James Packer’s Crown and Lendlease win Barangaroo row as “retention” trumps “optimisation”

IN the end, the multibillion-dollar battle of Barangaroo was a war of just two words: “retention” versus “optimisation”. James Packer bet on retention. It won. Big time.

IN the end, the multibillion-dollar battle of Barangaroo was a war of just two words: “retention” versus “optimisation”. James Packer bet on retention. It won. Big time.

In a quintessentially Sydney case, Crown Resorts — which is 46 per cent-owned by Packer — and Lendlease filed proceedings in the NSW Supreme Court in August seeking to enforce what they said were contractual rights to clear sight lines from the Harbour Bridge and Opera House across Central Barangaroo to their developments southwest.

James Packer’s Crown has won its case with Lendlease. Picture: Stuart McEvoy

Crown is building a $2 billion integrated casino, hotel and apartment complex which Packer has described as a tribute to his late father Kerry.

Lendlease is constructing residential towers next door.

Soon after their development agreements were struck in May 2015, the NSW Government announced plans for a Metro train station underneath Central Barangaroo, which led the Barangaroo Delivery Authority (BDA) to increase the size of what could be built there.

Crown and Lendlease said the change would block their views, with devastating financial consequences.

What followed was a three-year private dispute over what could be built at Central Barangaroo and the exact meaning of a “sight lines clause” in Crown and Lendlease’s agreements with the BDA.

The clause says Crown and Lendlease acknowledge the “optimisation” of development at Central Barangaroo is of critical importance to the BDA. It also says the BDA acknowledges that the “retention” of sight lines across Central Barangaroo from the Harbour Bridge to the Opera House are of critical importance to Crown and Lendlease.

The Crown Casino building site at Barangaroo in Sydney. Picture: John Feder

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Yesterday, Justice Robert McDougall, in his final judgment before retiring, said retention beat optimisation.

Crown and Lendlease “submitted, in my view correctly, that the state of affairs that is constituted by retention of the sight lines is absolute and unqualified.

“There are no doubt many ways in which development on Central Barangaroo may be undertaken.

“But the limiting condition is absolute. Retention of sight lines means just that,” he said.

“That can only be achieved by undertaking the development in such a way that it does not infringe on — does not diminish, or restrict, or limit, or impede — those sight lines.”

Justice McDougall said he expected the decision to be appealed.

A spokesman for the BDA said it was “disappointed with the result” and that it would “examine the ramifications”.

A Lendlease spokesman said it was “pleased the court delivered a decision agreeing with our perspective. We were very reluctant to take legal action, but after nearly three years of stalled negotiations felt strongly that we had no option”.

Crown made no comment.