Failure to pay compensation may jeopardise future Balmain Leagues Club redevelopment

Landowner Heworth Holdings Group invites the Minister for Transport, Jo Haylen, and the Secretary to investigate improper conduct and abuse of power and alleged misfeasance in public office by Transport for NSW and its senior executives involved in the Balmain Leagues Club acquisition and rescission debacle that has now spanned over half a decade and still remains unresolved.

The landowner is out of pocket millions of dollars over the intentionally protracted compulsory acquisition and later rescission of the former Balmain Leagues Club site located in inner Sydney’s Rozelle by Transport for NSW for the Western Harbour Tunnel project. The leasehold acquisition, which was for a seven-year construction lease, took place in October 2021 and was rescinded less than a year into the lease term.

Since the landowner received the initial ‘notification of acquisition’ in March 2018, it is yet to receive a single cent in compensation for millions of dollars in unpaid rent by Transport for NSW and financial damages and out of pocket expenses caused by the Department’s reckless actions.

Christopher Walsh, Head of Property at Heworth Holdings, alleges Transport for NSW’s actions over several years raises significant concerns regarding the use of their powers under the Just Terms Act and their improper conduct during the acquisition negotiations process as well as the eventual rescission of the acquisition of the site.

“This is a prime example of Transport for NSW’s exploitation and abuse of its unfettered powers and manipulation of legislative deficiencies. It’s disgraceful and we are, unfortunately, one of hundreds of similar acquisition cases gone wrong,” he said.

“It took Transport for NSW nearly four-years to acquire the Balmain Leagues Club site and, subsequently, less than four months into the acquisition to find an alternate tunnelling site.

“Furthermore, the conduct in which Transport for NSW and their senior executives granted a $722 million construction contract variation to John Holland in January 2022, who would commence tunnelling works from the Rozelle Interchange instead of the Balmain Leagues Club, without putting the contract out for competitive tender, also raises serious questions over probity and proper procurement processes and could be the matter for an investigation by the current Labor government.”

Mr Walsh warns dispossessed landowners of Transport for NSW’s historical track record of malicious behaviour, total lack of accountability and unapologetic use of loopholes in the Just Terms Act when carrying out compulsory acquisitions in NSW.

He alleges dirty tactics, unbecoming of an acquiring authority and model litigant, such as prolonged negotiations, unjustified delays, low-ball compensation offers and strategic exploitation of the Valuer General’s and litigation processes.

The matter returns to the NSW Land and Environment Court for a Directions Hearing on 5 February 2024.

Timeline of Events:

July 2017 Heworth purchases Balmain Leagues Club site and appoints architects, Scott Carver to design Masterplan Concept for a Development Application

March 2018 Heworth receives initial notification of acquisition from NSW Government to compulsorily acquire a leasehold over the site

September 2021 Transport for NSW Deputy Secretary, Infrastructure and Place, Camilla Drover states in Budget Estimates that the Government will not be looking at alternative sites to house the ‘dive site’ for the Western Harbour Tunnel. Ms Drover stated the government hadn’t yet started procurement for the project

October 2021 NSW Government acquires site under a seven-year construction lease (having already delayed critical lead-in development works for over 18 months)

January 2022 NSW Government awards a $722 million construction contract variation to John Holland, as part of the Rozelle Interchange project they were delivering, without going to formal tender

May 2022 Significant fire breaks out on the Balmain Leagues Club site

June 2022 John Holland commences enabling works (therefore starting works on the WHT tunnel and drawing down on $722 million Contract)

July 2022 NSW Government rescinds the leasehold acquisition site stating it no longer needed the property for a dive site