Bizarre saga of the plaza

Townsville Bulletin - - Investor - with Tony Rag­gatt

EVENTS sur­round­ing the prime Flin­ders Plaza site in the CBD are bizarre, to say the least, but one thing is clear – the site needs a new de­vel­oper to take on the pro­ject.

As re­ported in the Bul­letin on March 19, Townsville de­vel­oper Lau­rence Lancini has sought to with­draw from a joint ven­ture with na­tional re­tail group Austex which holds ti­tle to al­most an en­tire block on Flin­ders St, pro­posed site of the $ 200 mil­lion en­ter­tain­ment and re­tail pro­ject Flin­ders Plaza.

For rea­sons only they know, Aus­texx are ig­nor­ing ap­proaches to deal with a par­cel mostly ac­quired in 2007 for a to­tal of about $ 40 mil­lion.

The Lancini Group, which is a 25 per cent share­holder in the joint ven­ture, re­ported that they had been met with si­lence from Aus­texx for months de­spite re­peated at­tempts to or­gan­ise a meet­ing to dis­cuss the pro­ject’s fu­ture.

They felt they had no al­ter­na­tive but to re­sign and sell out.

The com­pany said it had ex­er­cised a put op­tion – an op­tion con­tract giv­ing the owner the right to sell – to dis­pose of the group’s share­hold­ing.

Pre­sum­ably, the em­bat­tled Aus­texx group, owner of the debt-trou­bled Di­rect Fac­tory Out­let chain, has more press­ing mat­ters to deal with.

While Aus­texx would not re­turn calls from the Bul­letin, the Townsville City Coun­cil is also be­ing stonewalled. Deputy Mayor David Crisa­fulli told

Busi­ness Desk they, too, had tried to speak with Aus­texx rep­re­sen­ta­tives for months with­out suc­cess.

There is a be­lief that the West­pac Bank which holds a charge over the joint ven­ture com­pany could take ac- tion to sell the prop­erty. If it does, it may re­quire a group the size of a West­field to take it on.

Cr Crisa­fulli said the coun­cil was for­mu­lat­ing an in­cen­tive pack­age to en­cour­age in­vest­ment in the city.

He said all lev­els of gov­ern­ment should fo­cus on sell­ing the city’s bright fu­ture and de­liv­er­ing in­cen­tives to make in­vest­ment more at­trac­tive.

‘‘ The coun­cil will play a role in that in the weeks ahead,’’ he said.

While re­cent events were a set­back and a blow for the Lancini Group, he said the ‘‘ hard work’’ of amal­ga­mat­ing such a big site – 1.4ha – had been done.

‘‘ My fo­cus will re­main on en­sur­ing the city gets the depart­ment store it de­serves,’’ Cr Crisa­fulli said. The site rep­re­sented a ‘‘ golden op­por­tu­nity’’.

‘‘ If you can find nearly an en­tire city block in a city with the pop­u­la­tion of nearly 200,000 where the area has been up­graded to the stan­dard of Flin­ders St, I’d be very sur­prised,’’ he said.

‘‘ We want to make sure such a prime piece of real es­tate is not wasted.

‘‘ I think it’s a lay-down mis­ere that the city de­serves David Jones.’’

There are whispers that David Jones is bid­ding to go back into the mall, but at this stage it seems that they are only whispers.

Cr Crisa­fulli said the coun­cil had been talk­ing to David Jones ex­ec­u­tives and would con­tinue to en­cour­age their re­turn to the city.

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