Lord Mayor Nick Reece under fire for accepting $20k election donation from apartment developers, despite past promises

Nick Reece has been accused of accepting a $20k campaign donation from a company at the heart of a multimillion dollar apartment project.

Lord Mayor Nick Reece pocketed a large campaign donation from a business developing an $80m apartment project in West Melbourne, despite promising to refuse money from property developers.

The $20,000 donation, one of Mr Reece’s largest in his $1m election war chest last year, came from Audi Centre Melbourne.

The Audi Centre is owned by Zagame Automotive Group, which in October 2023 had an application approved to develop a site at 577 King St into three multistorey buildings with 287 apartments, food and beverage outlets and office space.

The Audi Centre Melbourne building on King St, West Melbourne.

The King St site currently houses the Audi Centre Melbourne showroom and service centre.

The project was described as a “joint venture for the redevelopment of the site” between Zagame Automotive and property developers PDG in a Future Melbourne Committee meeting where the build-to-rent development was approved by council.

Mr Reece moved the 2023 motion to approve the application, in his previous role as deputy to Sally Capp and head of the council’s planning portfolio.

“I am very pleased to be moving this motion for this development in West Melbourne,” he said at the time.

“All things considered, this is delivering quantity and quality to the people of West Melbourne.”

About 6 per cent of the apartments will be set aside for affordable housing in the build-to-rent project, known as Roden And King and designed by DKO Architects.

The Herald Sun is not suggesting any impropriety was involved in the approval.

North and West Melbourne Association spokeswoman Mary Masters, who contested the 2024 election on the Voices for Melbourne community ticket, said the donations system eroded trust in local government.

The Roden And King project by Zagame and PDG has three buildings up to 10 storeys.

“There is no room in local politics for million-dollar campaigns fuelled by donations from property developers,’’ she said.

“It’s deeply concerning that the state government has not yet stepped in to enforce donation and electoral reforms to clean up this mess.’’

Mr Reece said he had acted with the “utmost integrity” during his campaign.

“My team went above and beyond the required donation laws to ensure the utmost integrity of our campaign – we adopted the toughest set of rules ever imposed on a successful candidate for Lord Mayor,” he said.

“We asked people to support our campaign because we offered good leadership for Melbourne. There is no connection between any donation and any motion or decision of council.”

“I’ll declare any conflicts of interest if they arise, but I won’t be commenting further on individual donors out of respect for them – my focus is on delivering results for Melbourne.”

Ms Masters said the system meant that councillors had to stand outside a meeting to abstain from voting on a decision because of conflicts of interest created by accepting donations.

“We expect that these elected representitives are in the room voting on critical issues that impact residents.

“We need assurances that elected officials haven’t taken money from anyone who could benefit from councillor decisions - or anyone who has previously benefitted. It’s time to restore integrity to Melbourne City Council.’’

Lord Mayor Nick Reece received $20,000 from Audi Centre Melbourne.

A Zagame Automotive spokeswoman said the Audi Centre donation was because managing director Bobby Zagame believed his views “aligned” with Mr Reece.

“Bobby is both a resident and business owner in the city of Melbourne and a number of Nick Reece policies aligned with his values,” she said.

Zagame Automotive Group boss Bobby Zagame (left) with his brother Adrian.

Mary Masters (right) ran on the resident-based Voices for Melbourne election ticket with Lord Mayoral candidate Greg Bisinella. Picture: Ian Currie

Mr Reece raised almost $1m to win the council election last October. The former Deputy Mayor secured 23 per cent of the primary vote, and after preferences defeated the Greens’ Roxane Ingleton 62-38 on a two-ticket preferred basis.

Aside from Mr Reece’s personal contribution of $62,000, the Audi Centre was the equal-third biggest donor, only behind the electrical and plumbing unions.

Mr Zagame also donated $10,000 to rival candidate Arron Wood’s doomed run at the top job, but under his own name rather than via the Audi Centre business.

During his election campaign, the incumbent lord mayor also received a $25,000 donation from the Marriner Group which operates the Regent Theatre, which Mr Reece had pledged to sell.

Also, a $2500 donation from fellow councillor and Queen Victoria Market trader Mark Scott may create a conflict of interest for Mr Reece and the three councillors elected on his ticket when it comes to decision making involving the market.

Mr Reece pushed back on calls to reveal donations in real time during his successful election campaign when he raised by far the most money of any council candidate in Victorian political history.

Mr Reece said he would not accept donations from property developers in the City of Melbourne. Picture: Jason Edwards

However, he declared he would not accept money from property developers within the City of Melbourne or from the gaming and tobacco industries.

“I have declared myself a candidate for Lord Mayor in the upcoming election, and one of the first things I did … I have declared I will not accept donations from property developers in the City of Melbourne,” Mr Reece said in August.

“I will not accept tobacco industry donations and I will not accept gambling industry donations either.

“That is a self-imposed rule that I took to the 2020 election and I intend to do the same thing again.”

Zagame Automotive has showrooms for luxury car brands, including Ferrari and Lamborghini, across the city and interstate.

The Zagame family is one of the wealthiest in Melbourne, having first made their fortune through late patriarch Victor Zagame’s chain of sprawling pokies venues.

Along with the Zagame Automotive Group, other businesses linked to the family include restaurants, hotels and one remaining Zagame’s chain pokie venue in Caulfield.