Council land deal under scrutiny

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Lord Mayor Graham Quirk has asked Queensland's corruption watchdog to investigate Brisbane City Council's $15 million purchase of flood-affected land.

The deal was struck between some of his most senior officials and Mirvac, one of the country's biggest property developers.

A four-month investigation by Seven News has uncovered serious concerns about the way ratepayers' money was spent.

Last summer's flood swamped Tennyson Reach, a flagship development in Queensland for Mirvac.

The developer was left holding riverside land with approval for three more luxury apartment buildings.

Mirvac scuttled those plans and secretly negotiated to sell the site to Brisbane City Council.

This was a ‘once in a lifetime opportunity’ Lord Mayor Graham Quirk told Seven News.

“Riverfront land doesn't come along every day of the week,” Mr Quirk said.

“We were never buying a piece of land here, we were buying a park. A package.”

Attempts to investigate the deal, through Right to Information laws were rejected, but Seven News requested Council records from the Lord Mayor's office.

The documents were provided and were also handed to Queensland's Flood Inquiry.

Following detailed scrutiny Seven News presented the findings to Mr Quirk, who today called in the Crime and Misconduct Commission.

“In terms of the concerns that have been expressed to me, I will be referring this matter to the CMC,” Mr Quirk said.

On March 2nd, Mirvac's Queensland CEO Matthew Wallace sought a meeting with then Lord Mayor Campbell Newman to discuss "a potential community based opportunity."

Mr Newman, about to defect to State politics, instructed his Planning Chair, Amanda Cooper, to meet the Mirvac boss.

After just two more meetings, she and Council CEO Colin Jensen agreed to a deal.

Council would pay $15 million even though there had been no investigation to determine a fair price for the property.

The 2.5 hectares of flood-prone, riverfront land would be transformed into parkland by mid-2013.

But only half the site was ever going to be developed. The rest was always going to become public space.

Mirvac drew up a memorandum of understanding. Their land would be sold to the people of Brisbane for $6 million.

Ratepayers would contribute a further $9 million to turn it into parkland. That contract was granted to Mirvac without going to competitive tender.

The next day Council's top lawyer, David Askern, wrote "we will need access for our valuer to their valuer to get valuation to justify price paid."

According to the Lord Mayor “that's normal process.”

On June 5th 2011 Mr Quirk joined Mr Wallace to announce the deal. The land still hadn't been valued.

That took another two weeks.

The valuer - hired by Council - based his report on pre-flood values because "no recorded sales have occurred of flood affected residential development sites to gauge the implications."

He priced the land at $9.15 million.

Council and Mirvac agreed to simply swap the separate contract amounts to retain the overall purchase price of $15 million.

Mr Quirk confirmed, that was the amount the developer needed.

“Mirvac did have that figure there - that was the figure for which they could get it through their board,” Mr Quirk said.

Mirvac's sales centre will eventually be turned into a community centre, but until then the developer will pay just $10 rent.

Mirvac said the sale of the land at Tennyson to Brisbane City Council was an independent arms length transaction.

The developer issued a statement saying "every aspect of the transaction has been transparent and done on a strictly professional and commercial basis."

"Mirvac is confident that the transaction will stand up to any level of scrutiny and would welcome an investigation by the CMC."

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