Calls for PM Malcolm Turnbull to step in as path clears for sale of landmark Sydney GPO

Writer: Michael Evans
Published Date: June 17, 2017
Source: The Canberra Times

The historic Sydney GPO in the heart of the CBD on Martin Place is no stranger to controversy.

The landmark work of the man regarded as colonial Australia’s premier architect, James Barnet, was first opened in 1874 while still incomplete and took 25 painful years to finish.

While 19th century controversies seem quaint today, concerns over the selection of bells for the campanile clock and the commissioning of Italian immigrant sculptor Tomaso Sani’s “realistic” depictions of people for the carvings along the Pitt Street arcade caused an almighty stir.

But by the time of its final completion in 1891, the building was hailed as a turning point for the colony, and historians have lauded the building’s significance.

“It is a building of outstanding architectural and artistic significance and is arguably the finest example of the Victorian Italian Renaissance Revival style in NSW,” a Heritage Management Plan prepared by Lucas Stapleton & Partners architects says.

Today, generations of Sydneysiders know their way around their city by reference to how far they are from the GPO.

But the historic, heritage-listed building is again mired in controversy with calls for   Prime Minister Malcolm Turnbull to step in and protect it.

Last month, Fairfax Media revealed Australia Post sold the GPO, subject to final regulatory approval, to Singaporean billionaires Robert and Philip Ng in March in a secretive $150 million deal, despite concerns raised in a heritage report commissioned by the postal authority that was never made public.

The revelation set off an outpouring of concern – some of it about selling public assets without a public process, some more simply about selling off the crown jewels of our history. How was a valuation reached? What heritage protections will be in place? And why was Australia Post so secretive about it?

Heritage experts slammed the sale, including National Trust NSW branch president Clive Lucas who described the sale as “scandalous”, “outrageous” and “a great tragedy”.

Sydney City Councillor Phillip Thalis, a heritage architect, says “the Prime Minister should be intervening … this is something of national interest” not just a commercial transaction.

Sydney Lord Mayor Clover Moore condemned the sale, describing the GPO as a “masterpiece” and a 19th-century-equal to the city’s most famous building, the Opera House.

For all the concern expressed over the sale, the reality is that in all likelihood, the final piece of the puzzle will fall into place by mid July – and the building will  no longer be in public hands.

There’s little doubt the building is no longer of use to Australia Post.  Once the centre of a colonial outpost’s connection with the world, the era of the telegraph has long since been left behind. By 1996, the scale of operations in the GPO was wound back. And in 2017, a postal business under pressure to  stop a decline in earnings led by the death of the letter delivery business is being encouraged to best utilise its assets.

Last year, Australia Post was upfront – it announced it was putting all seven state GPOs around the country up for sale. It planned to sell-off 60 per cent into an Australian-controlled trust and would keep 40 per cent ownership. Advisers were appointed, public consultation called for. The sale process appeared sound.

But later in the year  that plan was mysteriously scuttled.

It was the last anyone heard of a planned asset sale until an article appeared in the commercial property pages of The Australiannewspaper in early May, flagging a standalone sale of the Sydney GPO. With no public consultation, Australia Post had suddenly agreed to sell the site.

The timing was curious. In February, Australia Post boss Ahmed Fahour had resigned, caught in a pay scandal that drew public ire and a rebuke from the Prime Minister for the size of his $6 million pay packet. While he had flagged he was going, he wasn’t leaving until July.

Fairfax Media has established the sale came in March, just weeks after the resignation. The deal was never announced. Nothing until May.

Fairfax Media understands that Fahour took a personal interest in the sale.

Australia Post has declined to disclose who its financial adviser was, who negotiated the deal and how a valuation was reached. It’s understood the sales process was driven from within Australia Post. It also  insists the transaction will not be completed until the new financial year, and that Fahour will not receive any benefit from the sale.

For their part, the deal appears eye-watering for the Ng brothers of Singaporean international property developer Far East.   They are no strangers to Sydney, having bought the GPO’s neighbour The Westin Hotel in 2015.  Significantly, the company also secured control of two of three leases  at the GPO site, making it the  logical buyer if Australia Post  decided to divest.

But questions have been asked about the deal that Australia Post secured – the GPO earns Australia Post $6.5 million a year in rent for the high-traffic retail areas on the ground and lower ground floors, while nominal leases on parts of the building for 90-odd years had decades to run before a return to public ownership.

