Sunday, September 2, 2012

Legacy of the Sydney Metro Line Land Grab


THE defunct Sydney Metro is still sitting on a $100 million property empire, with at least two office towers about to be demolished more than two years after the former Labor government pulled the pin on the project.
 
In late 2009 the department behind the short-lived Rozelle-to-city Metro line snapped up $124 million worth of property along the proposed route, including several CBD office blocks, and spent hundreds of thousands of dollars more to turf tenants out of some of the buildings.

In February the following year premier Kristina Keneally killed off the project, which by that stage had already cost the taxpayers $356 million.

However, instead of selling off the property portfolio - or at least releasing the properties to earn some much-needed income - the department has held on to the buildings, and two of them are about to be demolished.

Property records reveal Sydney Metro still owns at least seven buildings it bought during the spending spree; some of those are just standing empty.
The biggest single purchase, the $45 million building at 8 Castlereagh St, has since been relet. Two adjacent 11-storey office blocks in Clarence St, above Wynyard Station in the city - which cost taxpayers a whopping $39 million - have sat almost entirely vacant for the past 2 1/2 years.

At 30 Clarence St, just the ground floor retail space remains occupied after the former government spent more than $500,000 in compensation to tenants to end their leases.

Next door at No. 36 the last of the tenants moved out in July after the 10 other floors sat empty for months.

Both buildings are now set to be demolished to make way for the Wynyard Walk, an underground passage linking the station to Barangaroo.

In late 2010 Ms Keneally announced the $300 million Walk as an alternative link to Barangaroo after the Metro axing left the $6 billion redevelopment with limited public transport.

CBRE leasing agent Tim Molchanoff said similar B- and C-grade buildings rented for upwards of $520 a square metre, meaning the government had also missed out on $3.4 million in rent.
A spokesman for Transport for NSW said all the other buildings were leased.

"These seven properties were acquired by Sydney Metro and all are now owned and managed by Transport for NSW,"