ASER (Restructure) (Facilitation of Riverbank Development) Amendment Bill

Second Reading

The Hon. P. MALINAUSKAS (Minister for Police, Minister for Correctional Services, Minister for Emergency Services, Minister for Road Safety) (17:50): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

The new Riverbank is already becoming an Adelaide success story and is changing the way our State is seen interstate and overseas.

The redeveloped oval has been a triumph, with visitor numbers not seen since the 'Bodyline' over half a century ago—in times of economic change it has galvanised South Australians around a common view of what makes our State great. It has showcased all that is good about our State to the world.

Now, we have the opportunity to extend this project's success to the Festival Plaza.

When the Festival Centre turned 40 it was described as 'so Adelaide'—its origami-like silhouette represented an early, but tentative, engagement with the Torrens Lake and reinforced the role of Elder Park as a place of public gathering at the tail end of Adelaide's 'kilometre of culture' stretching along North Terrace.

When completed in 1973, the centre was the nation's leading multi-purpose arts centre and it quickly became the heart of successive festivals. Now, along with neighbouring rotunda and gently sloping banks of the Torrens, it is the natural home and congregational point for the arts, leisure and cultural activities—including multiple international standard festivals and performing arts companies. It continues to be a national icon for South Australia.

Last year the government embraced an opportunity to extend the successful outcomes of the Adelaide Oval redevelopment to the Festival Plaza—in a proposal developed with Walker Group Holdings Pty Ltd which had previously been granted rights as the government's preferred partner for the integrated redevelopment of the plaza site.

In March 2015, the government approved the Walker proposal and committed to a $180 million budget to realise this ambitious and exciting project. Concept visuals were released to positive public feedback at this time, and the Riverbank Authority was tasked with further detailing the design, engaging with stakeholders and taking oversight of the project.

In short, the project envisages a complete redevelopment of the Festival Plaza and Station Road precinct as a world-class space featuring:

a sweeping multi-purpose plaza uniting the footbridge, the theatres, casino, railway station, North Terrace and through to Elder Park

a public realm constructed from the highest quality materials and including public artwork, water features and natural plantings, plug-and-play facilities and interactive spaces for young and old alike

restaurants, cafés and bars, active ground-floor retail and a Kaurna cultural space that will bring life to the plaza day and night

a major redevelopment of the Elder Park frontage of the Festival Centre that will underpin its connections to the Riverbank

a premium office building of up to 24 stories, built to be highly energy efficient and offering floor-plates with the potential to attract major national and global anchor tenants to the State

a new parliamentary garden and a >1,500 space underground carpark with electric car charging facilities that will support the casino rebuild and the growth of the Festival Centre, and

seamless connections between the footbridge and the railway station through an at-grade walkway beneath the proposed casino expansion.

The new plaza will be a place of discovery and encounter, a veritable Wunderkammer of curios and quirks, delights and diversions—showcasing the best that South Australia has to offer day and night.

The concept designs have been subjected to consultation and further development by architects Ashton Raggatt McDougall and landscape consultants Taylor Cullity Lethlean in collaboration with the Adelaide Festival Centre's architectural consultants Hassell.

One of the more interesting ideas that emerged from this dialogue that has been incorporated in the finalised design is a 'Walk of Fame' to commemorate major artists who have performed or associated with, the Festival Centre.

We are now approaching the final stages of the detailed design process, which is being auspiced by the Riverbank Authority, and will be moving to rapidly conclude final legal arrangements with Walker to commence major construction works at the site.

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To do that, it is critical that the enabling legislation I present to parliament in this bill is passed expeditiously.

This bill, which makes minor amendments to the ASER (Restructure) Act 1997, represents the quickest and simplest way to provide the authorisations necessary for construction to commence.

By way of reminder, the Adelaide Station and Environs Redevelopment (ASER) was a significant redevelopment in and around the railway station undertaken in the 1980s involving the integrated development of land around the railway station, including the casino and the convention centre.

The ASER Act was put in place by the former government to create specific arrangements for the ongoing management of the mature development site. The Act allows for individual leases to commercial interests on the site and shared management of common facilities and services.

Of particular importance, the Act governs a number of areas of public realm relevant to the Festival Plaza upgrade including Festival Drive and Station Road.

The bill will amend the ASER Act to enable the plaza upgrade to proceed by:

enlarging the development site to allow for the casino expansion and plaza upgrade

providing for the temporary suspension of ancillary property rights, such as rights of way, to allow works to proceed

providing for restructuring of leases and ancillary property rights in the area following completion of the project, and

renaming the Act as the Riverbank Act.

Supporting the legislation is a detailed map, already lodged with the General Registry Office and available to members on request, which illustrates the subject land to which these special powers will apply.

