Montefiore: Risky Business and 'Sale of the Central Market Arcade'

As readers know, Sir Monty’s permanent lodging at his North Terrace club allows him to mix with the city’s movers and shakers in his traditional pursuit of opportunities relating to Old Adelaide Money. But he is discovering that pursuit of New Adelaide Money can be just as lucrative. The club’s handsome 1864, three-storey bluestone pile remains free of the great unwashed who instead linger in dimly lit Victoria Square cafes or wander the fruit and veg aisles at the Central Market. But that doesn’t mean Sir Monty doesn’t meet them, fossicking for ripe, low-hanging opportunities.

It turns out that Town Hall is hatching a grand development plan on land sited next door to this nationally famous fruit and veg Adelaide ‘icon’, once a 50-year retail lease ends next year. It’s land on which the neon-lit Grote Street Coles supermarket hums, next door to which about 70 other traders pursue business in a mix of shops in what is called the Market Arcade. Thankfully the plan will leave the existing market and its land status untouched.

The purpose of the proposed “sale of the Central Market Arcade” (Town Hall’s words) is driven by a vision for multi-storey apartments — possibly up to 30 storeys — as tipped by former Lord Mayor, Stephen Yarwood, in 2013. Town Hall says that “a residential component is likely to require the sale of apartments to purchasers … [and] can only take place by way of the sale of the air rights, rather than a leasehold arrangement.” That money would “fund the retention and ownership of the retail, market uses, service/loading areas, as well as associated car parking”. The deal would feature a public-private partnership between Town Hall and a “selected developer” but ensure that Town Hall stays land owner/custodian “to maintain control over project outcomes”. This is probably where Sir Monty might scoop a lucrative fee, as an interpreter for the developer, translating jargon. For example — “catalytic redevelopment offering multiple strategic outcomes.” Go figure.

A post shared by Central Market Arcade (@centralmarketarcade) on Oct 17, 2016 at 6:55pm PDT

 What will become of the Central Market Arcade’s 70 small businesses?

One possible sticking point, however, was recent feedback by some South Australians. Ordinarily, such a vision wouldn’t be publicly discussed, but the land is defined as Community Land and before this status can be revoked, the law says the people must be asked. Town Hall did so.

It was a slim sample, because few South Australians have the time to chase up and respond to endless ‘consultations’ pursued by local government. But a majority, from multiple suburbs, sensing a Town Hall hidden agenda, said an emphatic no. Others, who were noted by Town Hall as agreeing, added notes that voiced uncertainty and demanded more information. The majority said no in quite detailed ways, sometimes angry and rude. Most reckoned that the revocation would result in the sale of the land, a suspicion fed by the feedback form that only stated that the revocation would be “for the purposes of redevelopment”, not “sale”. Some also considered the catastrophic outcome for about 70 families trading in the arcade whose businesses could be shut down on only six months’ notice sometime in the next three years.

Anyway, Town Hall administrators discounted the responses, noting in April 26 papers that the “concerns raised have been sufficiently addressed…” Indeed, they had been, weeks earlier, but not in a way respondents knew about. A month earlier, on March 30, Town Hall’s 2016–17 business plan allocated $160,000 to cover ‘project cost’. Oddly, it noted one ‘tangible benefit’ as being “certainty to arcade traders regarding their future occupation/leasing”. In a risk assessment, it noted one as being “community land revocation not supported”. Another was that there might be “no market interest in the Arcade development”.

Astute! A plan for a speculative, high-rise build in about two years’ time, when city apartment development will peak at glut levels (with many units still empty) and with property markets anxious about rising interest rates, could be a little like visiting the Adelaide Casino and putting the Lord Mayor’s gold chain on the red square. Odds of success — risky.

Speaking of money, Sir Monty noted that in the “Lord Mayor’s message” endorsing the business plan — and written well before the April decision — Town Hall had already decided it will spend $500,000 on the arcade master plan “to ensure that we appropriately capitalise on this once in a lifetime opportunity…” But this amount too is odd, given that a ‘livable projects’ summary back in March noted a 2016–17 cumulative net cost for the project of $3.565m. Clearly, a river of cash is backing up. Sir Monty’s newly revised business plan now anticipates the lure of New Adelaide Money.

With Town Hall’s credit rating, what could possibly go wrong?

Header image: Central Market Arcade, Instagram