Sydney Metro says it would pay $91m for this land. Justin Hemmes wants more than double that

Hospitality giant Justin Hemmes is locked in a $124 million dispute with Sydney Metro over the value of land acquired by the agency to build a new metro station in the middle of the city.

The Merivale chief executive’s family company, Hemmes Hermitage Pty Ltd, purchased two properties opposite Wynyard Station for $77 million in 2018.

The company said 312 and 314-318 George Street would have formed part of the site for “Ivy 2.0”, an extension of the Merivale entertainment and restaurant precinct next door.

Sydney Metro put a halt to those plans in 2022 when it compulsorily acquired the properties for the nearby Hunter Street station on its new Metro West line to Westmead, due to open in 2032.

Hemmes Hermitage last year launched legal action in the Land and Environment Court, and in June it submitted that the land was worth double what the transport agency was willing to pay.

The litigation continues while a consortium involving Hemmes remains in the running to build two skyscrapers above the station entrances, in a project worth more than $6 billion.

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

Sydney Metro’s lawyers said in court filings earlier this year that the land had a market value of $91 million, revising down an earlier offer of $102 million for the land based on workings by the state Valuer General.

Hemmes’ company, however, said the land was worth $215 million. That figure would represent a 177 per cent increase in value in less than four years.

The litigation dwarfs another lawsuit, reported by the Herald in September, in which Hemmes Hermitage is suing Sydney Metro for $19 million in compensation over access rights near the Ivy precinct.

The company said the two George Street properties were most valuable as part of a future “mixed-use commercial, hotel and hospitality venue”.

But those “various theoretical redevelopment schemes” were not “well-developed or advanced” at the time the land was acquired, Sydney Metro’s lawyers said.

They also said the Hemmes valuation was overstated because a City of Sydney-owned laneway would have prevented the development of the George Street properties into a single structure.

The government is required to pay reasonable legal costs associated with compulsory land acquisitions. However, Sydney Metro says the $498,000 Hemmes Hermitage spent on legal fees up to June was unreasonable.

Asked about the court case, a spokesperson for Hemmes Hermitage said there was “nothing to say, other than it is proceeding per the usual course of such matters”.

The spokesperson said the company was also unable to discuss its bid to develop the Hunter Street precinct, which would involve the construction of two skyscrapers, 51 and 58 storeys high.

A Sydney Metro spokesperson said: “Owners who disagree with the Valuer General’s determination are able to appeal to the Land and Environment Court.”

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