[COM] Festival Plaza Tower 1 | 115m | 27 Levels | Office

[Norman]

I would like to see more information about the material used for the tower and the plaza surface. Other than that it's looking pretty good, hopefully the workers and restaurants will provide a good amount of activity on the plaza, and not just during business hours.

[Algernon]

Am I the only one thinking where the hell did Walker want to put the second tower?

[Joelmark]

I think maybe it's not clear as to who will pay for and operate what in this project.

From what I can tell, Walker Corp. will own and operate the office tower, the car park and the retail building. The State Government will own and operate the plaza space (which is why they will essentially be paying for all of it and have had such a big say in the design). The new space will be open and publicly accessible at all times, like the old plaza.

The State Government has previously funded the Northern Promenade works by Elder Park and is also funding the current Station Lane works between the railway station and old Parliament.

Looking at the previous posts on here from the last day, I'm surprised that no one would know that the 27 floor tower was imminent - it's been in all the plans and detailed pictures since early 2016.

The debate over whether we should have been building a more cultural structure should probably have occurred in 2013-14, not April 2020.

[SRW]

From what I can tell, Walker Corp. will own and operate the office tower, the car park and the retail building. The State Government will own and operate the plaza space (which is why they will essentially be paying for all of it and have had such a big say in the design). The new space will be open and publicly accessible at all times, like the old plaza.

I think most are aware of this, and it's precisely the problem. Why is Walker getting to build on public land without paying the cost of that land? This really gets to the heart of the problem many have with parklands developments -- public land is not free land. It has intrinsic value and a cost.

As far as I can tell, the only real payment we receive from Walker for building on public land is that the Festival Centre will earn income from its share of car parks. But it already had this revenue stream from the previous car park, so this is substitution not additional, and the land is still essentially gifted. That's not good enough.

So, again, what gives Walker Corp such leverage over the government? The exclusive development rights were awarded in 2012 and we're still no closer to knowing the terms. Given it's coming up on a decade, do they expire? The government may as well go it alone.

The debate over whether we should have been building a more cultural structure should probably have occurred in 2013-14, not April 2020.

The debate did occur and has continued, but the public was never involved in the development consultation (it went straight to cabinet). From memory, the public only had input into the riverbank masterplan which the government promptly ignored except for the footbridge.

[Bob]

The problem with that section of parklands is the Government alienated it soon after the city plan was completed in 1837 - 380 acres of it was conveyed to the government for use of buildings or for any purpose it saw fit.

This is why the section between North terrace and the River Torrens from the east to the west of the city centre have always been treated 'differently' when its comes to 'development', always at the 'discretion' of the government of the day.

This section has not been 'public parklands' in the true sense ever since.

[SRW]

The problem with that section of parklands is the Government alienated it soon after the city plan was completed in 1837 - 380 acres of it was conveyed to the government for use of buildings or for any purpose it saw fit.

This is why the section between North terrace and the River Torrens from the east to the west of the city centre have always been treated 'differently' when its comes to 'development', always at the 'discretion' of the government of the day.

This section has not been 'public parklands' in the true sense ever since.

Whether you see it as parklands or not doesn’t matter. It’s still public land and it shouldn’t be given away for free.

[claybro]

The problem with that section of parklands is the Government alienated it soon after the city plan was completed in 1837 - 380 acres of it was conveyed to the government for use of buildings or for any purpose it saw fit.

This is why the section between North terrace and the River Torrens from the east to the west of the city centre have always been treated 'differently' when its comes to 'development', always at the 'discretion' of the government of the day.

This section has not been 'public parklands' in the true sense ever since.

Finally someone points out the obvious. It has always been a mystery to me why people harp on about "the parklands" relating to anything outside the terraces, when clearly the North Terrace section has had buildings on it for over 150 years. just changing the form or function of those buildings does not alter the fact this area has never been a public park.

[how good is he]

I guess the proof will be in the pudding on how it all turns out. Just looking at the renders it looks like a hotch-potch of ideas/buildings highlighting the multiple stakeholders all in close vicinity and each with their own agenda.
Something really needs to be done on the Intercontinental building which will stick out like a sore thumb even more once this is complete. If the owners aren't going to pay for say new cladding etc not sure what can be done unless the Govt/taxpayers foot the bill.

[SRW]

The problem with that section of parklands is the Government alienated it soon after the city plan was completed in 1837 - 380 acres of it was conveyed to the government for use of buildings or for any purpose it saw fit.