It is important to note that the ancillary property rights which this bill will allow to be subject to temporary suspension during construction, are 'non-occupation' rights and there will be no derogation from a party's rights of occupation or rights to conduct its business.

The legislation is essential to allow for the redevelopment project to proceed on time and for the government to fulfil its contractual commitments to Walker Group Holdings Pty Ltd for the upgrade. In addition, the legislative changes will also support the mooted casino expansion by SkyCity Entertainment Group Ltd should it proceed.

Subject to the passage of this bill, the estimate for the total build time is 24 months, with the new car park to open in the second half of 2017.

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To provide members with a fuller context, I would now like to explain some details about this exciting project, how it came into being, what consultation has occurred to date and what will occur next.

Firstly, it is important to point out that Walker became the government's preferred partner for this project through an open and transparent procurement process. This was conducted by the government in the term of the last parliament in accordance with statutory procurement requirements, and, following the outcome of the election (when this was a publicly known fact), was carried over to a proposal which the government agreed to in March of last year.

Walker is a highly suitable partner for a project of this nature. Its business model includes a focus on flagship properties in premium locations which it offers to major funds as part of a packaged investment opportunity. This allows it to amortise return on investment across a portfolio of prime assets. This business model means that Walker is highly engaged around the quality of the asset as a driver of its potential and is prepared to make outlays that few other Australian property developers would commit to.

The negotiated arrangements will see Walker make a substantial contribution to the public realm, and invest in a larger overall development, in return for exclusive development rights over the subject land. Importantly, the commercial terms include an incentive for Walker to secure a national or global anchor tenant by allowing for a 10,000 sqm increase in the net lettable floor area of the office tower.

It is important to note that, while Walker will have exclusive development rights, the company is not guaranteed a development approval unless its designs meet the high standards set by the State's independent Development Assessment Commission, which will assess the development. As with all major developments in the city, the commission's decision will be informed by the Government Architect's robust and widely lauded design review panel process. Walker, just like any other development proponent, will have to run the gauntlet of the assessment system at arms' length from the government.

Government investment in the precinct of $180 million (already committed) will be far exceeded by private sector investment of an estimated $810 million, assuming commitment to the casino expansion is able to be secured (this is the subject of ongoing discussions). There is also a significant jobs dividend, both during construction and ongoing, in the order of 500–1000 ongoing roles in the redeveloped precinct.

Walker's contribution will be in the order of $460 million, subject to a final decision on the floor space for the office tower. Economic analysis by Renewal SA indicates that for every $1 of taxpayer spend; private investment in redevelopment of the precinct will be approximately $5 if the casino expansion also goes ahead. This is a win-win scenario for the State.

Further analysis of the proposal is detailed in the government's submission to the Public Works Committee and the report no 544 of the committee handed down on 22 March this year.

The integrity of the process by which Walker became the government's preferred partner and the value-for-money proposition that this project offers cannot be seriously questioned.

While this project does not contemplate full redevelopment of the Festival Centre, it represents a significant proportion of this and will provide a platform for further upgrades in time.

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Secondly, it is important to outline the extensive consultation process that has led to this point.

With the approval of Walker's initial proposal and concept designs, Cabinet tasked the Riverbank Authority to undertake consultation with key stakeholders and the public with a view to settling a final design for the site.

The Riverbank Authority developed a set of 'place principles' for the site that will see seamless integration with the wider Riverbank master plan. These then informed engagement with key stakeholders.

Extensive consultation has been undertaken including with the Adelaide City Council, the Adelaide Festival Centre Trust, the InterContinental Hotel, SkyCity Entertainment Group Holdings Pty Ltd, staff of the State Heritage Council, the Kaurna Nation Cultural Heritage Association and other Kaurna community groups and elders, the Joint Parliamentary Services Committee, creative and arts communities and members of the public.

Public forums were held on 13 August and 2–3 September 2015, helping to inform the place principles developed by the Riverbank Authority and critique and improve iterations of the concept design.

Interest groups represented at these invite-based sessions included members of the arts and creative sectors, city-based entrepreneurs, city residents and university students—helping to gain a holistic appreciation of how the space would work for people of all ages and a better understanding of how arts and cultural activities can be 'threaded' through the space.

In addition, dedicated consultation has been undertaken—complying with section 23 of the Aboriginal Heritage Act 1988—with Aboriginal community bodies and also in accordance with the Heritage Places Act 1993 with staff of the State Heritage Council (both of which will inform the formal development assessment process). Liaison with Kaurna elders continues to be close as site works proceed with particular attention on the removal and relocation of the Indigenous public art pieces impacted by the construction works.

