Multibillion-dollar hitch casts doubt over the ‘mini-city’ of 25,000 homes

NSW Premier Chris Minns says his government will look closely at paying $5 billion for Rosehill Racecourse to develop a new “mini-city”, despite serious doubts among senior officials at the Australian Turf Club over the land’s value.

The ATC has presented a last-ditch proposal to its members in a bid to convince them to support the sale of the sprawling western Sydney racecourse, which would also salvage the Minns government’s hopes that much-needed housing could be developed on the site.

The new plan, which will go to a vote of 11,000 ATC members on April 3, is a major shift from the potential deal announced by the government with much fanfare in December 2023, under which Rosehill was to be sold to private developers to build 25,000 homes as part of a new mini-city.

Royal Randwick would undergo major renovations, using the proceeds of the sale of Rosehill Racecourse.

However, the ATC’s proposal to sell Rosehill has received significant pushback from some sections of the club’s membership since it was announced, high-profile members such as champion trainers Gai Waterhouse and Chris Waller being publicly opposed to the deal.

It also caused a major schism in the organisation. The Sydney Morning Herald previously revealed the chair, Peter McGauran, and deputy chair, Tim Hale, were at odds over the sale and the two have publicly traded barbs.

A key issue has been the true value of the land and the likely windfall for the ATC members.

McGauran has repeatedly said that the ATC received advice valuing the land at $5 billion.

That advice, by consultancy HillPDA, has not been publicly released, and Hale has disputed the figure. Hale told a parliamentary inquiry the valuation was closer to $1.6 billion and it would take about 28 years to recoup the $5 billion price tag.

The initial proposal was for the ATC to sell its land to a private developer while the government built a new metro station at Rosehill on the Metro West line. The cost of building the new station has been estimated at $1.5 to $2.2 billion and the government said the extra stop was contingent on the redevelopment of the Rosehill site.

A senior racing source who wished to remain anonymous to speak freely said the government developing the racecourse would allow it “much greater control” and ensure “a greater amount of affordable housing, especially for essential workers”.

The proceeds of the sale would go to major upgrades of Royal Randwick, Canterbury Park and Warwick Farm. The ATC would replace Rosehill Gardens with a new Group 1 quality racecourse.

The offices of the premier and Treasurer Daniel Mookhey were asked whether they had met the ATC about its revised plan before members were notified of the significant change in direction. Mookhey’s office did not respond.

A spokesperson for the premier said: “Ultimately, it’s a matter for the members of the ATC whether to proceed with the proposal. NSW has an unsolicited proposals process so the public service can assess, at arm’s length from government.”

Minns told ABC radio on Thursday morning he would “certainly look at it [the new proposal] very closely”.

“It is a once-in-a-generation opportunity to put housing in between the two big job and commercial centres … Parramatta in the west and the Sydney CBD in the east,” Minns said.

The boardroom divide within the ATC has remained even as negotiations with the government have progressed. It was notable, according to several sources not authorised to speak publicly, that the resolution sent to ATC members on Wednesday night did not include a board endorsement.

But the questions over the sale price took on increased significance after the ATC said it now wanted the government to purchase the course.

In a message to ATC members on Wednesday night, it said seeking a direct sale of “no less than $5 billion” to the government had the benefit of “eliminating development risk” for the organisation.

It would ensure the ATC received “the full financial benefit within a 15-year period”.

At a press conference unveiling the opportunity in December 2023, Minns said the sale of Rosehill would cost taxpayers nothing.

“Zero. Nothing. ATC owns this, they’ll be rezoning it, and they’ll be developing it themselves,” he said.

If the government were to meet the ATC’s $5 billion price, the overall cost of the project to taxpayers would probably be more.

Documents seen by the Herald, for example, show Sydney Water has flagged that development of the size envisioned at Rosehill would require investments in infrastructure.

The documents, part of a briefing given to government officials in December, state the proposal would bring about a 60 per cent increase in demand for drinking water and a 25 per cent increase for waste water.

The cost of a metro station at Rosehill is also likely to be more than first flagged.

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