investLogan to be axed after massive debt and controversial projects

The investment arm of a large local government will be axed after mounting debts and controversial property decisions including bulldozing a community centre for a project which now may never happen.

Chair of investLogan Steve Greenwood with the three-storey investLogan building at Springwood which cost ratepayers more than $4 million.

The property investment arm of one of the state’s largest councils is in the process of being wound up, amid claims of mounting debts and poor property deals.

Logan City Council decided to put an axe through investLogan in March with an end date expected next year after commercial contracts have expired.

The entity’s demise followed reported debts reaching into the millions along with soured property deals.

investLogan’s annual report from June 30, 2022 showed loans and share purchases that the council made under the entity totalled $9.9 million.

That figure did not include a $4 million line of credit from Queensland Treasury to buy a three-storey Springwood office block.

investLogan’s building at Springwood, came at a cost to ratepayers. Picture: investLogan.

Money was also spent on an abandoned feasibility study for land at Loganholme which the council had hoped would be used for a waterpark and tourist attraction.

However, the state government had other plans and subsequently announced it would resume the land for part of the Coomera Connector.

investLogan’s plans for three blocks of land at Springwood fell over in 2019 after the council decided against selling the land to the entity.

The land was bought in 2010 to stave off developers knocking down houses to make way for residential apartments and townhouses and it was earmarked for community infrastructure including a cultural hub at Springwood.

None of those projects have yet eventuated and there are no plans included in the latest Local Government Infrastructure Plan released in 2022.

After a long-running property dispute, three houses were also bulldozed in Springwood for a town centre development with the land now being used as a dog park and for carparking.

A massive mural was painted on the side of an office tower built in Beenleigh, on land originally deemed surplus. The building was sold to a private company and leased back to the council as office space. Picture: investLogan

investlogan’s biggest project was the development of a seven-storey building, one of two high rises in Beenleigh, which it built using a $16.7 million loan.

Logan council originally sold the York St site to investLogan because the land was surplus to council needs.

On completion, investLogan and its development partner sold the building, known as The York, for $33.52 million to Australian Unity Investment Real Estate Limited.

However, after the sale, Logan City Council spent $5.6 million fitting out the building for its water and waste business, which is now the building’s anchor tenant with a 10-year lease.

Ratepayers also paid for a massive five-storey mural on two sides of The York before the water business moved in.

Another investLogan project which remains unresolved is the development on land at Springwood which is currently occupied by the Lecna community centre.

The Logan East Community Centre at Springwood was once earmarked for a hotel. Picture Facebook

Logan council sold the land in 2021 to investLogan, which intended bulldozing the site and building a hotel and lifestyle precinct.

It is still unknown how a project on bulldozed land in Sunningdale Ave, Rochedale South, will progress after investLogan.

A community and childcare centre was levelled to make way for an “urban renewal project” and low-density residential housing with the six-lot subdivision project under way.

The former East Logan Family Day Care Centre at Rochedale South was bulldozed this year to make way for an urban renewal project. Picture: Google

Criticism was also levelled at the structure of investLogan which had more than five managers and recorded an annual wages bill of more than $1.2 million.

The entity also had an executive board chaired by Steven Greenwood and CEO Medy Hassan.

investLogan CEO Medy Hassan. Picture: Logan City Council

Mr Greenwood said he and the board were disappointed the council had decided to pursue a development approach rather than a mix of profitmaking ventures and community projects.

The executive team and directors, from left: Steve Greenwood; John Atkinson; Cameron McColl; Craig Newnham; Kay Stenzel; Annabelle Pegrum; Medy Hassan; Brendan O’Farrell and Leo Primus.

“It’s been a tough six years and we have achieved a lot for Logan despite hefty challenges including having our foundation project, the Loganholme tourist precinct, compromised by land resumption, the period of interim administration, the absence of a formal shareholder statement of corporate intent, and of course, the Covid years,” Mr Greenwood said.

“We are proud of our demonstrable public record of good market returns, sound financial and risk management and performance, and proper and transparent governance.

“At the council’s request, we have also been exploring opportunities for short-term accommodation for Logan and have acquired an excellent site in Springwood.

“We hope council will see this project to fruition.”

Community and disability housing at Marsden was one of investLogan’s major achievements.

Mr Greenwood listed The York, as one of investLogan’s greatest successes, which he said created 140 jobs and fetched a premium price when sold.

He also said building accommodation for disabled people in Marsden with Blue CHP and Compass Housing Services was a triumph.

He said he was proud of the mixed-business and industry project at Wayne Goss Dr, with all lots fully leased or sold prior to completion and attracting growth enterprises.

One of the building projects on Wayne Goss Drive.

The demise of the entity was welcomed by Logan Ratepayers’ Association.

President Rod Shaw said ratepayers had been paying for investLogan’s poor business decisions for too long and called on the council CEO Darren Scott to investigate.

“The York building in Beenleigh was one on investLogan’s financial investments which produced no benefit for the ratepayers,” he said.

“We suspect, the council could have built the building for the fit-out cost of $5.6 million and not incurred ongoing lease payments.

“It really amounted to nothing more than a loss-making enterprise that made poor decisions to knock down buildings and resume land for no reasonable purpose, which has cost millions and will continue to cost ratepayers.

“I will be asking Logan council CEO Darren Scott for a full cost impact this loss-making enterprise has had on ratepayers.”

Originally published as investLogan to be axed after massive debt and controversial projects