Council owned land with an approved residential subdivision will be put to auction, following lengthy debate on whether the organisation has a valid development role.
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Councillors at their meeting on Tuesday erred on the side of caution in deciding to auction the 4.65 hectare block at 49 to 61 Hovell Street, opposite the former Goulburn saleyards. The land, previously dubbed surplus and in part zoned from community to operational, has an approved 29-lot residential subdivision in place. The council approved the development application earlier this year.
They were given the option on Tuesday of council developing the subdivision itself and selling the blocks individually through a real estate agent. An independent valuation concluded the 1000 square metres lots could fetch between $240,000 and $290,000 each, giving a gross of $6.64 million. However development and other costs would reduce the return to $1.7m.
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The alternative was to sell the total area with approval in place but allow a developer to undertake infrastructure such as roads, kerb and guttering, stormwater, footpaths and utilities.
A report stated there were pros and cons with both methods but deputy mayor Peter Walker was worried about financial burden. He argued lower priced lots were still available at established estates like Joseph's Gate and Teneriffe at Marys Mount.
"My concern is that these blocks would be at the lower end because they back on to an industrial area, are close to the transport route and the train line.. Have we shot our figures too high?" he told the meeting.
"...If we get snookered and can only unload half the blocks, the rest will be outstanding.
"...Sooner or later Goulburn's growth will slow and that's where my knees knock."
After the meeting he said the whole idea was to set an example for other residential subdivisions. Large 1000 square metre lots, with 20 metre wide roads, ample landscaping and a covenant preventing dual occupancies were just some elements.
"I support that but in this location I think it's too much of a risk. Let a developer take that on," Cr Walker said.
A report warned that if sales were slow, the council could be left with the holding costs for the subdivision's development.
General manager Warwick Bennett said he and senior staff had grappled with this, and a two-year sunset clause could be imposed as a precaution.
"I think if there were no significant sales within a year we'd be back here considering a different marketing strategy," he said.
But Cr Margaret O'Neill said she was "dead against" the council becoming the developer. She cited other parts of town, including Dalley Street, where it had failed.
"The market at the moment is hot. We have an opportunity for someone to come in from Sydney or Canberra and lap it up. We'd then have money for the pool," she said.
"There are enough developers in Goulburn without us (getting involved too)."
Sale proceeds will be allocated to the aquatic centre redevelopment.
Cr Andrew Banfield said while the council had an opportunity to set a development standard, it could also get "caught out." This had happened at Ducks Lane where the council funded industrial infrastructure upfront, which took years to recoup.
However he was happy to put the total block to auction and "have a second bite of the cherry" if there were no takers.
But selling "as is" also opened the possibility that a buyer could modify the DA, create smaller lots and later utilise exempt and complying development laws to allow dual occupancies, the report stated.
"We suspect that the reason for healthy land sales at Marys Mount is because of the development potential of most lots, that is, the ability for dual occupancies, attached and dwellings," property business manager Ken Wheeldon wrote.
In his report, independent valuer Doug Walker said residential land in Goulburn was becoming scarcer but undeveloped lots remained, including at Eastgrove.
"Median values until now have virtually stagnated since 2017 due to a plentiful supply since that time and a fall off in demand, especially since 2018 and 2019," he stated.
"Despite COVID-19 in 2020, demand improved considerably although this did not flow through to values."
'No competing role'
After the meeting, Mr Bennett told The Post he did not believe the council had a conflict of interest in approving DAs on its own land and being the developer.
"I'm very satisfied with the process," he said.
"We make it very clear that the council has two distinct roles and we keep them separate from meetings. We have a clear regulatory role and a clear asset management role. Councillors had to take their regulatory hats off and put their asset management hats on.
"I'm very confident in the process because it is done transparently and at open meetings. I don't think there can be any criticism of it."
Planning director Scott Martin also said such subdivisions were typically approved by staff but as this was council land, councillors decided the matter.
The council is also subdividing surplus land at its wastewater farm on Taralga and Gorman Roads into residential lots.
Expressions of interest will be called from real estate agents to sell the land. Councillors will set a reserve price in closed session.
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