Conflicting valuations over Rosehill's value as a potential redevelopment hub for a major Sydney housing project have emerged during an inquiry into the proposed sale of the western Sydney racetrack.
A NSW parliamentary hearing has been told that the Australian Turf Club-owned land could be worth as much as $23 billion over the next three decades.
However, if the 60-hectare property is put on the market within the next 12 months, it would unlikely sell for more than $1.6 billion, the Australian Turf Club itself confirmed.
They were just two scenarios presented to the upper house Select Committee on Friday, as a cast of NSW racing industry heavyweights gave evidence during the second day of the hearing.
Either way, they created an intriguing subplot after Premier Chris Minns and ATC chairman Peter McGauran flagged a potential $5 billion return during a joint press conference late last year to announce the proposed sale.
The proposal would pave the way for 25,000 new homes to be built in western Sydney.
McGauran confirmed during the second day of a select committee meeting hearing that the western Sydney’s racecourse's current unimproved value was $1.6 billion, well short of the $5 billion trumpeted.
The hearing was later told that was the only figure that has so far been presented to the ATC board.
“The best advice we’ve had if you wanted to sell Rosehill Gardens as in no rezoning, walk in, walk out (is) $1.6 billion,” McGauran said.
“And of course that’s a paltry return for the loss of a premium racetrack.
“We wouldn’t even let that bid through the door.”
McGauran and ATC corporate affairs director Steve McMahon maintained a $5 billion valuation was realistic because a rezoned site for housing redevelopment would also include the construction of a Metro West train station.
The inquiry also heard that a Metro West could be delayed until at least 2035 and that could compromise Rosehill’s value.
Bren O’Brien
Asked if the possible extension on Metro West delivery would still make the Rosehill sale worthwhile, McGauran replied: “It’s a long-term project, always was from the outset.
“Racing at Rosehill would have continued between five and seven years, anyway.”
The debate over the project's valuation came as two ATC directors said they were concerned about the unsolicited proposal process of a potential Rosehill deal.
Board members Caroline Searcy and Timothy Hale told the inquiry they doubted the ATC membership would vote in favour of selling Rosehill.
Searcy said the board had not received enough information from senior ATC management to make an informed decision on Rosehill’s future.
“I think at the moment, certainly we don’t have the detail to give members as yet which is very frustrating,” she said.
“From a board’s point of view, perhaps it’s not the best governance.
“Right from the outset, my view is it’s going to be a very hard thing to have happen, and as I said I’m pretty sceptical about it.”
Bren O’Brien
Hale, a property law barrister, said he found it hard to appreciate that the Rosehill announcement had a $5 billion headline.
“In my professional capacities, I understand valuation and I have a great deal of difficulty in accepting that. And I have never accepted the figure of $5 billion,” the ATC vice chair said.
However, Racing NSW board member Garry Charny believes Rosehill has been grossly undervalued despite agreeing that an immediate sale would generate $1.6 billion.
“There are a lot of contingencies in this debate but the $5 billion is completely wrong, completely wrong,” he said.
“If you do a 30-year development with a developer with what I would call on normal terms, taking some development risk, the value of this development is closer to $20 billion to the ATC.
“And that number hasn’t come out (and) I don’t know why.”
Warwick Barr
Later Racing NSW chief executive Peter V’landys claimed the regulator had received advice that Rosehill could fetch as much as $23 billion.
He said he would provide that full valuation to the committee.
McGauran had earlier told the inquiry that the ATC was facing financial difficulties, saying it is “looking at a challenging future” as its distribution from wagering revenue dropped from $90 million in 2023 to $72 million this year, although that was topped up by Racing NSW to $83 million because of existing agreement.
“There are very few businesses that could lose almost $20 million of its revenue of that kind,” he said.
“Large and ongoing investment is required to maintain and continuously improve our racing and training services and our stabling facilities to ensure they’re world-class.
“The ATC does not have a sustainable model to do these things.”
McGauran told the hearing that the ATC owes Racing NSW $113 million in indeterminable loans but only $50 million would have to be repaid to the governing body if a Rosehill sale went ahead.