Throughout this process Arts SA and the Festival Centre Trust have been key partners in influencing the design and manifold project details. For example, Arts SA has conducted a comprehensive audit of public artworks and, through the Minister for the Arts, will be assisting in liaising with artists (and the estates of artists) in relation to their moral rights under the federal Copyright Act as works are progressively de-accessioned, relocated or recommissioned.

Both organisations will continue to participate in the proposed project governance arrangements as works unfold—ensuring that matters of particular interest, such as venue spaces and services, can also be identified and addressed.

In addition, Renewal SA and the Department of Planning, Transport and Infrastructure have undertaken consultation with various parties specifically in relation to this legislation, including those parties who occupy ASER buildings being:

SkyCity Entertainment Group Limited

the Adelaide Convention Centre

the Adelaide Railway Station

the InterContinental Hotel, and

the Riverside Building.

An extraordinary meeting of the ASER Management Committee (which comprises the facilities managers for each building) was briefed on details of the proposed bill on 23 September 2015 and ongoing liaison will be maintained by Renewal SA with this group on the progress of the redevelopment as it proceeds through its regular monthly meetings.

Liaison with all affected parties will be ongoing as construction and staging plans are settled. In short, all stakeholders are supportive of this legislation proceeding.

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Thirdly, it is important to address arguments put by some that this represents an alienation of park lands to commercial interests. Nothing about this project represents anything extraordinary in terms of the institutional zone in the park lands.

All along North Terrace, what was once open park lands has been developed to support a range of public and private interests. All of this is entirely consistent with the park lands legislation and with the long-term patterns of use of this part of the park lands.

Two universities, a hospital and new health care precinct, an office building, a convention centre, a gym, a zoo, a cemetery, two railway stations, a school and soon to be another, two major sporting arenas, a wine centre complex, an organic nursery and plant recycling depot, an aquatic centre, golf, bowling and cricket clubs, boating houses, several kiosks, a road safety school, an art gallery, museum and library, two restaurant complexes as well as restaurants featured in other facilities, and, of course, the Festival Centre itself all operate on former park lands on a wholly or partly commercial basis and with a mix of public and private ownership.

And that is not to mention the many private festivals and sporting events, operating on a wholly or partly commercial basis, that also use the park lands on temporarily during the year.

All of these have been developed in the park lands by governments of varying political persuasions as well as the city council itself.

Indeed, the institutional and like zones are acknowledged in the development plan, park lands strategy and the Adelaide Park Lands Act itself as suitable for development of this kind. The real reason for this zone being classified as park lands is so that if and when built structures are decommissioned without replacement, the land itself cannot be sold off and should therefore be restored to open park lands absent any other more intensive use.

This government, in decommissioning the 5.5 ha former Thebarton water depot in the west park lands, chose to invest in restoring these to open park landscapes with an urban forest of 23,000 trees growing to create a welcoming space for residents of the inner west. Similarly, the decommissioning of the former bus depot on Hackney Road has been returned to park-like uses under the custody of the Botanic Gardens.

This project, which will see office space available for parliament, ground-floor retail and exhibition spaces and a major private investment in our premiere public space is a no brainer and will ensure that neighbouring areas of open park lands abutting the Torrens riverfront are vibrant, well-used and attractive.

Indeed, we in the government would argue it is entirely consistent with the values expressed in the national heritage listing for the park lands which reflects Colonel Light's original vision for this uniquely Adelaide asset.

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Lastly, it is important to outline the project governance arrangements and work underway for the long-term management of the redeveloped site.

This is a complex redevelopment, with many stakeholders, commercial and non-commercial interests and legal issues at play.

Actual construction for each component of the redevelopment is likely to be practically and technically difficult given their scale and complexity, the location of the development sites and the nature and importance of surrounding buildings. This is further complicated because the tenants of the surrounding buildings enjoy rights which will be affected.

An experienced project manager (Mott MacDonald) has already been appointed to manage construction.

Separate development agreements are in the process of being finalised with Walker Group Pty Ltd. At the same time, the government continues discussions with SkyCity regarding the potential casino expansion—and we are hopeful these discussions will result in a positive outcome that can be announced in due course.

Importantly, passage of this enabling legislation is crucial to enable the government to finalise the legal arrangements with Walker that will ensure major works can commence.

Development approvals are being progressively secured for the redevelopment. SkyCity received their development approval in February 2016 with development assessment of State components of the redevelopment scheduled for April and Walker's components for May. The final concept designs will form the basis of the formal development assessment for the major works required to deliver the project.

Preparatory works have commenced on the site in anticipation of these important formalities.

Ongoing oversight of the project will be provided by the Riverbank Authority, with project management services provided through the Department of Planning, Transport and Infrastructure. A steering group including representatives of the Festival Centre and other key stakeholders will provide a vehicle to manage the intimate details of the construction process and ensure tight control of the budget outlays for the project.

