26/09/2012 - 10:38

Reader Response: Quay policy poor

26/09/2012 - 10:38

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REGARDLESS of all the hype in the media about the Elizabeth Quay development on the Perth waterfront, there is a strong likelihood the project will stall before it gets started. 

There are two fundamental issues giving rise to this outcome. 

Firstly, the project was conceived with a mindset that placed little or no focus on reality, specifically the critical commercial factors.

Secondly, the GFC is about to get a lot worse for a very long time as China realises its vulnerabilities; large-scale speculative property developments in Perth will find funding almost impossible to secure.

The Barnett government has a real dilemma on its hands – how to pull out gracefully before things get a whole lot worse.

Foreshore development has been many years in the making, however. Even as far back as the Carpenter government, the (now) Department of Planning was evolving plans for the Esplanade Reserve to become a development site in keeping with the WA Planning Commission’s endless drive for urban infill.  

The site, however, has significant constructional problems that have been ignored.

It is: “Reclaimed with uncontrolled fill, and the presence of acid sulphate soil and difficult geotechnical conditions which would require significant intervention to enable construction of individual development sites.”

These are the words used by WAPC chairman Gary Prattley in a letter he wrote in February this year to the heritage minister when asked to give reasons why the heritage-protected Florence Hummerston Kiosk could not be retained.

It was well understood that developing the heritage-listed Esplanade Reserve was unlikely to be popular with the public.

Consequently, the Metropolitan Redevelopment Authority was formed with powers to take any public land for its own purposes without consulting the community. 

With this in mind, on February 15 2011, Premier Colin Barnett announced the waterfront project and by so doing placed great faith in the fact that the Department of Planning and the MRA could actually manage and deliver a project of this size and complexity.

Seven days after the project was announced, the WAPC called for public comments about the rezoning of the Esplanade Reserve and eight months later published their report titled ‘Perth Waterfront Report on Submissions’.

The report dismissed every objection on the grounds that “the issues have been, and will continue to be, considered ... in future detailed planning stages”. 

This is an extraordinary confirmation by the WAPC that the waterfront planning was not complete and was only in the preliminary planning stage. 

Not unexpectedly, the most contentious community objections dealt with the redevelopment of the Esplanade Reserve. 

The report responds to these objections as follows: “Whilst the Esplanade Reserve is recognised for its history and contribution to the development of Perth, the space currently generates only sporadic use ... it does give cause to consider how the functions of the land can continue to meet the changing needs and aspirations of the Western Australian community.” 

Records held by the City of Perth show the reserve to be well used year-round, and one wonders how the WAPC arrived at its conclusion. 

In April, Mr Barnett announced a start to the project and commissioned forward works, not including digging the inlet or diverting Riverside Drive. This was a major error.

The government had started this complex project without knowing its full exposure.

Competent private-enterprise developers would never start a project of this size without knowing precisely their risks and returns. 

In September 2012, the MRA released its final design guidelines, once again ignoring most community comments. 

One detail had changed, however, with residential development now effectively only an optional part of the project.

So the main rationale for the WAPC taking the Esplanade Reserve in the first place has suddenly been overturned, because at long last the MRA has finally done some commercial feasibility studies and realised that residential apartments in this project are not feasible.

High-rise buildings are very expensive to build and builders’ margins on these projects, contrary to common thought, are very tight.

There is little room for error and the foundation conditions on this site are fraught with risk, making apartment buildings less appealing to developers. The government also does not understand its target market. 

Over the past few years, apartment pricing has shifted significantly downward; investors and owner-occupiers can now purchase medium-cost apartments in many areas of Perth, leaving the waterfront out of the race.

Without substantial residential development this project is nothing more than another commercial enclave capable of going anywhere in the CBD.

The MRA now puts great hope on securing a hotel developer. 

However hotels too, in the high-rise configuration of the current plan, will be very expensive to build on this site. Hotel experts warn that Perth is seen as a boom-bust city that does not suit the hotel business in the long-term.

There is a market for serviced apartments in Perth, however they must be built economically, which cannot be achieved on this site if the planners stick with their high-rise configuration. 

There is a very good chance the following scenario will play out during the lead up to the next state election.

The media will be in a flurry for months with positive spin about the waterfront project including further references to a possible Chevron tower and expressions of interest to develop a hotel.

It will all be made to look full steam ahead.

Then, the MRA will announce a revised waterfront plan or the premier will announce the prudence of putting the project on hold.

The community will then have every right to confront the perpetrators and the major cheerleaders and ask what in the world they thought they were up to when they destroyed Perth’s premier public park. 

• Dr Linley Lutton is adjunct research fellow, School of Earth and Environment, at the University of Western Australia.


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