The Harbour Trust's push for leases of 35 years or more in amendments to the Trust Act is alienation of PUBLIC land.
Following the Independent Review, the Commonwealth Government is seeking to change the Sydney Harbour Federation Act to allow long leases of 35 years or more without adequate Parliamentary and community scrutiny.
Leases of 35 years or more may result in lease terms of, say, 99 years, which is the effective sale of land for a private purpose. There is no need for leases over 35 years. Most commercial leases are for terms of 25 years or less. The Trust has many successful tenants, all of whom have leases of 25 years or less.
HPG has issued a position paper on the Sydney Harbour Federation Trust Act Amendment Bill 2020 Leasing Provisions - Sections 64A, 64B, 64C.
It is reproduced here below or you can download a PDF copy here →
HPG POSITION PAPER SYDNEY HARBOUR FEDERATION TRUST ACT AMENDMENT BILL 2020 Leasing – Section 64A
Background
Trust lands hold rich indigenous, colonial and military heritage that tell the story of our Nation. They boast a pristine natural environment of native vegetation and a rich marine habitat. The footprint of the built environment is soft upon the land providing an unparalleled natural parkland of beauty and respite.
Trust lands were a gift from the Commonwealth Government to the people of Australia in celebration of 100 years of Federation. As the Prime Minister, John Howard, said:
‘Sydney Harbour, as I don’t need to remind any Australian, is probably the world’s greatest harbour. It is one of the great natural beauty spots of our nation. It is …….. one of those parts of our country which gives immense pride and immense pleasure, not only to the residents of Sydney, but also to all Australians because it wins such wide acclaim around the world.’
These exceptional Harbour Trust sites must be preserved, protected and interpreted as required by the objects legislated in the Sydney Harbour Federation Trust Act for the people of Australia to enjoy. Three objects have particular relevance here:
b) to protect, conserve and interpret the environmental and heritage values of Trust land;
c) to maximise public access to Trust land;
d) to establish and manage suitable Trust land as a park on behalf of the Commonwealth as the national government;
The current pandemic has highlighted the need for open spaces for passive recreation and Trust lands have proved to be vital assets for the well-being of the wider community.
Proposed Amendment to Leasing Provisions
The rationale provided by the Minister for amendment to the existing leasing provisions to allow for long leases, is to provide the Trust greater flexibility in its leasing capability. The Amendment provisions provide for long leases of 35 years or more. This is an attempt to attract additional private investment providing much needed funding for the Trust to rehabilitate its sites.
When the Sydney Harbour Federation Trust (Harbour Trust) was formed in 2001, it was intended that the Trust should be largely reliant on financing through Parliamentary appropriations.
The goal posts have changed. The Trust is now looking to increase the opportunities for private sector investment to fund the restoration and activation of its sites. The proposal is for long leases of 35 years or more, not just for buildings but most likely ‘precincts of land’. HPG echoes the community’s concern that lease terms of 35 years or more will result in the alienation of Trust land, (land held in trust for the people of Australia), for private purposes.
This matter was raised by the community at a public forum held on 18 February 2020 as part of the Review of the Harbour Trust. 300+ people attended and overwhelmingly expressed opposition to proposed long term leases of 35 years or more which have no cap.
The table below summarises the differences between the current legislation, the proposed amendment and HPG’s position in reply.
* (Ref Column 5 of table above) We also suggest that further transparency would be achieved by the following amendments:
HPG’s PROPOSED AMENDMENTS
1. Prior to the lease or licence coming before a House of the Parliament, the Trust:
a) must place the proposed lease or licence, with terms and conditions, on public exhibition for a period of 28 days; and
b) as part of the exhibition, publish a Statement of Reasons from the lessee or licensee setting out how the proposed lease or licence is consistent with the objects of the Act, the Comprehensive Plan and relevant Plans of Management; and
c) consult with the Trust’s Community Advisory Committee in relation to the proposed lease or licence, and the terms and conditions.
2. A Report from the Trust that includes the results of the public exhibition and any advice from the Community Advisory Committee, to be tabled in a House of the Parliament at the same time as the proposed lease or licence and its terms and conditions.
Summary
The Amendment Bill is seeking to change the Trust Act to allow long leases of 35 years or more without adequate Parliamentary or community scrutiny.
PARLIAMENTARY SCRUTINY
The Amendment Bill requires that a ‘proposal’ for a long-term lease of 35 years or more is tabled for consideration by Parliament. This is a change from the current Act, which requires Parliament to consider the terms and conditions of the lease by way of ‘Legislative Instrument’.
A ‘proposal’ does not provide adequate scrutiny by Parliament because it fails to include the most essential of information being the ‘terms and conditions’ of the lease. The ‘Proposal’ only provides the following information:
• Name of the lessee
• Description of the land the subject of the lease
• Length of lease
• The use of land that would be permitted.
The ‘terms and conditions’ of the lease must be available for public scrutiny, because they contain important and relevant details including the rights and obligations of the parties.
The advantage of a Legislative Instrument is that it allows for greater transparency with detailed information including the ‘terms and conditions’ of the lease, to be provided to Parliament.
