$9M ASF PAY OFF
TAXPAYERS coughed up $9.1 million for the State Government to shake hands with rejected casino developer ASF Group, it can be revealed. The compensation payout adds to the $4 million Labor previously spent on the failed integrated resort bid at The Spit. However, the city may not have seen the last of ASF’s resort proposal, with the Government last night offering the Chinabacked company a shortcut in its new casino licensing process, expected to start for the Gold Coast this year.
TAXPAYERS have paid a $9.08 million cash settlement to rejected casino developer ASF Group over the failed $3 billion integrated resort bid at the Gold Coast Spit.
The payout, revealed in the listed company’s public financial statements, means taxpayers have forked out more than $13 million for the failed exercise since Labor took Government in 2015.
Premier Annastacia Palaszczuk announced in August that her Government had terminated the process and ruled out allowing any developments above three storeys on The Spit at Main Beach.
ASF was forced to write down $12.085 million in costs after spending more than three years developing and adjusting their plans after the former government called for expressions of interest to build an integrated resort.
However, the city may not have seen the last of ASF’s resort proposal, with the Government offering the Chinabacked company a shortcut in its new casino licensing process.
A statement from the Government said the ASF settlement was commercial in confidence. “Some reasonable costs incurred during the procurement process have been reimbursed by the Department of State Development,” it said.
The Gold Coast battering was the major contributor to ASF’s overall losses of $19.53 million last financial year and followed a $15.25 million loss the previous year.
The termination of The Spit project came a fortnight before it lost a $9 billion bid to develop a 10ha site at London’s Royal Docks.
Director David Fang could not confirm whether the company’s two other major Gold Coast developments, The Au towers at Southport and Surfers Paradise, would be going ahead at all.
“We have to carefully assess the market. At the moment it is a bit uncertain,” he said. “The project in Southport is a (lower-priced) market and the Surfers Paradise project is a more exclusive, ultra-luxury product.
“The investor market in that lower market is very quiet at the moment, but the higher end still has opportunities. We just have to see what happens.”
The $70 million The Au Surfers Paradise is being developed by Paradise Development Holding, which is incorporated in the Virgin Islands. Mr Fang is a director.
ASF gained development approval for The Au Southport in 2016. According to the financial statement, the company sees the payout of The Spit project as “conclusion of the procurement process for the Gold Coast IRD”.
“Obviously, this is not our ideal outcome, it’s just a reimbursement of some of our costs — obviously it didn’t cover all of our costs, just a small portion,” Mr Fang said.
“We’re doing OK but obviously on the smaller scale — the IRD would have made a big difference. We’re just trying to finalise what we have in our hands.”
The State Government has changed the name of its Integrated Resort Development process to Global Tourism Hubs, and shifted it from the State Development department to Tourism.
Registrations of interest to develop a global tourism hub in Cairns, which would include a casino licence, closed on January 23.
Tourism Industry Development Minister Kate Jones said ASF would get a shortcut to the expressions of interest phase once a new Gold Coast process began later this year.
“We plan to test the market this year on a proposal for a Gold Coast integrated resort – a new casino licence for the Gold Coast is an important part of this proposal. ASF will be invited to move directly to the expressions of interest phase,” she said.
“This is about developing infrastructure that will create jobs for Gold Coasters. But it’s important we protect the natural assets that make the Gold Coast one of the most attractive tourism destinations on the globe.
“It’s quite clear there’s plenty of business confidence in Queensland for prospective investors.”
WHEN condensed to a neat timeline, ASF’s five-year involvement with the Gold Coast is truly cringe-worthy.
The company was invited by the Queensland Government to present their ideas for development of a casino, resort and cruise ship terminal on the Gold Coast.
They designed and submitted plans, which the Government appeared to like.
The goalposts changed, so they redesigned and submitted their plans again.
The location changed, so they redesigned and submitted their plans again.
The government changed, so they redesigned and submitted their plans again.
The location changed again, so they redesigned and submitted their plans again.
They waited eight months for the Government to make a decision, only to be told their time and money had been spent in vain.
This embarrassing series of events would never be accepted in private business — people would simply not do business with a company which behaved so erratically.
It has now been revealed the fruitless exercise has cost taxpayers at least $13 million since 2015, including a $9 million payment to ASF to cover some of their costs after the State Government decided last year not go ahead with the $3 billion integrated resort at The Spit after all.
And it may all be about to start again. The State Government’s new Global Tourism Hubs process, virtually indistinguishable from the former Integrated Resort Development process, has now started right at the beginning, inviting developers to register their interest in new casinos — one in Cairns, with the Gold Coast process to begin later this year.
The Gold Coast has been down this path many times only to be let down at the final hurdle.
As this newspaper has warned previously, for more than a decade this city has been used as a political football over whether it should have an integrated resort. The backflipping and political pouting has cost taxpayers millions of dollars and far too much grief.
The Newman Government could have green-lighted the project, but dithered.
Labor snubbed the ASF’s proposal for an integrated resort in the Broadwater, only for former premier Peter Beattie to reveal — without further explanation — that he wanted a cruise ship terminal after all.
The Gold Coast is not a backwater where deals are done over poker. The white shoes are long gone.
If we want to attract big business for big-ticket items we must be certain on what we are offering — and equally certain we won’t pull the rug from beneath their feet.
The challenge for the Government, and the Gold Coast, will be convincing potential investors that they won’t waste $12 million or more on a politicised pipe dream, as ASF has.
It is hoped those charged with overseeing this process have learned from this shameful series of events to prevent the community division and hit to the state’s business reputation from happening again.