For example, while the proposal has been costed based upon high quality finishes, similar to the quality of Adelaide Oval's public realm and North Terrace, as construction proceeds the project steering group will be charged with considering any changes to material selection and plantings that could help to contain overall costs.

There will be ongoing liaison with all parties, but particularly with the ASER-affected parties whose ancillary rights may need to be suspended at various points during construction. This liaison will be managed through ASER Management Committee.

In addition to facilitating this extraordinary project, the bill will rename the ASER Act as the Riverbank Act. This will set the seal on the government's vision for the precinct and foreshadows later work that will settle a finalised management structure under the oversight of the Riverbank Authority.

The government expects to revisit these matters, following discussions with the Riverbank Authority about the optimal structure for management of the precinct into the future—and the legislation needed to support this.

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This is a pivotal opportunity for parliament to give the green light to what will become one of this State's iconic assets in years to come—a compelling destination of choice for our citizens and visitors alike and the centrepiece of a revitalised arts, cultural and leisure precinct embracing the riverbank at the heart of our city.

What's so exciting about this project is how it ties together more than 40 years of history at the Festival Centre—a legacy the final concept designs showcase and build upon. The new plaza will be a distinctive place that renders a unique account of the people, cultural life and character of Adelaide—a place that will stay in the memories of all who visit it.

Adelaide has established a world-class reputation as a festival city, and it is right that as 'Mad March' continues to grow each year the question of what cultural 'vibe' we want to project becomes a matter of public debate—as it has in the aftermath of this year's festival season.

That's why the decision we take now, to pass this legislation and put this project into its production-stage, is so important. It will be a milestone for our State.

This event-ready space will be the platform for the many more successful festivals to come, a place with a broad canvas able to host the grandest extravaganzas, but also with nooks and crannies that can provide developing artists with audiences and opportunities all year round.

The design is bold, innovative and will do us proud—and can be delivered within budget, on time and alongside major private sector investment all South Australians can welcome with open arms.

I commend the Bill to Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

This clause is formal.

2—Commencement

The measure will be brought into operation by proclamation.

3—Amendment provisions

This clause is formal.

Part 2—Amendment of ASER (Restructure) Act 1997

4—Amendment of section 1—Short title

This clause proposes to amend the short title of the Act to the Riverbank Act 1997.

5—Amendment of section 6—Enlargement of Site

It will be possible to enlarge the Site under a proposed amendment to section 7.

6—Amendment of section 7—The casino site

The Governor will be able to extend the area of the casino site by notice in the Gazette. An indication of what may constitute this area is indicated by a deposited plan. The Governor will, despite any other provision, be able to make variations to any regulation under the Act that defines any boundary under the Act.

7—Insertion of Schedule 1

Amendments are to be made to the ASER (Restructure) Act 1997. These amendments will be effected by the insertion of a new schedule to the Act. A detailed explanation of the provisions contained in the schedule is as follows.

Clause 1 sets out 2 definitions that are relevant to the operation of the schedule. The designated area will be the whole of the Site together with 2 areas adjacent to this Site that are identified by a plan deposited in the General Registry Office. A designated project is a project, scheme, undertaking or works, to be undertaken within the designated area, declared by the Governor, by notice in the Gazette, to constitute a designated project.

Clause 2 sets out a scheme that will allow the Governor, on the recommendation of the Minister, by notice in the Gazette, to suspend or modify specified classes of rights or interests that exist in, or in relation to, any part of the designated area. However, the Minister will only be able to recommend the suspension or modification of a right or interest if the Minister is satisfied that this action is reasonably necessary in order to facilitate or support the undertaking of a designated project. A notice that suspends a right or interest, should (insofar as is reasonably practicable and subject to avoiding an adverse impact on any aspect of a designated project) endeavour to grant a substitute right or interest. The Minister will be also required to revoke a suspension or modification if or when it is no longer reasonably necessary in connection with a designated project, subject to some specified qualifications.

Clause 3 will authorise the Minister, or a person authorised by the Minister, to exercise various powers for the purposes of, or in connection with, a designated project. However, a person exercising a power under this clause must, insofar as is reasonably practicable, minimise the extent of damage to any building, structure or other built form and minimise disturbance to any other person who is lawfully occupying any part of the designated area.

Clause 4 sets out a scheme that will allow the Minister to create or grant 1 or more rights or interests in relation to any part of the designated area for any purpose associated with a designated project. These will be permanent rights and interests and the Minister will be able to modify permanently a right or interest of a kind referred to in clause 2(1). The Minister will be required to take reasonable steps to ensure that a right or interest under this clause does not adversely affect to a material degree the viability of any business conducted on the designated area by a person lawfully occupying any part of the designated area at the time that the Minister takes action under this clause.

Debate adjourned on motion of Hon. T.J. Stephens.