The reason that Parliament currently has the ability to disallow long leases is because the lands, the subject of the leases, are unique. These lands are of national heritage significance. The Trust has by its very nature a strict fiduciary duty to act in the best interests of its beneficiary, the Australian people. It is paramount that there are strong protections in place to ensure appropriate use of these lands.
Parliament, being a democratically elected body, representing the people of Australia, is the appropriate body to scrutinise long leases. Because these lands are held by the Trust on behalf of the people of Australia, there is an obligation on the part of the Government to ensure that the Trust does not lose control of the lands to the private sector. Long leases may result in the alienation of land equivalent to a sale. Parliament is the only appropriate body of review in these circumstances.
COMMUNITY SCRUTINY
It is important that safe-guards are in place where long leases are concerned. The Community as the primary beneficiary of the Trust has a vested interest in ensuring that long-term leases between 25 and 35 years are appropriate in all circumstances. The community should be involved at the early stages of negotiation of the lease before it goes to Parliament. It is important that the Trust and the community work together. If the proposal has merit it will get community support. Without community support it runs the risk of failure.
HPG suggests that the amendments outlined above, requiring that the lease be placed on public exhibition and that consultation with the Community Advisory Committee (CAC) be undertaken prior to the lease being presented to Parliament, should be adopted.
The results of the public exhibition, the Statement of Reasons as to how the lease complies with existing legislation and the results of the consultation with the CAC should then be presented for Parliamentary scrutiny at the same time as presentation of the lease document.
Long-term leases of more than 35 years are inappropriate for these lands for the following reasons:
The Harbour Trust claims that longer leases will open up more opportunities for partnerships to “develop a sustainable operational future.” They are seeking to change the Sydney Harbour Federation Trust Act to allow long leases of 35 years or more without adequate parliamentary or community scrutiny.
Leases of 35 years or more with no cap may result in leases of terms of up to 99 years, which is the effective sale of public land for a private purpose.
The advantage of a lease ceiling of 35 years is that the Trust will not be burdened with a use which over time may become inappropriate or fail to meet the objects of the Trust Act. A lease of over 35 years alienates public land for well over a generation. The Trust must not burden future generations with leases which after 35 years may not suit community expectations.
There is no need for leases over 35 years. The Trust has many existing successful tenants all of whom have leases of terms of 25 years or less. These tenants include: the Sydney Institute of Marine Science (SIMS), a world-leading marine research facility; Lands Edge Foundation, an outdoor education provider; multiple food and beverage operators such as Ripples at Chowder Bay, Gunners’ Barracks and Sergeants Mess; as well as the provision of maritime services at Woolwich docks.
A good and successful tenant can always be granted a new lease by the landlord.
Only in exceptional circumstances is a lease of more than 25 years required for commercial purposes, such as 6-star hotels and airports. Even supermarkets have leases of less than 25 years. Of course, such developments would be inappropriate on Trust lands. However, limiting lease terms to a period of up to 25 years (with up to 35 years possible only with Ministerial approval and Parliamentary disallowance provisions) would avoid approaches for inappropriate development of these sensitive heritage and environmentally important sites.
Most private sector investors would always prefer a long lease, but this is not likely to be in the interests of Trust properties. The higher the intensity of use and capital expenditure incurred requiring a longer lease term, will result in a greater risk of alienating Trust land. The Trust must not lose control of its lands.
If the Commonwealth Government will not provide sufficient funds to rehabilitate Trust lands, then it will weaken the Trust. The Trust risks being pressured relentlessly by the private commercial sector, and anyone with good ideas but no money is likely to be turned away.
Long leases risk creating precincts or sections of precincts that will lose their existing character and become undesirably homogenous. Developers will seek to make changes to the landscaping and the historical fabric of buildings (inside and out) e.g. the turbine hall on Cockatoo Island could feasibly have a building built within the framework of the building inside. It will be argued that the facade is the reference to the history and one can view the ‘app’ to see what it was like before! Some precincts and buildings should be left without any leases at all, but remain for visitors to see as they are, especially the convict gaol at Cockatoo Island. Such precincts can be used for a variety of applications and events.
The Trust favours identifying buildings suitable for long leases. This will be a green light to developers wishing to benefit from the million-dollar views that these sites boast. At odds with the soft footprint of the existing built environment, proposed uses risk being intensive and inappropriate and as such will fail to interpret the heritage and environmental values of the sites.
The Trust has already chosen inappropriate uses for Trust buildings for financial gain eg the ‘Big Brother’ house on North Head occupies a former artillery museum located at the gateway to North Head Conservancy. The Trust chose to allow this development rather than a proposal for an Environmental Centre purely because of the commercial return.
Clover Moore’s comments below in respect of the Moore Park development, where office space and a hotel are proposed for land that was intended to be used for public and entertainment purposes, are also applicable in these circumstances:
“These are not small changes – piece by piece they are overturning decisions made decades ago to preserve these areas for community use and they are doing it at a time when the need for these kinds of facilities has never been more important.” (SMH. Jacob Saulwick, September 13, 2018)
In Conclusion
HPG is committed to ensuring that Trust lands are ‘protected, conserved and interpreted’ for future generations of Australians to enjoy. This requires strong legislative protections that are transparent and will provide the necessary protections. The tragedy will be if the Trust loses control of these lands to commercial entities that have only their own interests at heart.
Jill L’Estrange,
President
1 February, 2021