Race club takes property giant to court over $70 million land deal

The race club at the centre of the failed Rosehill sell-off for housing is embroiled in a legal dispute with Mirvac over a $70 million deal to build apartments on land next to Canterbury Park Racecourse.

Just weeks after its members voted down the $5 billion proposed sale of the western Sydney track, it has emerged that the Australian Turf Club has raced to the NSW Supreme Court to prevent another development plan from falling over.

An overhead view of the rezoned land (left) next to Canterbury Park Racecourse.Credit: Brook Mitchell

The club, which also owns Randwick, Rosehill and Warwick Farm racecourses, has launched proceedings against Mirvac after the property giant sought to tear up a 2017 partnership to develop a block adjacent to Canterbury Park.

Mirvac also wants repayment of an $8 million access fee from the cash-strapped ATC, which stands to net as much as $70 million from the full sale of the grassy site.

After years of local political resistance and opposition from community groups, the 1.28 hectare parcel was rezoned for high-density residential use six weeks ago as part of the Minns government’s push to address the state’s housing shortage.

It paves the way for the project of about 200 units to proceed, eight years after it was conceived. But a pre-existing stipulation requiring the land to be available as an overflow car park for night racing meetings remains in place, presenting a major hurdle for new dwellings going up.

Mirvac partnered with the Australian Turf Club eight years ago.Credit: Bloomberg

That long-standing condition imposed by Canterbury-Bankstown City Council was a trigger for Mirvac to pull out and demand its money back, according to court documents.

The race club’s case against the $8 billion company, which started last year, is that its grounds for termination are invalid. The matter is due back in court next Friday.

ATC chief executive Matt Galanos said the club was “hoping that common sense can prevail” so it could salvage the development.

“It makes no sense for land to be rezoned for housing if it then has to be set aside for a car park for night racing,” he said.

“We’re obviously wanting to resolve that so we can keep the development going. Hopefully, Mirvac will want to be a part of that.”

Canterbury Park attracts crowds of up to 6000 to its Friday night meetings and, the club said, the racecourse’s in-field and other parking provides more than enough space without the King Street plot needing to be used.

If the ATC can’t convince local government officials to remove the night racing car park condition, it may have to consider ceasing racing after dark altogether, but that would need approval from Racing NSW and is regarded as a last resort.

“The unfortunate consequence of that, from a racing point of view, is that those racing Friday nights are a really popular family occasion,” Galanos said.

Night racing at Canterbury Park is a popular Friday night attraction.Credit: Getty Images

“Ideally, you’d want to do the development and still want to continue night racing. But when it comes down to what’s in the best interests of the club in the immediate future, that’s the conditions that we’re faced with. It just doesn’t make sense.”

Mirvac declined to comment as the matter is before the court but in court documents argued that its rescinding of the agreement with the ATC was valid. It has filed a cross claim against the club for not repaying the initial $8 million fee.

A spokesperson for Canterbury-Bankstown City Council confirmed the rezoning of the land owned by the ATC had been gazetted by the NSW government on May 30, following a public exhibition of an alternative masterplan the council endorsed late last year.

The land had in place conditions of consent relating to parking, and the ATC would be expected to lodge a new development application if it decided to develop it in future, the spokesperson said.

The rezoning of the block, wedged between King, Princess and James streets, has taken place under the state government’s low- and mid-rise housing policy. The high-density designation allows for apartment buildings of between four and six storeys, depending on their proximity to transport and town centres.

The surplus racecourse land was reclassified despite lobbying from the community Canterbury Racecourse Action Group.

“Sydney needs more housing, yes, but not at the expense of the very limited open space the inner city has to support it,” said Matt Burke, the group’s spokesperson, in a letter to state government ministers.

The ATC has maintained it has no plans to sell Canterbury Park itself, but Burke said group members feared that may be considered following the Rosehill saga.

Meanwhile, ATC chairman Peter McGauran, a former Howard government minister, announced his resignation this week after fronting the defeated Rosehill proposal.

The controversial effort to sell the racecourse split the racing industry but was embraced by Premier Chris Minns as part of the solution to Sydney’s housing crisis.

While McGauran said it would secure the financial future of the race club amid declining revenue from wagering, it was turned down on May 27 when 56 per cent of voting members opted against it.