Contact Person Nick Jarvis

Royal Derwent sale 'disappointing'- The Mercury


DAVID KILLICK   |   March 19, 2013 04.28pm

#### The sprawling Royal Derwent site at New Norfolk.

THE State Government’s 2001 sale of New Norfolk’s Royal Derwent Hospital site was marred by multiple failures to ensure the buyers lived up to their side of the bargain, the Auditor-General has found.

The 250ha site was sold for $350,000 to a consortium made up of a private developer and the local council

The sale, the sale price and the failure of the site to be developed as promised have been the source of much community anger over the past decade.

Previous valuations for the site had been as high as $45 million.

In a $130,000 report released today, Auditor-General Mike Blake found the sale price was fair because of the costs involved in remediating the site and there were no conflicts of interest among the panel which decided on the developers.

He noted that when the consortium split, the developer profited from the subdivision and sale of land and the council was left with crumbling heritage buildings which it could not afford to maintain.

The report noted the abilities of the prospective developers to fulfil their obligations were not properly assessed before the sale.

And it found that the Department of State Development failed to properly word the terms and conditions of the sale to achieve the desired outcome.

“While parts of the sites were developed for the benefit of the region, the sale agreement has not resulted in the purchaser delivering all specified outcomes on the site which is disappointing,” Mr Blake said.

“Despite the agreement’s expressed intention for development of the site, our view is that the terms and conditions of the sale contract were unenforceable.”

Mr Blake said future asset sales should include clear, unambiguous enforceable performance clauses to hold developers to their end of any deal.

Comment has been sought from the Government.