State Heritage Convention
Mr Ian Baxter
Director, Heritage Council of WA
"Working with Developers: The challenges and lessons
learnt over the last ten years"
Introduction
Over the last ten years the Heritage Council of Western Australia (HCWA) has dealt with over 2500 development applications emanating from a requirement under section 78 of the Heritage Act to refer places of heritage significance to the Council for its advice.
Many of these applications are for very small projects but others such as the Swan Brewery and the Old Treasury Buildings involve quite detailed assessments and extensive negotiation with the parties concerned to achieve a win-win result.
Many lessons have been learnt over the last ten years and the objective of this paper is to share some of that knowledge so that a greater awareness of the issues that drive development are understood and how they must be addressed to achieve a conservation outcome.
In my experience the best outcome is achieved by close collaboration between the parties at the earliest opportunity and throughout the course of the project however where there is no goodwill or a defensive position is set up, resolution can be difficult if not impossible to achieve.
Developers come in all shapes and sizes from the international companies to small investors and owners that are involved in the development of a heritage listed place.
Developers also include State and Commonwealth agencies and referrals from these agencies has been a major area of activity for the HCWA over the last eight years with the move towards rationalisation and disposal of property assets.
The primary issue that drives developers is the maximisation of profit for the shareholder. This can lead to great tension between conservationists, particularly where there is an expectation that a certain level of unrestrained development can be achieved.
Certainty for developers is paramount and the more this can be achieved in a timely fashion the less anxiety all around and the more likely a positive conservation.
Developers traditionally run the line that the "Community"
should pay for any additional burden placed on the development
of a place by conservationists such as the HCWA.
It is well known, however that there are few, if any really substantial
compensatory measures available to offset the losses that can
be associated with a heritage listing.
This creates a dilemma for those managing the process, so we must employ whatever tools are available to us via planning bonuses, grant schemes, conservation plans and heritage agreements to achieve a positive outcome for both parties.
We have learnt that timing is critical, especially in terms of identifying what is significant about a place, so that both the conservationist and the developer get a clear idea as to what is a no go area and where there is flexibility to adapt, extend and modify.
We have to challenge the "experts" by using simple common sense. If there is a road reservation, for instance, that is presenting a threat to conservation such as in the case of the Fitzgerald Hotel, we must be prepared to ask why it is necessary and seek alternative options.
The Heritage Council has been involved in hundreds of developments over the last ten years, some successful others less so; the challenge for the future is to build on the knowledge that we have; to educate the key stakeholders and to act quickly and decisively.
Who are the Developers
GOVERNMENT
Government agencies undertake developments in their own right
and also contract development to private developers whilst retaining
an interest in the property.
Developments by Government do not have to be for a public purpose,
although it could be argued that the proposed re-development of
the old Treasury into a five star hotel is a public purpose of
a kind.
In the case of a school or a hospital the purpose is obvious the
constraints and the drivers none the less are similar to those
that face a private developer
Government bodies in Western Australia are bound by a Cabinet
Policy on the disposal of assets to seek advice and direction
from the HCWA as to how and under what conditions a property should
be disposed.
LOCAL GOVERNMENT
Local Government is commonly involved as an interested party rather
than a developer and as such can have a major influence on the
final outcome. In situations like the Maltings in Northbridge,
the Town of Vincent played a very influential role in facilitating
a conservation outcome through the provision of planning bonuses.
In the case of the Raffles Hotel, the local authority has not
been supportive of conservation and the planning bonuses that
may be necessary to achieve a positive outcome on that site may
need to be provided under section 38 of the Heritage Act.
PRIVATE OWNERS
The majority of development work undertaken by the HCWA is in
respect of privately owned property. Private developers are now
well aquainted with the development application processes of the
HCWA and the need to reach a common understanding of conservation
parameters as quickly and efficiently as possible.
A number of examples such as the Coronado Hotel in Claremont,
the Fitzgerald Hotel in Northbridge and the Maltings demonstrate
the outcome that can be achieved through a collaborative process.
ISSUES DRIVING DEVELOPERS
Government Developments
Government as developers of places for public purposes generally
act in good faith in achieving a positive heritage outcome, however
there are some notable exceptions. In these instances agencies
are often ill informed about conservation principles and or have
a complete disregard for heritage conservation as a concept.
In the case of road developments for instance up until recently
little recognition was given to heritage factors in designing
and building roads, however a comprehensive education program
and awareness raising effort has improved this situation considerably.
Agencies within State Government now own their assets and are
under increasing pressure through what is called a capital user
charge to dispose of assets that are a liability; the proceeds
from sales can be used to top up operational funding or be invested
in new assets.
There is however a legacy from the previous culture where maintenance
of buildings may have been deferred or never undertaken because
the asset was owned by "government" creating a barrier
for a new owner to overcome; where possible the HCWA endeavours
to build a requirement into a heritage agreement before sale that
ensures that a conservation outcome is achieved.
Often Government agencies are faced with very large redundant
sites and development of these can be impacted by the need to
change infrastructure simultaneously further complicating the
development viability, such a situation exists with the transfer
of switch yards and overhead power lines at the East Perth Power
Station.
Community interests can also have a big impact on the practicality
of re-development of places eg:- Heathcote, Sunset and Swanbourne
Hospitals
The importance of seeking input from the community cannot be understated,
although at the end of the day broader issues may prevail.
Lease terms can be a significant factor in creating a viable project…if
too short it may mean that a developer cannot receive sufficient
payback on the capital invested to make the conservation component
of the development work.
Governments tend to retain ultimate ownership of places which
are considered to have intrinsic value to the public; in cases
such as the Swan Brewery a 65 year lease was negotiated, in the
Old Treasury example a 99 year lease is contemplated.
Private Developers
The profit motive is paramount with heritage often seen as an
impediment to a successful outcome so there are often considerable
hurdles to overcome. A return on capital invested of 25%-30% is
usually expected.
Timing is an important element as often money is being borrowed
at high interest rates to prove that a development is viable;
a delay in obtaining approvals can cost considerable money and
an opportunity can be lost with a prospective occupier/tenant.
Similarly, markets can be very fickle and example being the level
of surplus office accommodation available in the City of Perth.
Registration of a place subsequent to a new owner or developer
coming on board can result in a degree of conflict and uncertainty
and an extended negotiation period while the matter is challenged
with the Minister via solicitors.
Subdivision of land is another area where development can adversely
affect a heritage place but can also generate proceeds from the
sale that can assist with the conservation of the place. This,
however needs to be negotiated up-front and not assumed as once
a property changes hands it is very difficult to tie the deal
back to a commitment entered into by another party
What have we learnt
