Talking Point: What is the purpose of Kangaroo Bay China mission?

TONY MULDER: Chambroad is not the first to hit a hurdle at Kangaroo Bay, and Government must rule out sweeteners

TROUBLED: View from Kangaroo Bay. Picture: RICHARD JUPE

I AM fully supportive of a commercially feasible and appropriate development in Kangaroo Bay.

However, Chambroad Overseas Investment Australia is not the first company to discover that operating an international hotel at Kangaroo Bay is commercially problematic.

In the early 2000s, Accor International Hotels had a five-year option to build and operate a three-storey hotel as part of the original precinct plan.

Nothing emerged and the option was not renewed.

It took another decade for anyone to show interest and this involved the sale of public land to heady Chinese investors and the subsequent five-storey proposal.

After two years, little progress has been made and Mayor Doug Chipman is off to China on a “rescue mission”.

The current situation is complicated by changes in Chinese Overseas Investment Policy.

In 2018, investment in Australia fell nearly 37 per cent according to the “De-Mystifying Chinese Investment in Australia” Report (KPMG-Sydney University, August, 2018).

The report also reveals that real estate and hotel investments, like that proposed for Kangaroo Bay, are now “Restricted” as China seeks to stem the outflow of capital in order to revive its flagging domestic growth.

In this climate it is hardly surprising that the Kangaroo Bay proposal has stalled.

According to the May 6 Council Report, the project has stalled, “pending finalisation of negotiations between Chambroad, the State Government and an educational provider in relation to the operation or development of the Hospitality Training School”.

Mayor Chipman has described as untrue my concerns that Tasmania’s Drysdale House hospitality school could be relocated to Kangaroo Bay, freeing up a highly valuable inner-city site to be sold off by the State Government in exchange for propping up the Kangaroo Bay project.

It is also unclear which international chain would operate the hotel.

The initial low-cost earthworks, like Gunns’ failed pulp mill, constitutes “substantial commencement” and could keep the planning permit alive for at least four years.

To my knowledge, the actual Building Application has yet to be submitted.

Mayor Chipman first announced a rescue mission. After negative media reaction, he briefed the council on the contract before announcing an ultimatum to buy the land back unless construction commenced within six months.

Because I did not attend that briefing, I am not privy to the contractual arrangements. Neither am I at risk of breaching confidence and can continue to make public comment and ask the hard questions.

Having issued the demand, what is the purpose of the trip to China unless it is to add some “sweeteners” to restart the project?

To its credit, this State Government insists that developments should be funded by the private sector, not the public purse.

I call on Tasmanian Treasurer Peter Gutwein to rule out any financial support or comfort to this commercially unsustainable overdevelopment. Just as he did for the Mt Wellington cable car project.

Tony Mulder is a councillor with Clarence City Council.