We are purchasing hotels, motels and retirement villages to help vulnerable people now while we build more homes for Queenslanders,” she said.

“For every room in this building, it means one less person sleeping rough.

“We’ve built thousands of homes and we’re building thousands more, but buying these places as well means we can help more people sooner.”

A whistleblower familiar with the purchase said bureaucrats were frantically buying sites to put a roof over Queenslanders’ heads.

“These hotel and motel purchases are desperate attempts to get runs on the board because the government has been so slow delivering outcomes through traditional programs,” they noted.

The former Park Hotel had been leased by the government for some 30 months before it was purchased to allow it to “refurbish rooms and communal spaces to better support at-risk Queenslanders”. Premier Steven Miles has launched a $3bn Homes for Queenslanders plan to keep people in homes and support renters. Ms Scanlon in November said the state was buying and leasing hotels, motels and retirement villages “to meet that immediate need for accommodation”.

“These rooms not only provide a roof over the heads of vulnerable Queenslanders but ensures they can easily access essential wraparound services as well as amenities including public transport, schools, medical care, shops and parks,” she said.