How was a valuation reached on the sale price? The upper four floors of the building, for example, were rented out for a nominal $1 per year, meaning their contribution to the sale price as a proportion of the rental earnings could be calculated at as little as $23 for four floors of prime Sydney CBD real estate.

A number of significant questions also remain on heritage issues – why wasn’t the heritage report commissioned by Australia Post released for public discussion about the sale? The concerns, raised by Lucas Stapleton & Partners were not insignificant: “The sale or alienation of the place is considered to be very undesirable.

“Very substantial loss of significance may occur should any part of the place be sold or otherwise alienated from Australian ownership. Alternatives to any proposed alienation should be vigorously investigated and should alienation proceed, a high level of mitigation is appropriate,” the report says.

Far East plans significant changes to the internal structure of the building, Fairfax Media has revealed, including introducing multi-level high-end shops that would use current open space; removal of internal columns that were central to the 1990s refurbishment; and filling in the ground floor void to make a more attractive cafe environment.

Australia Post says it was not aware of Far East’s plans.

However, the path to a sale now appears nearly complete. The Foreign Investment Review Board has signed off, as have federal government shareholder ministers Mathias Cormann and Mitch Fifield.

The final hurdle lies with Josh Frydenberg’s Department of Environment and Energy.

The department does not have the power to stop the sale, only to provide advice to the adequacy of the heritage covenants and provisions in the sale contract that apply to the national heritage listings. It can force changes if it sees fit.

Federal heritage listings apply to the facade and the historic postal functionality of the building. But state and local council authorities also have heritage authority over the building, particularly the interior, that can still influence plans for new owners. Premier Gladys Berejiklian has signalled she won’t be intervening to stop the sale.

The Department of Environment and Energy received the required 40 days notice of intended sale, by coincidence, the same day Fairfax revealed the controversy on May 31. A decision is due around the middle of July.

“Department staff who administer the Commonwealth Heritage List are reviewing the Heritage Management Plan to ensure it is consistent with the Commonwealth Management Principles under the [Environment Protection and Biodiversity Conservation] Act,” a department spokesman says.

The department has at its disposal, a panel of seven heritage experts, the Australian Heritage Council, who will be asked to “provide advice on the Heritage Management Plan”.

The council, chaired by former Howard government minister David Kemp, will meet next week in Canberra with the Sydney GPO sale up for discussion – although not yet for final consideration.

Dr Kemp, a former environment minister, will be aware that three federal government ministers from his side of politics have signalled no opposition to the deal.

Two of his panel are historic heritage experts, Associate Professor Don Garden, OAM, is president of the Royal Historical Society of Victoria and the Federation of Australian Historical Societies while Tasmanian-based Dr Jane Harrington is director of Conservation and Infrastructure with the Port Arthur Historic Site Management Authority.

Filmmaker Rachel Perkins appears to be the council member with the closest links to Sydney, including a stint on the Senate of the University of Sydney.

Australia Post says: “The contract for sale of the Sydney GPO will contain a covenant by the purchaser to protect the Commonwealth heritage values of the Sydney GPO in a manner consistent with the Heritage Management Plan, which was commissioned by Australia Post.

“This transaction will free up valuable capital to invest in our people and in our services to the community, without any impact on the continued operation of and heritage protections covering the Sydney GPO site.”

The GPO may have outlived its use for Australia Post but the National Trust’s Clive Lucas  sees a bigger picture. “I think it’s scandalous that such an important building in such an important city should be sold off in this way,” he says.

“A nation that forgets its history is a nation that has no future.”

The key players

Outgoing Australia Post chief executive Ahmed Fahour.Outgoing Australia Post chief executive Ahmed Fahour. Photo: Stefan Postles

  • Ahmed Fahour, Australia Post CEO, resigns after a pay controversy in February, sells Sydney GPO shortly after in March. Will stay at Australia Post until July.
  • Singaporean brothers Philip and Robert Ng are worth $10 billion and control property investment company Far East as well as Hong Kong company Sino Group. They already own the GPO’s neighbour the Westin Hotel, as well as two key leases over the Sydney GPO site that will likely soar in value once they gain control of the GPO freehold.
  • Mathias Cormann, Mitch Fifield and Josh Frydenberg are the federal government ministers with a say on the sale. None oppose it.
  • Heritage architects Lucas Stapleton & Johnson’s expertise on the Sydney GPO dates back to the early 1990s. They were commissioned by Australia Post in April 2016 for a heritage report; it recommended strongly against the sale of the building. The report was never released.

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