Hemmes family seeks $19 million from Sydney Metro in court fight

The family company of hospitality mogul Justin Hemmes has taken Sydney Metro to court seeking $19 million in compensation, arguing land acquisitions for a new CBD station development will reduce the value of its Ivy entertainment precinct next door.

The legal move comes as the Hemmes’ company competes for a tender from the government-owned Sydney Metro to develop the Hunter Street station and two massive towers above its entrances.

The Hemmes family company says the value of its Ivy entertainment precinct has been reduced by the loss of several easements, or access rights. Credit: Dominic Lorrimer

The claim was filed in the NSW Land and Environment Court by Hemmes Hermitage Pty Ltd, which is owned and controlled by the 52-year-old Hemmes, his sister Bettina and their mother Merivale, the namesake of the family’s $1.4 billion hospitality empire.

The company owns 320 and 330 George Street, a precinct that includes “Sydney’s ultimate party destination”, the Ivy nightclub, as well as a range of restaurants such as Bar Totti’s and Jimmy’s Falafel.

Sydney Metro last year compulsorily acquired several lots of land owned by Hemmes Hermitage on George and Hunter streets for the new station, which will form one end of the $25 billion, 24-kilometre Metro West route to Parramatta.

The Ivy precinct’s George Street entrance. Credit: Brook Mitchell

Hemmes Hermitage argues that it lost several easements, or access rights, in the acquisition. One easement, it said, while currently not used, would allow for business parking and access by vehicles working on a future development, while another bundle of easements included fire exit rights.

The claim states the George Street land had been the subject of “Ivy 2.0” development proposals since 2015, and that “the highest and best use” was through the development of a 50,000-square-metre mixed-use commercial, hotel and hospitality venue.

The loss of the easements took the land’s value from $525 million to $506 million after, the company said.

Sydney Metro in its defence said the access rights had no practical benefit and the development potential of the site remained the same.

Towers are set to be built above the eastern and western entrances of the Hunter Street Metro station.Credit: City of Sydney

It argued against the compensation claim, noting the Metro station development may improve the value of the George Street properties.

In 2022, Sydney Metro announced a consortium including Hemmes Hermitage and the developers Mirvac and Lendlease was one of two groups shortlisted to develop the Hunter Street station and two buildings above it.

Artist’s impression of development above the Sydney Metro West Hunter Street station. Credit: Sydney Metro

In April, the state government released concept plans for two skyscrapers – a 58-storey tower above the Metro station’s eastern entrance, between O’Connell and Bligh streets, and a 51-storey building above the western entrance, on the corner of George and Hunter streets.

The successful tenderer for the “world-class precinct” was expected to be announced next year, a Sydney Metro spokesperson told the Herald.

“Final plans for the area are subject to ongoing engagement with industry and key stakeholders,” the spokesperson said.

“Land and Environment Court proceedings relating to acquisitions are a separate matter, and will be dealt with by the court in accordance with Just Terms Act.”

A spokesperson for the Hemmes family said they were precluded from commenting on the tender process and that the court case was proceeding “per the usual course of such matters”.

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