The economics of the City Tatts property developmentPosted: October 11, 2018
The recent blog about the loss of rental income is a reminder to examine the whole rationale and economics of the City Tatts property development.
Actually the combined rent from the NAB and the Lotteries Office came to over $700,000 a year, before the club got rid of both of them around 2010 for Tony Guilfoyle’s dream of a property development.
Now let’s think about this.
The club missed out on at least $6 million in rent since then.
Then they spent $6 million, so far, trying to get planning permission – with no success. Based on that if they actually got full planning permission (Stage 1 DA and Stage 2 DA) for another $1 million it would be a major achievement.
If the property development ever happens the plan was to use 202-204 Pitt Street as a temporary club during construction. Leaving aside the question of whether this is even feasible the fact is a lot of money would need to be spent to do this. First they would have to build the “Wailing Wall” to divide the two parts of the site: the construction site at 194-200 Pitt Street, and the temporary club at 202-204 Pitt Street. Then there would be the other work required to make the temporary club operational. Together this work would cost at least $3 million.
So let’s recap.
$6 million in lost rent
$7 million to get planning permission
$3 million for the interim club
That’s $16 million.
But they only get $25 million from the developer.
If this was your building would you agree to this deal?
City Tatts Information Desk