By Carla Jaeger
A series of legal battles between two property developers and the state government has put the future of a new community hospital in doubt and turned a shopping centre into a ghost town.
Residents in Melbourne’s south-east are despairing over further delays to the construction of the Pakenham community hospital, as the Allan government prepares for a second court stoush over the site in a bid to keep a lid on a multimillion-dollar compensation payout.
The old Woolworths building in Pakenham has become the subject of a years-long battle between property developers and the state government.Credit: Joe Armao
The Pakenham community hospital was one of the 10 local hospitals promised on the eve of the 2018 election campaign as part of a $675 million investment designed to take pressure off major hospitals and provide non-critical healthcare in growing areas.
But despite a pledge that the hospital would be completed by the end of this year, construction has not started. The government is adamant its new completion date of 2026 will be met.
The delay is largely the result of a stoush over the proposed site for the hospital – the old Woolworths building in the Pakenham Place shopping centre on Main Street.
The government used its compulsory acquisition powers in 2021 to claim the site, which was selected by the Victorian Health Building Authority for its proximity to Pakenham station and walking distance to the town centre.
The then-Andrews government announced the old Woolworths building as the site for the hospital in 2021.
Developers Banco Group and Leaf Corporation co-purchased the Pakenham Place shopping centre in 2020. Two years later, they unsuccessfully fought the acquisition via the Supreme Court.
Now, the parties are back at the same court – this time fighting over the compensation the developers should receive for handing over the land.
Documents tendered to the Supreme Court last week reveal the developers rejected the government’s $8 million compensation offer in June 2023, then rejected a renegotiated offer of $12 million in December.
They are instead demanding double that, claiming the market value of the land is $24 million.
Both the state government and Banco Group director Mario Lo Giudice declined to comment as the matter is before the court.
Emma Screeche-Powell, who lives just a few minutes’ drive from the proposed hospital, said she suffered a severe asthma attack in July.
With an hour-long wait for an ambulance and serious concerns about driving herself 20 minutes to the nearest hospital in Casey, she began fearing for her life.
Screeche-Powell, 35, said that if the hospital had been built she would have been able to drive herself or call an Uber.
“My sister had to drive from Endeavour Hills to pick me up and then take me to Casey hospital. I’m lucky to be alive, and to have my sister to take me,” said Screeche-Powell, who works at a regional hospital.
She said she had to wait five hours in a packed emergency room before she was seen by a doctor.
Liberal MP Renee Heath said the construction delays had put the “whole project at risk”.
“My office receives daily complaints from people who are suffering because existing hospitals in the south-east are at capacity,” she said.
The government has faced criticism over long delays for the other nine hospitals in the $675 million election promise.
In 2022, when The Age revealed that none of the 10 community hospitals had been built or upgraded, a government spokesperson said it had “made a commitment to deliver all 10 hospitals by the end of 2024”. Just four of the 10 sites are now slated to be completed by the end of the year.
The legal stoush has also left Banco-Leaf’s redevelopment plans for the shopping centre in limbo. The Pakenham Place website claims it is “about to undergo major refurbishment”.Many shops have been forced to relocate; locals describe it as an eyesore of empty shops and abandoned construction areas full of graffiti.
Screeche-Powell said she no longer shopped there as it felt unsafe.
An artist’s impression of the new Pakenham Place.
An employee of one of the remaining stores at the shopping centre, who asked not to be named to protect their privacy, said sales had dropped dramatically.
“It’s really starting to effect some of the team members as they fear the store will be closed down,” they said.
David Farrelly, a former Liberal candidate for Pakenham, said it had negatively impacted neighbouring businesses.
“It’s been a ghost town but for the vandals, taggers, rubbish dumping and the occasional fire,” he said.
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