The Australian Turf Club board appears to be split on the overall valuation of the Rosehill proposal, with vice chairman Tim Hale conceding that the project would be currently worth $1.6 billion, including rezoning and the building of a Metro station.
Hale, replying in writing to supplementary questions put forward by the parliamentary committee looking into the Rosehill proposal, was asked what concerns he holds about the much-publicised valuation of $5 billion, having told the hearing in August that he had never accepted that figure.
The vice-chairman, who is a respected property lawyer, said a HillPDA valuation was presented to the ATC board in April, which placed the Rosehill project value at $1.6 billion. He said that valuation was “entirely consistent with my approach to the valuation of the land”.
“On the assumption of the Metro Station, the rezoning of the Rosehill racecourse for 25,000 dwellings and the construction and sale of those dwellings over 43 years, the HillPDA valuation concluded that the net present value of the land is $1.6 billion,” Hale said.
“It also concluded that the receipt of sale proceeds amounting to $5 billion would not take place until 2052, that is 28 years’ time.”
Hale’s submission is significant as it puts him in conflict with what ATC chairman McGauran told the Rosehill inquiry last month.
“The best advice we've had, if you wanted to sell Rosehill Gardens as is, no rezoning, walk-in, walk-out, $1.6 billion - not $2 billion. And of course that is a paltry return for the loss of a premium racetrack. We wouldn't even let that bid through the door,” McGauran said.
Pressed by Independent MP Mark Latham on when the project will be worth $5 billion, McGauran replied: “I’m yet to find any valuer or large-scale experienced property developer who disagrees with $5 billion.
“The challenge for us is how to capture that. It's such a big project, how long would a developer take a risk for? Because you build 800 dwellings a day. So, I agree with you, we do have to have an answer to that question, and we do have a very significant firm of valuers looking at it.”
The $5 billion valuation was first mooted when McGauran and Premier Chris Minns publicly announced the idea in December.
Bren O’Brien
McGauran did say at the inquiry that due diligence and valuation were still being completed.
Racing NSW chief executive Peter V’landys said at the inquiry that the potential valuation of Rosehill was actually $23 billion but has not yet provided documentation as to that.
“What I have just provided to you is from our expert that is doing the due diligence,” V’landys told the inquiry. “It's a confidential document, but, again, we can provide it if necessary.”
Warwick Barr
The ATC has always insisted that once due diligence and valuations are finalised, it will take that information to its members for a vote.
But the board’s inability to agree on an evaluation raises questions about the feasibility of the Rosehill project.
Answering a query as to his statement in his in-person testimony in August that he believed “a substantial majority of members will vote against this proposal when it comes to the members, as it stands”, Hale said there was still significant work to be done before anything could be presented to members.
“The members will need to decide in the evidence and information before them whether the net benefits that will accrue to the ATC and its members, taking into account the inherent risks of the proposal, will outweigh the loss of Rosehill Gardens racecourse,” he said.