This is why the section between North terrace and the River Torrens from the east to the west of the city centre have always been treated 'differently' when its comes to 'development', always at the 'discretion' of the government of the day.

This section has not been 'public parklands' in the true sense ever since.

Finally someone points out the obvious. It has always been a mystery to me why people harp on about "the parklands" relating to anything outside the terraces, when clearly the North Terrace section has had buildings on it for over 150 years. just changing the form or function of those buildings does not alter the fact this area has never been a public park.

That's really not my point. I'm not denying that this area is already alienated from parklands. And I'm not even saying public land shouldn't be built on if there's a reasonable public benefit. My point is private developers shouldn't be allowed to build on public land for no cost. We own it, we should get something for it. What do you think this land would cost on the open market? How much rent will they earn from this premium location over the life of the leasehold? For these exclusive rights, they should at least be paying for the plaza. Otherwise, the government may as well develop the site itself and retain the benefits.

[how good is he]

I am pretty sure all the land remains Govt land and is a leasehold situation. The rent may be $1 for 99 years but potentially anything built on it could revert back to the Govt/the taxpayers for free at the end of what is essentially a land lease. The other point is that banks/financiers won't easily lend the hundreds of millions/billions needed without a property title as security. So I am wondering if Walker was basically asked by the Govt as one of the few developers who would have been able to finance a billion dollar leasehold development?

[SRW]

I am pretty sure all the land remains Govt land and is a leasehold situation. The rent may be $1 for 99 years but potentially anything built on it could revert back to the Govt/the taxpayers for free at the end of what is essentially a land lease. The other point is that banks/financiers won't easily lend the hundreds of millions/billions needed without a property title as security. So I am wondering if Walker was basically asked by the Govt as one of the few developers who would have been able to finance a billion dollar leasehold development?

Yes, it's leasehold. It would require an act of parliament to make freehold. But at 99 years (usually. and presumably with an option), it's surely functionally indistinguishable in terms of financing? In which case, if a developer on the other side of North Terrace has to pay for a plot before developing it, why should Walker not have to make a reasonable funding contribution to the public plaza commensurate to the value of the land on which they're building.

[Nort]

[*]I struggle to see what the retail/commerce building contributes to the plaza over & above what's already in the area (there's a bunch of restaurants at the casino or promenade already).

I'd guess the idea is to try and get something similar to South Bank, where you have so many bars and restaurants that the area itself becomes a destination.

[how good is he]

SRW, lets say Walker went broke etc and the banks lent millions/billions of dollars against it they would have nothing to take and would loose. I would say the banks/financiers would have wanted security against enough other assets with enough equity to cover this deal ie. if the banks say lent Walker $600m for this and they can't take any security over this property they would want $1 billion in other freehold property or equity as security, based on the say the 60% lend the banks require for commercial.

[SRW]

SRW, lets say Walker went broke etc and the banks lent millions/billions of dollars against it they would have nothing to take and would loose. I would say the banks/financiers would have wanted security against enough other assets with enough equity to cover this deal ie. if the banks say lent Walker say $600m for this and they can't take any security over this property they would want $1 billion in other freehold property or equity as security, based on the say the 60% lend the banks require for commercial.

I conceed financing is outside my field, but I don't understand how the banks wouldn't have security over this property? The leasehold can be exchanged between parties, the same as the Intercontinental building has changed hands since the '80s? But even supposing that Walker Corp is so behemoth that it's one of few with other assets to secure against, that doesn't really change the fundamental proposition of earning value from public land for nearly nought. Yes, the land and its value will return to the public at some distant point. But private interests will profit for that duration with no or only minimal upfront payment for the privilege. I think the state should have driven a harder bargain.

[Patrick_27]

And right here, we have the reason that public consultation exists. This is a decision made by a few hundred bureaucrat in the interests of this state and yet most people in this state stand to benefit nothing from this whole proposal; worse yet, when if it's proven to be a dud, the government can't exactly go back to the drawing board. Why would you offer a heap of new cafes and restaurants in an area that has nothing to entice people there? The Festival Centre has a full annual programme, but there is already plenty of nearby restaurants and eateries providing for those punters. Sure, it could be argued that the office tower will fill these establishments in time, but if they're looking to attract upper market restaurants to this area, what worker goes for a gourmet eat on their lunch break? If it ends up that we get subpar restaurants and cafes in this area, how does this achieve what anyone had in mind for the area? Furthermore, how does this distinguish the area from any other hospitality district in the CBD.