Crown Resorts and Lendlease win Barangaroo legal battle

Crown Resorts and Lendlease win Barangaroo legal battle

21 December 2018

James Packer’s Crown Resorts and listed developer Lendlease are readying to restart talks with the Barangaroo Delivery Authority (BDA), the NSW government body responsible for the development of the Barangaroo precinct, after a court confirmed the primacy of their crucial sight lines from the Sydney Harbour Bridge to the Opera House, reports The Australian.

The pair last Friday won a mammoth legal battle against the BDA that provides greater certainty about the views that both said were crucial to their projects.

Justice Robert McDougall of the NSW Supreme Court ruled that the NSW government’s Barangaroo Delivery Authority had breached its development agreement by negotiating with bidders for the development of the final stage of Barangaroo Central without consulting with Crown and Lendlease.

Crown is developing a $2.2 billion casino, apartment and hotel complex, and Lendlease has proposed two luxury apartment towers with a $1bn end value.

Both groups had been concerned that the BDA projects at the neighbouring $5bn Central Barangaroo precinct would block their views.

Barangaroo Central was originally slated to have a maximum development area of 59,225 square metres in 2010, says ArchitectureAU. However, in 2015, an underground train station was announced for the area as part of the Sydney Metro project.

The dispute arose after the government increased the size of Barangaroo central—nearly trebling the amount of floor space—to offset the addition of a Metro train station to the area.

The building heights at Grocon’s $5 billion precinct significantly exceeded the limits put forward by the authority when Crown and Lendlease finalised their development plan in 2016.

The BDA argued its agreements with Crown and Lendlease did not contain clauses which guaranteed the protection of the sight lines.

Justice McDougall, however, disagreed.

“The authority had considered various bids to develop Central Barangaroo without first discussing and negotiating, with Crown and Lendlease, ways to retain the sight lines that the Crown and Lendlease buildings would otherwise enjoy to the Harbour Bridge and Opera House,” he wrote.

The judge concluded “the parties should at least start [their negotiations] with the proposition that the sight lines are to be retained.

But for Crown and fellow litigant Lendlease the victory is not comprehensive yet. The judge himself suggested there would likely be an appeal from the loser, the Barangaroo Delivery Authority (BDA), says The Sydney Morning Herald.

Meanwhile, the BDA will need to go back to the drawing board and ensure that any plans for the Central part of the Barangaroo precinct will need to start from the base line that buildings won’t impair the view of their southern precinct neighbours.

The BDA needs to “consult with Crown about any application for the proposed development of Central Barangaroo that differs from that provided for in the relevant concept plan for Central Barangaroo in existence at the time the Crown Development Agreement was entered into”, a Crown spokesman said on Friday.

The BDA could come under pressure as it has already received substantial payments of about $400 million from the Grocon-led consortium, backed by Chinese group Aqualand and local Westfield landlord the Scentre Group, which is developing Central Barangaroo.

The authority has attempted to ensure that the groups, which are developing above a planned metro station, have ample space for their towers, but their schemes could now be recut.

A 158m luxury apartment tower by Aqualand could be trimmed back as could the amount of office space that Canadian group Oxford will own.

It had been told by the authority that it could have 60,000 square metres of space, and Grocon had pre-sold this commercial component in a $1.4bn deal.

For Crown and Lendlease, however, the court outcome seems to have allowed them to have inched closer to certainty.