Row over Adelaide church "sweetheart" deal

Adelaide property industry figures have raised questions over the sale of government land to the Catholic Church for a major redevelopment project.

The Australian reports South Australia's Rann Government is defying criticism over the sale of prime land in central Adelaide to the Catholic Church, rejecting suggestions of a "sweetheart" deal.

The site in Victoria Square, formerly a tram depot, was sold to the Catholic Church Endowment Society for $5.87 million under a contract signed in 2004, when the market value was $1.55 million higher.

Property industry figures have raised concerns about the deal, with questions asked in parliament about the negotiations and whether the second most senior Church figure in South Australia, Monsignor David Cappo, was involved.

Mike Rann appointed Monsignor Cappo to the state's Social Inclusion Board in 2002, and he also became a non-voting member of the cabinet in mid-2005.

A spokeswoman for the Premier said yesterday there was "nothing untoward" in the land deal, and she did not believe Monsignor Cappo was personally involved.

"The Government just can't sell things on a sweetheart deal," she said. "It's got to go through a public service process.

"Everything was above board, everything went through cabinet. It went through the entire processes of the public service, as all of these sales do."

The Catholic Church Endowment Society has developed the 6,200sqm site into a six star environmentally friendly building, which is due to be completed in September.

State government utility SA Water will lease eight floors of the building, at an expected cost of more than $121 million over 15 years.

The Victoria Square development is part of a strategy to boost the Church's income from its property holdings.

Senior property industry figures have told The Australian of doubts about the way the initial deal for the site's sale was "done and dusted".

Liberal MP Rob Lucas has lodged a number of Freedom of Information requests for documents relating to the sale, in response to concerns raised privately with him.

"There are a number of people in the industry who have been complaining about the deal and have been complaining about the process," he said.

Earlier, The Australian reported the Adelaide Catholic Church will reap millions of dollars from the deal for land in the Adelaide CBD, securing the Church's financial future in South Australia and providing a template for doing business around the country.

A contract for the sale of the land for $5.87million, including GST, was signed in October 2004 and the contract settled in December 2005. A spokesman for Mr Rann said the price was based on a valuation by the Valuer General in October 2003.

But the price paid was $1.17million less than what the land could have fetched at market in 2003, according to commercial land value figures provided by property analysts Colliers International.

The Church paid an average of $947 per square metre compared with average CBD land prices of $1,136 per square metre in 2003, $1,194 in 2004 and $1,378 in 2005. The last time city land averaged $950 a square metre was 2002, according to the figures.

The man who put together the deal, former Mitsubishi Australia boss Graham Spurling, denied the deal showed the Government had given the Church preferential treatment. "It was done with complete probity. That is a fact," he said. "We offered the right money at the right time."

Mr Spurling says the agreement, and the 10 storey office complex, VS1 being built on the site, breaks new ground for the Church.

"I don't think any (diocese) has gone this far," he said.

He said the plan had been directed by the "entrepreneurial" Archbishop Philip Wilson, who was appointed to his post in December 2001, three months before Labor won office.


Premier defends church land deal (The Australian, 7/7/08)

Land deal to fill church coffers (The Australian, 7/7/08)


Adelaide Archdiocese

Mike Rann, SA Premier


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